Archives for category: Economy

A number of informed observers noted that the U.S. unemployment rate did not fall precipitously.

During the campaign of 2016, Trump insisted that the data from the Bureau of Labor Statistics was a hoax.

The data may not be a hoax, but they are wrong.

Robert J. Shapiro explained in the Washington Monthly that the data were wrong.

The Washington Post reported a “misclassification error” that reduced the unemployment rate.

The Post reported that:

When the U.S. government’s official jobs report for May came out on Friday, it included a note at the bottom saying there had been a major “error” indicating that the unemployment rate likely should be higher than the widely reported 13.3 percent rate.
The special note said that if this “misclassification error” had not occurred, the “overall unemployment rate would have been about 3 percentage points higher than reported,” meaning the unemployment rate would be about 16.3 percent for May. But that would still be an improvement from an unemployment rate of about 19.7 percent for April, applying the same standards.
The Bureau of Labor Statistics, the agency that puts out the monthly jobs reports, said it was working to fix the problem.

Of course, these careful statements did not present Trump crowing about the jobs report and claiming outrageously that the recently murdered George Floyd would be happy to see the new data. Trump beloveds

The AFT issued this statement:

Statement by AFT President Randi Weingarten on Jobs Report

WASHINGTON—American Federation of Teachers President Randi Weingarten issued the following statement after the U.S. jobs report showed the loss of more than half a million additional public sector layoffs amid a rebound in private sector jobs:

“The jobs report out today confirms what we already know: The CARES Act is working, but if we don’t act now on a new round of stimulus for states, communities and schools, then millions more Americans will be out of work.

“An additional 585,000 public sector jobs were lost, following a drop of 963,000 in April. That includes another 375,000 educators, for a total of 750,000 so far during the COVID-19 pandemic, double the carnage of the Great Recession.

“The numbers are an argument for state and local aid, not against it. Business wants to come back, but we can’t halt stimulus now, particularly for states and schools, otherwise we’ll be confronting a fresh slump that will wreak havoc for years.

“We are in the midst of three crises: a pandemic, an economic crisis and a crisis of systemic racism. The news that private sector jobs grew was a step in the right direction, but these crises are far from over.

“The president’s comments today about George Floyd were tone-deaf. Floyd was murdered by police, and racial inequalities remain unaddressed. The report showed that Black unemployment rose, as African Americans continue to feel the disproportionate effects of the downturn.

“There are no magic fixes for this economy—only a path to recovery if we keep up the stimulus and investments to fund, rather than forfeit, the future. We urgently need the federal funding included in the HEROES Act that helps states, cities, towns and schools weather this rolling storm. If we fail to act, essential services will be gutted, schools won’t be able to reopen and public employees will stay laid off.”

Trump says even if the coronavirus comes back for a second round, there will be no more shutdowns. That means that even if there is a sharp increase in infections and deaths, the economy will keep humming, no matter the risk to life.

The Boston Globe wrote:

President Trump said on Thursday that “we’re not gonna close the country” again if the coronavirus sees a resurgence.

During a tour of a Ford plant in Michigan, a reporter asked the president if he was concerned about a potential second wave of the illness.

“People say that’s a very distinct possibility. It’s standard. And we’re going to put out the fires. We’re not gonna close the country. We’re going to put out the fires — whether it’s an ember or a flame, we’re going to put it out. But we’re not closing our country.”

Put another way, Trump is willing to sacrifice as many lives as necessary to keep the economy open.

Steven Singer hears the growing demand to reopen schools in the midst of the pandemic, and he sees an ulterior motive.

The clamor to reopen the schools is not about education or even the lives of children, but freeing their parents to go back to work.

He writes that despite the lack of testing or vaccines, the Trump administration is eager to open up the economy, and reopening schools is central to that goal.

The rich need the poor to get back to work. And they’re willing to put our lives on the line to do it.

What’s worse, they’re willing to put our children’s lives on the line.

I don’t know about you, but I’m not willing to risk my daughter’s life so that the stock market can open back up.

