• Expanded Unemployment Benefits Will Start This Week

    We have good news and bad news on the unemployment benefit front:

    The federal government will this week release funds from a coronavirus stimulus package to boost jobless benefits, but how quickly those payments reach laid-off workers depends on overburdened state unemployment systems, the head of the U.S. Labor Department said in an interview….He said funds to increase jobless payments by $600 a week—more than double the existing maximum in some states—will be distributed to states this week, but he doesn’t know when states will make such payments to individuals. The enhanced benefits were included in the roughly $2 trillion stimulus package that was recently signed into law.

    So the firehose is connected to a hydrant and ready to go, but we’re not quite sure when the hook-and-ladder will get it to where the water is needed.

    But it should be soon. I keep hearing that the “creaky” unemployment systems at the state level are going to be a problem, and sure, 3 million new claims in a single week is a lot. On the other hand, during the height of the Great Recession states processed nearly that many new claims each month for over a year. That’s a pretty big number too, so those systems can’t be all that creaky.

  • Is It Unfair to Pay the Unemployed More Than Those Still Working?

    Katrina Kochneva via ZUMA

    A reader emails me with a complaint after reading about the very generous unemployment benefits in the coronavirus rescue bill:

    I would like to draw attention to a major flaw in the unemployment formula. I work in a grocery store, the epicenter of panic and the only place people can congregate—and believe me, they congregate. I’m deemed an essential worker. Basically if I don’t go to work, society collapses and you all starve (hyperbole, maybe? Maybe not).

    I bring home between $550 and $650 a week. If I were laid off, I would be bringing home over $850. How is that fair? Why should we put our lives at risk for people who can’t stay home even when the government pays them to? Why shouldn’t we shut the grocery stores?

    That’s a very good question, isn’t it? Back in 2009, a similar question paralyzed action during the Great Recession. From a macroeconomic point of view, giving mortgage relief to households would have been a very good idea. But at a personal level, people objected to the idea of doling out cash to homeowners who had lied about their income when they bought a big house or used a refi to install a shiny new kitchen. Why help them when those of us who had been prudent weren’t getting anything?

    This is very much the same. The broad economic goal of the unemployment expansion is to give lots of money to people who are likely to spend it, which is those with low incomes. But on a personal level, that feels deeply unfair. Why should they get more than me just because they got laid off and I didn’t?

    The best answer I have is that giving in to that sense of resentment turned out to be a terrible idea back when mortgages were at the heart of an economic meltdown. We should have sucked it up and doled out the cash even though it felt unfair in some cases. It’s now eleven years later, and hopefully we’ve learned our lesson: this time we’ll dole out the cash in the most efficient and targeted way possible even if it feels unfair in some cases.

    On a personal level, the best I can say is that there’s a lot of luck inherent in life. Sometimes you’re the lucky one and sometimes you’re not. In the great scheme of things, this is a fairly minor and temporary bit of luck and I can hardly begrudge it to people who have been on the short end of the stick their entire lives.

    BY THE WAY: This is why I’m not a politician. I’m sure this answer would convince no one who lacks pointed ears. But I’ll bet Bill Clinton could whomp up something good in a few minutes of free time.

  • The Story Out of Wuhan Is Not Very Comforting

    Wuhan is where the coronavirus originated, and Wuhan is therefore the first place we’re seeing it end. But are we? Wuhan is “reopening,” but their version of reopening is more stringent than our version of total lockdown:

    People are allowed out of their residential complexes only if they have a return-to-work pass issued by their employer, and only if the government-issued health code on their cellphone glows green — not orange or red — to show that they are healthy and cleared for travel. Residents report that some complexes deemed infection-free have quietly lost that status, without explanation.

    In the malls that opened this week, people must stand five feet apart on escalators, and clothes that customers have tried on must be sprayed with disinfectant. Subway passengers must wear masks and sit two seats apart; footage on state media showed near-deserted cars and stations.

    But even with all these restrictions still in place, apparently it’s not working:

    Chinese authorities are discovering that allowing people — even those without fevers who are wearing surgical masks and are doused in hand sanitizer — to get too close to each other risks a new rise in infections. Recent media reports have focused on “silent carriers,” and studies have found that as many as one-third of people infected with the coronavirus show delayed or no symptoms. “The possibility of a new round of infections remains relatively high,” National Health Commission spokesman Mi Feng said Sunday.

    This is pretty bad news. Wuhan isn’t showing a “steady decline” in new cases. They haven’t “passed the peak.” They have literally gone to zero and stayed there for nearly two weeks:

    Despite this, and even with fairly stringent social distancing measures remaining in effect, they are still shutting down movie theaters and karaoke bars and have continued their ban on foreigners entering China.

