Twenty million jobs lost in April as unemployment jumped officially to 14.7 percent—a figure that no doubt understates the issue, and a graphic in the NY Times illustrates just what that looks like.
There is perhaps one bright spot: 80 percent of those unemployed believe they have been temporarily laid off and expect to return to their jobs in the coming months. But some experts disagree with that, arguing that these furloughs are permanent, not temporary and that the optimism is misplaced.
The key question is, what do we do to stem this?
The administration has largely doubled down on the strategy of trying to get states to re-open as a way to re-start the economy. While that is tempting, in the end for a lot of reasons I don’t think that will have the effect they want.
For one thing, re-opening is likely to start driving up the infection rates and the death tolls. That will swing the pendulum back and ratchet up the pressure to shut things down again. We have seen the models for what is likely 
to happen in the next two months—and that is going to make it hard to really re-open, and harder still to get any economic benefit from doing so.
Another problem is that people are not dumb. Just because the governor says re-open doesn’t mean people will go back to business as usual. Oh sure, some will. Some will go to restaurants, line the beaches and take unnecessary risks.
FiveThirtyEight in an article earlier this week noted that “on the front end of this crisis, Americans weren’t deciding what to do based on politics. Americans living in red states appear to have taken the crisis plenty seriously; data shows that residents there were staying home well before their governors issued stay-at-home orders.”
And on the back end of the orders, you will probably see the same thing. Even if they are not required to, most Americans are not going to chance going back to business as usual.
That probably means two things—that the dire predictions on new deaths is too high, especially if high risk locations figure things out, and it means that the chances for recovery are lower than expected.
In the end, I think re-opening too soon will not restart the economy because there will be a lack of confidence by reasonable people—at least that it is safe to do so and it will prolong this outbreak.
Instead, I would recommend a different approach. Cushion the economy as much as possible. Use the government to give people unemployed $2000 a month. Use the government to bail out key industry like hospitality and entertainment that you can’t transition. And then use the time we buy to transition other segments of the economy away from being contact-based.
Washington right now doesn’t seem to like the idea of the ongoing stimulus payment. I get it. They are afraid that deficits will soar. They will. But guess what, they are anyway because people’s tax payments are falling. Might as well cushion the economy.
There is fear that people won’t work if they can get their $2000. That’s probably true for some people. But this is a temporary solution and if they don’t want to work, they can stay at home and not risk getting sick or getting others sick.
If we keep key businesses afloat, they will be more likely to rebound than if we allow them to fail. People on both sides of the divide don’t like this—I get it. But once again, this is an emergency. It will be much harder to restart the economy if businesses fail than if we keep them afloat.
Third, there are businesses that can safely open. What was interesting was hearing from the key sectors about how they managed to keeping their businesses open.
First, the employees that could work from home—are. I still think there are a large number of people who commute from home that don’t have to do that every day. They found that productivity wasn’t bad. People get used to change and they figure out ways to get their work done.
Second, there are protocols for people working in the office. Temperatures at the door. That of course doesn’t capture the asymptomatic but, then again, we still don’t know even relative contagion levels there. Gloves and masks. Social distancing. Frequent disinfection. You definitely don’t want to pack a room and I see a few businesses that are not doing enough to protect their employees from themselves—but this is something that can be employed when people have to go to work.
Third, a lot of businesses can function. Most retail you can switch to online interfaces, and then pick ups or deliveries. There is no reason why people have to go into stores these days.
Restaurants can switch to ordering at the door and delivery. I have seen a bunch of restaurants that don’t even let their customers in. They simply order at the door, pay. And they either have ordered in advance or they wait outside until the food is ready.
Consultants and therapists and even some doctors’ appointments can happen via video.
Barry Broome on Thursday noted that a lot of their work can be done via Zoom. But getting creative and collaborative needed person-to-person interaction. I guess it also depends on the setting, because I have actually found that three-person Zoom meetings and brainstorming can work even remotely.
I think if the government can prop up people and industry with ongoing infusion of money, the economy can slowly start to adapt and rebound. There will be businesses that fail. But there will also be new businesses that emerge which are prepared to meet the new demands.
None of this is a replacement for re-starting the economy, but I think what we are going to find is that people don’t want to re-start it now and most will err on the side of caution With proper protocols, a lot of businesses should be able to operate—and we should allow them to do so.
—David M. Greenwald reporting
They’re already getting an extra $2600/month in addition to their state unemployment pay.
Ya think? I’ve read where some restaurant owners have tried to hire back their workers only to find that they’re saying no because they’re making $50,000/year sitting at home. Add $2000 more a month to that equation and they will be making $74,000/year.
What incentive is there for them to want to return to work?
They don’t need to. This isn’t a permanent fix. It’s a temporary one. Others will no doubt want to work.
They won’t want to for that much money. I don’t think the Democrats in the House or you have a clue what you’re proposing.
You’re missing a key point – whether it is for three months or six, the benefits are not going to last forever. If people turn back jobs, they will lose their jobs and they won’t be able to return in a few months because their employers will have moved on.
You and others are so worried about the economy, but you’re not willing to cushion it. Sorry, I don’t agree with your approach.
You don’t cushion the economy by paying people in many cases over double what they were making while employed as the country is running its debt to the moon. That’s insane.
Running the debt to the moon is likely to create inflation when the increased money supply and the velocity of economic activity increase somewhere down the line. Most other economies are doing the same right now so the there is little danger that the dollar will not remain the world reserve currency because of our current spate of money printing. The danger that you are concerned about is the moral hazard of dis-incentivising work but that is a minor problem.