As a public school teacher, I’m not willing to bet my students lives so that the airlines and cruise industry can get back in the green.

Nor am I willing to gamble with my own life even if it means the NBA, NFL and MLB can start playing games and Hollywood can start premiering first run movies again.

There’s still so much we don’t know about COVID-19.

Initial reports concluded that older people were more susceptible to it, but as infections have played out worldwide, we’ve seen that 40% of patients are between 20-50 years of age. Children seem mostly asymptomatic. However, many immunologists suspect they are acting as carriers spreading the virus to the older people with whom they come into contact.

Children have a more difficult time with the constant hand washing and separating themselves at least 6 feet apart recommended by health experts. This is one of the justifications for closing schools in the first place. If we reopen schools too quickly, it could jumpstart another wave of infections.

Paul Waldman, an opinion writer for the Washington Post, writes here that the coronavirus pandemic has made reform of healthcare an urgent matter.

Millions of people have been laid off, losing the health insurance provided by their employers. He predicts that access to health insurance will be a major issue in the November election because Trump’s war on Obamacare has stripped millions of their health insurance.

Many will be destroyed by the cost of their healthcare during this current crisis.

The pandemic will revive support for Medicare for All, and its fate will depend on the composition of Congress.

He writes:

Let’s begin by considering a few things the coronavirus crisis and the accompanying economic downturn have illustrated about our system.

Perhaps the most vivid is that untold numbers of people are going to get huge bills from being treated for covid-19. Insurance companies made a big deal about waiving cost-sharing for coronavirus tests, but if you get it and have to get treated, you could still face thousands of dollars in costs, especially if you have a high-deductible plan of the kind that has proliferated in recent years.

The number of people facing those costs will be enormous. As bad as the virus has gotten in some other countries, that’s one thing their citizens don’t have to worry about.

That’s not to mention the huge numbers of Americans who have no insurance at all — especially in Republican-run states that refused the Affordable Care Act’s expansion of Medicaid — and so either won’t seek care when they get sick or will have to have the state pick up their tab, further straining state budgets.

Not only that, because of this wave of patients needing expensive treatment, insurance premiums could rise by 40 percent next year. How many people are going to be saying that everyone loves their private insurance when that happens?

Then we get to the effects of the budding recession. As I’ve argued before, the fact that we force most people to get insurance through their employers not only has no rational basis (it’s an accident of history), but it also makes things incredibly complicated during an economic downturn.

Right now we’re scrambling to figure out what to do about the millions or perhaps tens of millions of people who are losing their jobs and so may lose health care. Should we subsidize them to keep their old coverage through COBRA? Increase ACA subsidies? Widen Medicaid? Some combination of those and more?
In any other system, we wouldn’t even have to ask those questions, because your coverage is not tied to your job. If you get laid off or quit or your company goes out of business, your coverage is unaffected. Wouldn’t that be easier and less stressful?

It was always a myth that if you like your employer-sponsored coverage, you can keep it — your boss can change it at any time and often does, even if you keep your job. But if some of the predictions going around are right and as many as a quarter to a third of Americans lose their jobs in this recession, the idea of keeping insurance tied to employment may seem even more absurd than it already was.

Advocates of Medicare-for-all will say these twin crises make the case for their preferred system stronger than ever. But even if we’re not ready to go that far, what we’re living through still reinforces every argument in favor of reform.

It will certainly make health care a more potent issue for Democrats in November, since the central pillar of President Trump’s health-care policy is to get the ACA declared unconstitutional, immediately tossing 20 million or so people off their coverage and taking away protections for those with preexisting conditions (such as, say, having had covid-19).

And if Joe Biden should become president, it will increase the pressure on him to forge ahead with the reform he advocated during the campaign, a surprisingly progressive plan centered on the creation of a public option that could quickly enroll millions of Americans in coverage that would be stable and secure even through another pandemic.

