• COVID-19 Will Not Make Income Inequality Worse

    Let’s assume that we beat COVID-19 over the next month or two and then reopen the economy. What happens next? Some economists believe the shock of the pandemic will produce a traditional recession and a traditional long recovery. Others think we can bounce back pretty quickly. I happen to be in the latter camp, but either way it’s worth pushing back on stuff like this:

    “There will likely be some permanent damage inflicted on the economy,” says Greg Daco, chief US economist at Oxford Economics. “What this shock is doing is exacerbating preexisting inequality issues across the country. The individuals who have been hit the hardest are the individuals who were in the most precarious position to start with.”

    This is just not true. The coronavirus rescue bill is immensely progressive, providing far more money to the poor than to the rich. Here’s a rough calculation of benefits at both ends of the income spectrum:

    For the four months she’s out of work, a low-income worker would see her annualized income rise from $25,000 to $45,600. The high-income worker would see her annualized income drop from $80,000 to $57,350. This is due mostly to the flat $600 unemployment bonus that everyone gets regardless of previous income.

    Whatever else you can say about this, it reduces income inequality. For a few months, anyway.

    This doesn’t mean there are no low-income workers who will suffer economically from the COVID-19 pandemic. Of course there will be. But for the vast majority, their income will either stay the same (if they remain employed) or increase considerably (if they lose their jobs). This is one of the reasons I think we’ll be able to bounce back from our artificial recession fairly quickly.

  • Rural California Is Having a Hard Time Accepting COVID-19

    On the road in rural California.Kevin Drum

    The LA Times tells us that rural California is having trouble accepting the fact that COVID-19 doesn’t stop at the borders of big cities:

    Deeper inland, Joe Tanner, who was recently named city manager of Lindsay, a town of about 13,400 residents, is facing resistance from retail shops refusing to shut down.

    The town took immediate and obvious measures to take the governor’s March emergency declaration seriously from the start, Tanner said. Officials established social distancing measures at government facilities, closed the police department lobby and installed plastic shields at the finance department, where residents pay utility bills.

    Still, they’ve struggled to get a few nonessential stores to close, despite calls from the county and efforts from the city to educate them on the importance of restricting contact with others, he said. The City Council is planning to vote on an emergency ordinance to fine the stores and could also force closure, he said.

    Because of Lindsay’s rural lifestyle and its location away from major highways, he said, some may think it’s safe. “There is still an element of the community that we still need to educate,” he said.

    Maybe this is just the natural reaction of rural residents. Maybe it’s because this is Trump country and they believe it when Sean Hannity tells them that the pandemic has been exaggerated by the liberal media. Or maybe they’re just like everyone else, refusing to take it seriously until they start seeing cases on their doorstep.

    In the best case, rural America will get lucky: the countermeasures taken everywhere else will suppress the pandemic before it has a chance to move into less-populated areas. In the worst case, rural America will act as a brand new pool of COVID-19 cases that will restart the spread of the virus after we thought the worst was over. Stay tuned.

  • This Week Brings Another 6 Million Unemployment Claims

    Laid-off workers filed another 6 million unemployment applications this week. That brings us to 16 million coronavirus-related claims. I will once again say that this is good news: it means lots of people are applying for the expanded unemployment benefits in the rescue bill, and they’ll be kept whole until the COVID-19 countermeasures are lifted. When that happens, their savings will be intact and their consumption behavior will be unchanged.

    Despite the best efforts of the news media to pretend otherwise, have you noticed that there’s surprisingly little economic panic right now? Obviously there’s some because the rescue bill doesn’t rescue literally everyone. But if we had unemployment like this caused by a normal recession, the panic would be palpable. Instead we have people delaying rent payments a bit, dipping into savings temporarily until the unemployment checks arrive, and making jokes about Netflix. Under the circumstances, people are taking this surprisingly well, and that’s because they know that help is on the way.

  • Coronavirus Growth in Western Countries: April 8 Update

    Here’s the coronavirus growth rate through April 8. Italy continues to decline. The United States trendline hasn’t changed since yesterday. Germany is showing some acceleration and no longer looks like it’s close to peaking:

    For what it’s worth, the quickest rule of thumb for estimating coronavirus deaths has always been, “We’re all Italy now.” Italy peaked on April 1 at about 13,000 deaths, which suggests something like 25,000 deaths by the time the pandemic subsides. If we’re on the same track but with 5.5x the population, we’ll suffer 137,000 deaths. However, we appear to be consistently a bit below the Italian trendline, so it’s probably more like 100-120,000 deaths. This is consistent with my read of the daily growth rate, but well above the IHME projection. I hope the experts are right this time.


    How to read the charts: Let’s use France as an example. For them, Day 0 was March 5, when they surpassed one death per 10 million by recording their sixth death. They are currently at Day 34; total deaths are at 1,815x their initial level; and they have recorded a total of 162.5 deaths per million so far. As the chart shows, this is above where Italy was on their Day 34.

    The raw data from Johns Hopkins is here.

  • Airlines Suspended China Flights Before Trump Did

    Dan Anderson/ZUMA

    Since Donald Trump is once again boasting about his semi-ban on travel from China, I’d like to remind everyone of something that seems to have disappeared down the memory hole. Here is the New York Times on January 31:

    Moving to counter the spreading coronavirus outbreak, the Trump administration said Friday that it would bar entry by most foreign nationals who had recently visited China and put some American travelers under a quarantine as it declared a rare public health emergency. The temporary restrictions followed announcements by American Airlines, Delta Air Lines and United Airlines that they would suspend air service between the United States and China for several months.

