Political Economy category archive
The unemployment numbers that the BLS released last week were significantly lower than the actuality.
It does appear to have been an honest SNAFU, complicated by new unemployment situations resulting from layoffs and closures due to COVID-19 and stay-at-home orders. Nevertheless, the Trump administration’s (and Fox News’s) crowing about the figures released last week has been demonstrated to be wholly unwarranted.
A snippet (details of the SNAFU at the link):
I find it quite credible that it was an error, rather than an intentional lie, especially as the BLS voluntarily–er–regretted the error.
We live in strange times and many persons are in unprecedented (un)employment situations.
At The Roanoke Times, retired professor of economics George McDowell suggests that those who would “reopen” the economy must first understand how it works.
I commend his article to your attention. No attempt to excerpt or summarize it would not do it justice.
After you read the article, you will know more about economics than our preside–oh, never mind.
(Misplet wrod correxed.)
As state and municipal revenues have cratered in these viral times, Republicans are balking at any federal effort to ameliorate suffering and penury for states, municipalities, and persons.
At the Portland Press-Herald, Greg Kesich points out that there are other deficits on which the party of Scrooges turns its back. Here are a couple of his examples; follow the link for more.
Putting off school construction projects – the kind of thing that happens in bad economies – is another kind of deficit. It creates long-terms costs in the form of inefficient energy use and transportation plans that somebody is going to have to pay.
There is a long-term debt that comes with every lost opportunity for a child to learn, and every person who can’t afford to see a doctor. But we have been trained to think that cutting school funding and health care programs – the inevitable result of a “smaller government” – is sound fiscal management instead of calling it what it really is: recklessly borrowing from the future to get us out of our present crisis.
Ed, at Gin and Tacos, thinks that is a very real possibility.
Here are some bits from his post:
Georgia’s “re-opening” was a gigantic wet fart for businesses. The owner of one hip Atlanta bar was told to expect business at 10% of normal levels for the first weekend; instead he got two customers. Two. For the entire weekend.
The truth is that people are afraid, and with good cause. They are afraid of unnecessary risk.
The other reality that is becoming all too clear is that the “slow drain” theory of capitalism and consumer spending is delusional. That is, demand and consumption haven’t been pent up for 8 weeks and once the clog is cleared, it will come bursting forth in torrents. . . . The lack of spending is from tens of millions of people losing their jobs, having their hours reduced, or being in fear of losing their jobs in the near future.
I commend the entire article to your attention.
And, for related reading, economist Austan Goolsbee is not sanguine.
The Washington Monthly explores why, even as we as shoppers are greeted by shortages and empty shelves at our grocery stores, farmers are dumping milk and killing livestock because they are unable to get them to market.
They pose this questions; follow the link to see how they answer it:
(Syntax error corrected.)
Thom discusses the path from trickle on economics to our botched response to COVID-19.
The Atlanta Journal-Constitution has an interesting analysis of how COVID-19 has affected the supply chain and why we are seeing shortages in grocery stores.
There’s more to it than hoarders and preppers and closed processing plants (closed, natch, due to managerial cupidity). Here’s one bit; follow the link for the list:
So tens of millions of households are buying from local stores for meals and needs that had been served away from home in pre-crisis days.
Writing at AL.com, Howard Bankhead argues that the economy pre-COVID-19 was not anywhere near as good as pols and pundits were saying, and that the pandemic as revealed its fundamental weakness. Here’s a bit:
I have one question about the so-call best economy of all time. If the economy was so great and good, why are state governments (Ohio and others), big businesses (airlines, etc.), small businesses (too many to name), individuals and families, one payroll, or paycheck from poverty?
My own theory is that for far too many persons the economy inhabits on short street in lower Manhattan where at one time stood a wall.
It is quite clear that the very very rich, ensconced in their multiple houses, ginormous yachts, and do-nothing sinecures, have no clue about what life is like for the rest of us.
Though their styles are very different (Dickens, in particular, illustrates what can go wrong when writers are paid by the word), I must admit that Hemingway is my American Dickens. Though I’ve tried, I’ve never been able to finish anything he wrote.
I have managed to read some of Dickens’s short stories, but I’ve never succeeded in wading through one of novels except for A Tale of Two Cities a la Classics Illustrated.
The Inky reports on the trickled-on in these viral times. A snippet:
Even as nearly 17 million Americans have sought unemployment benefits in the last three weeks — a record high, by far — millions of people appear to be falling through the cracks. They can’t get through jammed phone systems or finish their applications on overloaded websites. Or they’re confused about whether or how to apply.
And now there is a whole new category of people — gig workers, independent contractors, and self-employed people like Cruse. The federal government’s $2.2 trillion economic relief package for the first time extended unemployment aid to cover those workers when they lose their jobs. Yet most states have yet to update their systems to process these applications.
At The Japan Times, Brad Glosserman makes a convincing case that Donald Trump’s “American First” impulse and its related
policies whims, such as his farcical trade wars, represent the resurfacing of a recurrent American theme: “isolationism,” the notion that the country–one founded, ironically, on exports such as tobacco and cotton–could somehow exist in a vacuum alone from the rest of the world.
He goes on to argue that the coronavirus pandemic has showed nor only the practical fallacies of this notion, but also its moral and intellectual bankruptcy. Here’s a snippet:
His (Trump’s–ed.) administration’s efforts to block or reroute shipments of medical equipment from non-U.S. customers demonstrate a selfishness and short-sightedness that is virtually unprecedented in modern U.S. history.
Follow the link for the rest.
Writing at the Idaho State Journal, Mike Jones wonders when the stock market became such a big deal that certain politicians have become willing to ask old folks to sacrifice their lives for the Dow-Jones Average. A snippet; more at the link:
Now, if 70-year-old Dan Patrick wants to sacrifice his life to help the economy, I say go for it. But as far as 70-year-old Mike Murphy following Patrick’s advice, I’m not putting my neck on the chopping block so Warren Buffett can make another billion dollars!
I still don’t know much about how the stock market works. Based on the little bit I have studied it, I surmise investing in stocks is a lot like betting on horse races — both are fixed, you just have to be lucky and guess the fix correctly.
And, in more news of taking stock . . . .
Farhad Manjoo investigates why an item so simple as a medical face mask is suddenly unobtainable, and the answer is all about the next quarterly report. It’s what Harry Shearer’s guest on Le Show, Matt Stoller, referred to as the “financialization” of business.
Here’s a bit; follow the link for the rest.
I am sorry to say that digging into the mask shortage does little to assuage one’s sense of outrage. The answer to why we’re running out of protective gear involves a very American set of capitalist pathologies — the rise and inevitable lure of low-cost overseas manufacturing, and a strategic failure, at the national level and in the health care industry, to consider seriously the cascading vulnerabilities that flowed from the incentives to reduce costs.