The Trump administration eliminated a $200 million program to help scientists around the world predict pandemics before they get started, according to a report in the Los Angeles Times. Is it too much to call this decision criminal negligence? What’s the old poem? “For want of a nail, a kingdom was lost?” To save $200 million, a global pandemic was unleashed that killed many thousands of people and wrecked the world’s economy. Was the program scrapped to save money or because it was started by the Obama administration, which Trump hates?

Two months before the novel coronavirus probably began spreading in Wuhan, China, the Trump administration ended a $200-million pandemic early-warning program aimed at training scientists in China and other countries to detect and respond to such a threat.

The project, launched by the U.S. Agency for International Development in 2009, identified 1,200 different viruses that had the potential to erupt into pandemics, including more than 160 novel coronaviruses. The initiative, called PREDICT, also trained and supported staff in 60 foreign laboratories — including the Wuhan lab that identified 2019-nCoV, the new coronavirus that causes COVID-19.

Field work ceased when the funding ran out in September, and organizations that worked on the PREDICT program laid off dozens of scientists and analysts, said Peter Daszak, president of EcoHealth Alliance, a key player in the program.

On Wednesday, USAID granted an emergency extension to the program, issuing $2.26 million over the next six months to send experts who will help foreign labs squelch the pandemic. But program leaders say the funding will do little to further the initiative’s original mission.

ON TAP Today from the American Prospect
MARCH 27, 2020

Kuttner on TAP

Oh, No! Better Unemployment Benefits Raise Low Wages. The Republican senators who tried a last-ditch effort to water down the stimulus bill had one major concern: If federal unemployment benefits were increased, companies that depend on low-wage labor might have trouble coaxing people back to work for a pittance. Oh, the horror!

As The Wall Street Journal lead editorial put it, in inimitable fashion, “Amazon, Walmart, CVS and delivery services are seeking to hire hundreds of thousands of workers to meet a surge in demand even as the virus spreads. Many are boosting pay, but how are they supposed to compete with workers who can stay at home and make more?”

And the Journal warned gravely, “The enhanced benefits expire after four months, but we’ll bet Speaker Pelosi’s pension that Democrats will be back demanding an extension through the end of the year and calling Republicans ‘cruel’ if they disagree.”

Duh—how prescient of the Journal. Democrats should indeed take full advantage of this crisis to get reforms that are long overdue: more adequate replacement of lost wages for laid-off workers; full unemployment coverage for gig workers, freelancers, and other 1099 employees.

As for poor Amazon, Walmart, and others of the world’s most profitable companies that may find it harder to get workers to risk their life and health for lousy jobs, there is a remedy that the Journal may recognize as part of standard economic supply-and-demand theory: Raise their wages!

And don’t tell us that this would be inflationary. The crisis that this economy faces is deflation.

The historic function of unemployment comp is not just to keep idle workers from starvation, but to raise what economists call the “reservation wage,” otherwise known as a desperation wage, that workers are compelled to take to survive. And if the corona crisis raises that wage to $15 an hour or more, it’s one of the very few good side effects. ~ ROBERT KUTTNER

In this editorial, Harold Meyerson plumbs the depths of meanness in the Senate’s majority party. It would be better for the unemployed if more of them were quarantined and unable to vote:

ON TAP Today from the American Prospect
MARCH 26, 2020

Meyerson on TAP

The Senate’s OTHER Vote Last Night—Along Party Lines. As every news-following American knows, the Senate voted unanimously last night to pass a $2.2 trillion stimulus package for our rapidly shrinking economy. But hardly any news-following American knows about the vote that immediately preceded that—on the amendment that four Republican senators introduced to greatly reduce unemployment insurance payments.