    Trump didn’t act until after the three biggest American airlines, along with nearly every other international airline, had already suspended flights to China. In other words, when it didn’t really matter anymore. He didn’t have the guts to do it before then.

  • Lunchtime Photo

    In Los Angeles, COVID-19 is starting to spread among the homeless population. This has the potential to be truly disastrous since, as you can imagine, the homeless tend to have a lot of pre-existing conditions. They’re also older than average and have less access to hygeine and sanitation. Both the city and county are trying to expand testing on skid row, but that’s a challenge among a population that’s suspicious of authority and moves around a lot. A recent study estimated that 2,500 of LA’s 60,000 homeless could eventually end up infected with the coronavirus.

    March 10, 2020 — Los Angeles, California
  • Study Says Republicans Aren’t Taking Social Distancing Seriously

    A year ago, I would have said that even in these polarized times there were some things that would remain nonpartisan. A major pandemic, for example. It’s not as if there’s a liberal ideology vs. a conservative ideology when it comes to defeating a virus.

    Time has proven me very, very wrong, of course. These days, conservative ideology is whatever Donald Trump says it is, and since he downplayed the seriousness of COVID-19 early on, the rest of the conservative movement has downplayed it too. As a result, Democrats and Republicans are hearing different messages about just how important social distancing and other countermeasures are. A new study quantifies this:

    Our empirical results show that partisan gaps in beliefs and behavior are real. GPS evidence reveals large partisan gaps in actual social distancing behaviors. Survey evidence shows substantial gaps between Republicans and Democrats in beliefs about severity and the importance of social distancing. The raw partisan differences partly reflect the fact that Democrats are more likely to live in the dense, urban areas hardest hit by the crisis, and to be subject to policy restrictions—in other words, to face stronger individual incentives for social distancing. Even after controlling carefully for such factors, however, the partisan gaps remain statistically and economically significant. While our evidence does not permit us to conclusively pin down the ultimate causesof partisan divergence, the patterns are consistent with the messaging from politicians and media having played an important role.

    The study includes charts showing exactly how big the difference is between Democrats and Republicans, but you can see it more dramatically in a pair of maps. The top map, based on GPS data, shows how much social distancing has changed since January. Blue means it’s changed a lot; red means it hasn’t changed much.

    The bottom map is Republican vote share in the 2016 election. Blue represents Democrats; red represents Republicans.

    They aren’t quite identical, but they’re pretty close. Trump and Fox News and Rush Limbaugh and all of Trump’s other acolytes are probably getting people killed—and it’s concentrated among the people who voted for Trump in the first place. That’s an irony, I suppose, but not one I can take much pleasure in.

  • Coronavirus Growth in Western Countries: April 7 Update

    Here’s the coronavirus growth rate through April 7. Italy continues to decline. Germany is still climbing, but showing signs of getting near its peak. The data from France continues to be noisy as hell. Several correspondents tell me this is because France only counted deaths in hospitals for the first couple of weeks, but then started counting deaths in nursing homes too. That’s when the death rate started to zoom upward and got messy.

    The death toll for the United States continues to show glimmers of flattening:

    The growth rate of daily deaths continues to slow down and now suggests a peak sometime in the middle of next week. Total deaths at peak now looks to be around 50-60,000, which suggests a total death toll of around 100-120,000 through June. As usual, this all depends on how well we keep up our countermeasures. Overall, though, things are looking better now than they did a couple of weeks ago.


    How to read the charts: Let’s use France as an example. For them, Day 0 was March 5, when they surpassed one death per 10 million by recording their sixth death. They are currently at Day 33; total deaths are at 1,724x their initial level; and they have recorded a total of 154.4 deaths per million so far. As the chart shows, this is above where Italy was on their Day 33.

    The raw data from Johns Hopkins is here.

  • Donald Trump Is Still Looking For a COVID-19 Fall Guy

    Chen Junxia/Xinhua via ZUMA

    Donald Trump has discovered  yet another new enemy:

    Donald Trump hunted for a new scapegoat on Tuesday in an increasingly frantic attempt to shift blame for thousands of American deaths from the coronavirus, accusing the World Health Organization (WHO) of having “called it wrong” and being “China-centric”….The president has repeatedly denied responsibility and sought to blame China, the Obama administration and the media. On Tuesday, with the US death toll exceeding 12,000, he unleashed a tirade at the WHO, even though it raised the alarm in January, after which he made statements downplaying it and comparing it to the common flu.

    The basic gripe against WHO is months old and has to do with the praise for China’s response to the initial coronavirus outbreak in Wuhan that was meted out by WHO Director-General Tedros Adhanom Ghebreyesus. He acted much like Anthony Fauci, who plays the same role around Donald Trump.

    This criticism of Dr. Tedros dates back to early February and died out soon after, but for some reason it only hit Fox News a few days ago. Naturally, it then morphed into wild accusations of dereliction of duty and being a captive of Chinese influence. After letting this marinate for a few days, Trump got on the bandwagon today and laid into WHO. The entire Republican Party will be on board soon, I’m sure.

    WHO isn’t blameless here, but make no mistake: this is just Trump’s latest attempt to blame someone, anyone, for the late US response to the COVID-19 pandemic. It can’t be his fault, after all, can it?