    The next few weeks will be critical for the rest of us. As I mentioned this morning, the key to understanding the spread of COVID-19 is understanding how well various countermeasures work. Wuhan is our first field test of this. If it fails even with countermeasures still in effect nearly a month after the number of new cases had dropped to less than 2 percent of their peak—and a week after new cases had gone to zero—we might have a very long wait ahead of us.

    We’re about two months behind Wuhan. If we follow their path, we’ll be in lockdown at least through the end of May. Probably longer, since our countermeasures will never be as draconian as theirs. End of June?

  • Coronavirus Growth in Western Countries: March 30 Update

    Here’s the coronavirus growth rate through March 30. I have gotten many emails from Swedes telling me that weekends are sacred in Sweden and that’s why their numbers didn’t go up much on Saturday or Sunday. Nobody was at work to report them. Sure enough, they took a big jump on Monday and are now back on the Italian track. You can read more here about Sweden’s fatalistic approach to the pandemic. “Yes, there has been an increase,” explains their chief epidemiologist, “but it’s not traumatic so far. Of course, we’re going into a phase in the epidemic where we’ll see a lot more cases in the next few weeks, more people in the ICU, but that’s just like any other country — nowhere has been able to slow down the spread considerably.” Apparently the government is so trusted in Sweden that everyone is buying into this. It’s possible that we’re conducting a high-stakes field test here of whether high trust in government is necessarily a good thing.

    FWIW, I’ve gotten some similar emails about Germany, suggesting that their low death rate is because they aren’t recording lots of COVID-19 deaths properly.  That could be, but I’d suggest that their death rate isn’t really all that low, so there’s nothing much to explain. Switzerland and the US are the only two countries that look solidly below the Italian trendline. Canada probably is too, but it’s a little too early to tell.

    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 25; total deaths are at 505x their initial level; and they have recorded a total of 45.2 deaths per million so far. As the chart shows, this is slightly below where Italy was on their Day 25.

    The raw data from Johns Hopkins is here.

  • We Have No Idea How Many People the Coronavirus Pandemic Will Kill

    Jack Kurtz/ZUMA

    It’s worth a quick note to point out that we no longer have any real idea of how deadly the coronavirus pandemic is going to be in the US. We’ve long since passed the point where the key to understanding the likely spread of the pandemic was a better understanding of the virus itself. What matters going forward is the countermeasures we put in place to stop its transmission routes.

    Somebody should feel free to stop me if I’m wrong here, but we’re in terra incognita on that score. We’ve never had a widespread pandemic where we’ve put in place strict and widespread countermeasures, and that means we’re just guessing at how effective they are. The guess of an epidemiologist might be better than the guess of a blogger, but it’s still just a guess. We simply have no experience to draw on.

    When this is all over we’ll spend years trying to assess which measures worked well and which ones didn’t. But even with time it will be difficult to untangle all the various threads and make sense of them. We don’t have that time now, so we’re flying blind.

    This is the main reason you see estimates ranging wildly from 80,000 deaths to half a million. These size of the estimates all depend on which countermeasures you think we’ll adopt; how well they’ll work; how long we’ll keep them in place; and how seriously people will take them. Unfortunately, even the smartest epidemiologist in the world has a limited insight into things like that. So we just don’t know.

  • Here’s a Quick Primer on the New, Expanded Unemployment Benefits

    Would you like some more details about the hugely increased unemployment benefits in the coronavirus rescue bill? Sure you would. Here’s a short Q&A:

    Who qualifies for expanded unemployment benefits? All the gory details are here (starting in Section 2101) but here’s the nickel summary.

    Covered individuals include anyone normally eligible for unemployment benefits under your state’s laws. Additionally, you are covered even if you are (a) self-employed, (b) seeking part-time employment, (c) do not have sufficient work history, (d) otherwise wouldn’t qualify for regular unemployment benefits, or (e) you have exhausted your normal and emergency benefits under state law.

    You are not eligible for benefits if you can telecommute or you’re on sick leave.

    You must provide self-certification that you are unemployed or partially unemployed or unavailable to work because:

    • You or a family member has COVID-19.
    • You are providing care for a family member with COVID-19 or for a child whose school is closed.
    • You can’t get to work because of a quarantine or self-quarantine.
    • You were scheduled to start work but your job was canceled or you are unable to reach the job due to COVID-19.
    • Your place of employment is closed or you have to quit your job due to COVID-19.
    • You are the main breadwinner for your household because your spouse died as a direct result of COVID-19.

    How much will you get?

    • You will receive what you would normally get under your state’s laws plus $600 per week.

    Even if you are not eligible for benefits under your state’s laws (for example, because you are self-employed) you will still receive:

    If you apply for benefits in March and use them through July, you will receive your regular benefits plus approximately $12,000 in expanded benefits. That’s ten times the amount you’ll get from the stimulus checks.