The senators’ objection to the agreed-upon UI fix in the stimulus bill was itself widely reported. Because unemployment insurance levels in many states with right-wing governments are so low, Democrats insisted upon the federal government topping off UI payments with an additional $600 a week to the unemployed for a four-month period. Four conservative senators objected on the grounds that that might create incomes for the unemployed that exceeded their pay when on the job. Not surprisingly, two of those senators were South Carolinians Lindsey Graham and Tim Scott. South Carolina, it should be noted, is one of the six states that have never passed a minimum-wage law, and one of the two states (the other is North Carolina) that always place first or second in having the lowest rate of unionized workers—invariably, below 3 percent. In short, it’s no great achievement to make more money off the job than on the job in the senators’ home state, precisely because South Carolina’s historic denigration of workers creates so many poverty-wage jobs. Graham and Scott were like the kids who kill their parents and plead for mercy because they’re orphans.

But here’s the kicker: Surely, the objections of these two troglodytes and their two co-sponsors (Florida’s Rick Scott and Nebraska’s Ben Sasse) were just idiosyncratic social meanness, right?

Wrong. The vote on their amendment was 48-48; the only Republican to join the chamber’s 47 Democrats in voting no was Maine’s Susan Collins. (Fortunately, the Democrats, as part of the agreement on the stimulus bill, had insisted that the amendment require 60 votes to pass.)

If there’s a clearer expression of Republicans’ concern for their fellow Americans who lose their jobs in the pandemic crisis, I sure don’t know it. ~ HAROLD MEYERSON

Jeff Bryant has written a powerful story that reveals the growing dominance of corporations in schools.

In the expanding effort to privatize the nation’s public education system, an ominous, less-understood strain of the movement is the corporate influence in Career and Technical Education (CTE) that is shaping the K-12 curriculum in local communities.

An apt case study of the growing corporate influence behind CTE is in Virginia, where many parents, teachers and local officials are worried that major corporations including AmazonFord and Cisco—rather than educators and local, democratic governance—are deciding what students learn in local schools.

CTE is a rebranding of what has been traditionally called vocational education or voc-ed, the practice of teaching career and workplace skills in an academic setting. While years ago, that may have included courses in woodworking, auto mechanics, or cosmetology, the new, improved version of CTE has greatly expanded course offerings to many more “high-demand” careers, especially in fields that require knowledge of science, technology, engineering, and math (STEM).

Education policy advocates across the political spectrum, from Education Secretary Betsy DeVos to former First Lady Michelle Obama, have praised expansions of CTE programs in schools. Fast-tracking federal funds for CTE programs in schools has become the new bipartisan darling of education policy. CTE lobbyists and advocates have successfully pressed for expanded funding of their programs at federal and state levels. And a 2019 study by the American Enterprise Institute, a right-wing advocacy group based in Washington, D.C., found that since 2004, mentions of CTE in U.S. media outlets “have grown over tenfold, and they have doubled since 2012.”

According to a September 2019 analysis from Brookings, “more than 7 million secondary school students and nearly 4 million postsecondary students were enrolled in CTE programming.” And a 2018 review of CTE programs by the federal government’s National Center for Education Statistics found 73 percent of school districts offered CTE courses that give students both high school and postsecondary credit, a potential benefit for students and parents who want to reduce the cost of college.

What has folks in Chesterfield County, Virginia, concerned is the particular brand of CTE that has come to their district. At a September 2019 community event, middle school teacher Emma Clark and others mentioned the district’s collaboration with Ford Next Generation Learning (NGL), an offshoot of the Ford Motor Company that claims, according to its website, that it “mobilizes educators, employers, and community leaders to create a new generation of young people who will graduate from high school both college- and career-ready.”

Chesterfield parents I spoke with also pointed to the district’s collaboration with the Cisco Networking Academy, an offshoot of the computer networking giant that has its own branded course offering in the Chesterfield CTE curriculum.

In a phone conversation, Clark described the district’s collaborations with these companies as “new layers” of school privatization. First, corporations like these can use the rush to CTE to flood schools with new course offerings that require technology the schools have to buy. And another layer is the CTE programs businesses help to create provide them with free job training.

The concern Chesterfield teachers and parents have about corporate influence in K-12 public school curricula is magnified enormously due to the entrance of Amazon into the equation.

The “centerpiece” of Virginia’s successful effort to lure Amazon to build a new headquarters in the state, according to state-based news outlets and state-issued reports, was a commitment to more than double Virginia’s tech-talent pipeline, beginning in K-12 schools.

“Virginia’s ultimate proposal was centered around an effort to provide Amazon—or any other tech firm that wanted to come—with all the educated workers it needed,” according to a report in the Washingtonian, and the state sealed the deal with a pledge “to plow $1.1 billion into tech schooling.” The state’s commitment to developing a tech-talent pipeline providing workers for Amazon and other companies was key to inking the deal, says an Amazon spokesperson in the Cincinnati Business Courier.

“We’re being hijacked in Virginia,” Kathryn Flinn explained to me. Flinn is a 20-year resident of Chesterfield and mother of two children, one a special-needs child, who both have attended Chesterfield County Public Schools.

This powerful article appeared recently on the front cover of the New York Times Week in Review section.

Nicholas Kristof and his wife Sheryl WuDunn returned to his hometown of Yamhill, Oregon. They discovered that an extraordinary percentage of the hardworking, ordinary working class people Nick grew up with had died an early death. They asked “Who Killed the Knapp Family?” I regret that they include the obligatory swipe at “failing schools,” since the schools attended by this family did not fail them and did not kill them, but the rest of the article is indeed an indictment of the vast social, cultural, and economic unraveling of our society, as represented by this one community.

YAMHILL, Ore. — Chaos reigned daily on the No. 6 school bus, with working-class boys and girls flirting and gossiping and dreaming, brimming with mischief, bravado and optimism. Nick rode it every day in the 1970s with neighbors here in rural Oregon, neighbors like Farlan, Zealan, Rogena, Nathan and Keylan Knapp.

They were bright, rambunctious, upwardly mobile youngsters whose father had a good job installing pipes. The Knapps were thrilled to have just bought their own home, and everyone oohed and aahed when Farlan received a Ford Mustang for his 16th birthday.

Yet today about one-quarter of the children on that No. 6 bus are dead, mostly from drugs, suicide, alcohol or reckless accidents. Of the five Knapp kids who had once been so cheery, Farlan died of liver failure from drink and drugs, Zealan burned to death in a house fire while passed out drunk, Rogena died from hepatitis linked to drug use and Nathan blew himself up cooking meth. Keylan survived partly because he spent 13 years in a state penitentiary.

Among other kids on the bus, Mike died from suicide, Steve from the aftermath of a motorcycle accident, Cindy from depression and a heart attack, Jeff from a daredevil car crash, Billy from diabetes in prison, Kevin from obesity-related ailments, Tim from a construction accident, Sue from undetermined causes. And then there’s Chris, who is presumed dead after years of alcoholism and homelessness. At least one more is in prison, and another is homeless.

We Americans are locked in political combat and focused on President Trump, but there is a cancer gnawing at the nation that predates Trump and is larger than him. Suicides are at their highest rate since World War II; one child in seven is living with a parent suffering from substance abuse; a baby is born every 15 minutes after prenatal exposure to opioids; America is slipping as a great power.

We have deep structural problems that have been a half century in the making, under both political parties, and that are often transmitted from generation to generation. Only in America has life expectancy now fallen three years in a row, for the first time in a century, because of “deaths of despair.”

“The meaningfulness of the working-class life seems to have evaporated,” Angus Deaton, the Nobel Prize-winning economist, told us. “The economy just seems to have stopped delivering for these people.” Deaton and the economist Anne Case, who is also his wife, coined the term “deaths of despair” to describe the surge of mortality from alcohol, drugs and suicide.

The kids on the No. 6 bus rode into a cataclysm as working-class communities disintegrated across America because of lost jobs, broken families, gloom — and failed policies. The suffering was invisible to affluent Americans, but the consequences are now evident to all: The survivors mostly voted for Trump, some in hopes that he would rescue them, but under him the number of children without health insurance has risen by more than 400,000.