    How long will you get expanded unemployment benefits?

    • Normal extended benefits are authorized for a period of 39 weeks between January 27 and December 31.
    • The $600 bonus is authorized through July 31, 2020.
    • There is no one-week waiting period. Benefits begin as soon as you become eligible.

    Beyond this there are some fiddly details that apply to a very small number of people. (For example, if you’ve exhausted your normal benefits you don’t qualify for expanded benefits if you are receiving unemployment compensation from Canada.) For the vast majority of you, however, this post tells you most of what you need to know.

  • Lunchtime Photo

    Friday was dex day, which means that Friday night was dex night. I eventually got bored and decided to get in my car and roam around looking for pictures to take. Neither of the things I had in mind panned out, but eventually I ended up near the Segerstrom Center for the Arts. That turned out to be a nice place to stop.

    This is a picture of Segerstrom Hall, the first concert hall built at the center. It takes a nice picture at night, doesn’t it? It is sadly empty in these virus-infested times, but I can assure you that all its employees are hard at work at home. Right, inkblotsaunt?

    March 28, 2020 — Costa Mesa, California
  • Other Countries Are Spending More Than Us On Coronavirus Rescue Packages

    Congress recently passed a $2.2 trillion rescue package to deal with the economic fallout from the COVID-19 pandemic. How does that compare to what other countries are doing? Here’s a very rough answer:

    These comparisons are hard to make since every country had different safety net provisions in place even before the pandemic. It’s also hard to directly compare different kinds of assistance. Usually, though, media reports converge on something like “_____ passed a package worth $_____” and that’s the number I used.

    This suggests that the US is likely to need a further stimulus bill, perhaps another $1-2 trillion. Luckily, the normal Republican reluctance to help the economy during a Democratic administration no longer applies, and Donald Trump is desperate for the biggest spending package he can get. I doubt he even cares what’s in it.

    Another thing worth noting for lefties who are concerned/outraged/disgusted over the $500 billion corporate bailout that was part of the rescue bill: nearly every other country is doing the same thing. (The hardy capitalist Swiss are the exception.) Like it or not, it probably needs to be done if we want our economy to be ready for a bounceback when the pandemic is finally over. And remember: they’re just loans. We’ll get the money back eventually.

  • Our Recent Pandemic History Hurt Our Response to COVID-19

    Mexican President Andrés Manuel López Obrador has been, if anything, far worse than President Trump on the coronavirus front. Keep hugging and kissing! Go to restaurants! Keep the economy going! But that’s finally changed:

    As virus cases have begun surging, the president and his team have shifted their message radically in recent days, urging people to stay home and to practice physical distancing — and warning of dire results if that advice is ignored.

    ….“Don’t go out into the street unless it is for something absolutely necessary,” López Obrador told the nation in a sober YouTube address Friday evening from the northern border city of Tijuana. “We have to be in our homes. We have to maintain a safe distance.”

    ….An even more dire appraisal came late Saturday from Hugo López-Gatell, undersecretary of health and the president’s coronavirus point man. “This is the last chance we have. We can’t lose it,” López-Gatell said in a somber-toned news briefing. “We are saying to everyone: ‘Stay at home.’ … It’s the only way to reduce this virus.”

    In the case of people like Trump and López Obrador, their unwillingness to face up to the danger of the coronavirus pandemic is probably rooted in their personality. Still, the truth is that virtually every country responded slowly and deficiently at first, unwilling to take the virus seriously when only two or three deaths had been recorded. But why? Surely they all knew that two or three deaths meant the virus was well established already and there was no chance it would simply die out on its own? Part of the answer might be rooted in recent history.

    • In 1976 the United States reacted almost instantly to a single case of swine flu that turned out to be . . . a single case of swine flu. The response was widely judged a fiasco after the fact.
    • In 2003 SARS broke out in Asia, producing panic around the world. In the end, only 8,000 people were infected and fewer than a thousand died.
    • In 2009 we had another outbreak of swine flu. It killed about 12,000 people in the US, less than a normal flu season.
    • In 2012 MERS broke out in the Middle East. It had a high mortality rate but turned out to be hard to get. The death toll since 2012 is still under a thousand.

    In other words, there have been a lot of false alarms over the past few decades, and that probably contributed to an initial reluctance to take drastic measures based on inconclusive evidence. Remember that for all the uproar about how late the US responded, just about everyone else responded late too. Even the World Health Organization took until March 11—when there were already more than 100,000 confirmed cases—to declare COVID-19 a pandemic.

    Sometimes a knowledge of history is helpful. Sometimes it’s the opposite. In the case of COVID-19, all the recent episodes of relatively limited pandemics produced a sense of wait-and-see that turned out to be deadly. In this case, history was not our friend.