The big problem right now is the 54 billion dollar deficit the Governor announced for the state government and a deadlock in DC about addressing it. That is only the state deficit and doesn’t include counties and cities. Of course much of that money is passed down to local government and schools from the State so we are likely to see a huge austerity impact with its accompanying diminished multiplier effect rippling through the local economy in a potential shock that will devastate Davis. Davis is a big government town with many state, county, city, university and school employees. The moral hazard of generous unemployment benefits at the present moment shouldn’t be our biggest worry.
Or, closed.
Seems to me that the biggest problem will occur when the assistance comes to an end.
I don’t think there are any easy answers.
Hmmm. Maybe those workers were being underpaid as it was? We’ve already had a problem of overaccumulation of wealth. This is the type of policy that could force owners to share more with workers. And you say, well prices will go up. But not if landlords realize that they need to reduce their rents to keep those businesses around. Empty storefronts do not deliver income.
Jeff
Are you denying more people will die if the society is “opened up”? Because not even Trump is denying that.
Or are you denying people will die ( suicide or other-self destructive behaviors) if we do not open up? Because that is a specific GOP claim.
So who are you accusing of making up a claim of increased deaths?
Jeff, I understand from your responses to numerous articles about the coronavirus pandemic that you might do things differently. So, I am curious, if you were able to be in charge of responding to the pandemic, what would be your approach? I’m interested in how someone with a very different world view would approach this. Thanks in advance for your thoughts.
Take the approach in Sweden except to lock down the senior housing facilities and also implement a policy to keep everyone 75 and over, and anyone with diagnosed compromised immune systems, sheltering in place with enhanced public services to help prevent them from leaving their houses unnecessarily.
I do agree that we ban large events until the threat has been reduced significantly.
Then allow all other business to stay open with guidelines to mitigate the spread. Run public service announcements that explain what we know about how the virus is transmitted and the real health risk and steps people should take to mitigate the risk, and allow people to decide themselves if they want to take the risk.
Good plan, sounds reasonable to me especially in Yolo County where they’ve only had 20 COVID deaths and 15 were tied to one nursing facility.
So if you didn’t live in that nursing home the Yolo death rate per capita is a lowly .002%.
Time to open things up.
GSAC makes a similar arguing: https://www.greatersacramento.com/the-greater-sacramento-region-is-the-safest-region-in-the-u-s-for-businesses-to-reopen/
Some good ideas here. Two points:
1. Test, trace, and isolate must be part of any reopening plan and can start now with most recent cases. Can start now means that systems are in place to support such a program.
2. “Then allow all other business to stay open with guidelines to mitigate the spread“. This is important and the federal government must provide these guidelines.
BTW, the program that the Yolo Food Bank put into place to provide food at the doorstep of at-risk populations was designed to do what you are calling for in terms of enabling elderly and immuno-compromised to stay home. I hope people will support it. It is currently reaching over 2300 households (5500 people) per week. More could be done if resources were available.
Sweden has been brought up a lot recently – both pro and con. They are paying a price that I’m not sure some would consider too high to pay. I agree that any plan should include what Robb mentions – testing, tracing, quarantine guides. If you look at the numbers in Europe, only Sweden and the Netherlands have had a bad outcome – compared to neighboring countries.
And Sweden found that people were reluctant to work or go out anyway and their economy is just as bad off as everyone else’s.
Sweden has universal healthcare, not an insignificant difference. Since most of those who are being pushed to ‘return to work’ here are low paid employees with no or limited access to health insurance, I expect those pushing Sweden’s approach will also be calling for the implementation of Medicare for All.
Jeff, again, you’re wrong on this point.
The architect of the Swedish policy now says that it was a mistake: https://www.msn.com/en-us/health/health-news/swedens-covid-19-death-toll-horrifying-says-scientist/
No, I am not wrong. Sweden’s admitted mistake was not immediately locking down the senior centers and seniors getting care at home… not their approach to keeping most of their economy open. That is 75% of the deaths. That is the same that I would have advocated. That is the same that most intelligent and informed non-ideologues would have advocated in any case like this. Address the most vulnerable and don’t cause unnecessary harm and suffering of others.
This is the problem with boneheaded large government responses in that they go nuclear when a peashooter is required.
I think there is a big problem here when you are looking only at the deaths. A huge amount of the deaths in a lot of places are nursing homes and health care facilities. But that misses a huge swath of people who are getting sick – having to go to ER – we’re talking weeks turning into months. 50 days. Six weeks. Ongoing. My friend’s wife is now in intensive care. My friend just posted on Facebook how hard it was saying goodbye not knowing when or if she’ll be back. That’s the part of this story that is not being told and not showing up in the death stats. And btw, the economy in Sweden is no better than their neighbors.
It is WAY too easy to get your heart and your immediate fears to rule your head. You are supposedly a statistician and yet you blow past the actually statistics and stake your opinion on your personal experience of singular cases.
It is a pandemic. People will get sick and die. It is unreasonable to pursue some mythical goal of zero. It is not only unreasonable, it is macro economic suicide.
There are plenty of stats to bear this out. You ignore them. So why should I bother to repost them?
People will get sick and die. But you can reduce the number of people that get sick and die. It won’t be zero, but you seem to be arguing that the effort to reduce it from 250,000 in half is not worth it.
Now here’s another interesting case – Germany. They had re-opened, cases tripled, now about to shut down again – https://www.express.co.uk/news/world/1281241/germany-coronavirus-cases-jump-lockdown-lift-tougher-lockdown-rules-angela-merkel
Jeff
You must have missed the point is to “flatten the curve”, not totally eliminate the disease (we missed that opportunity months ago). You appear to be arguing that if the response isn’t perfect then we shouldn’t bother.
As to Sweden, yes, you are wrong. You are ignoring the fact that rest of the population is a vector into the population of the vulnerable and aged. It’s not possible to completely isolate them, and if the rest of the population is a carrier, often asymptomatic, then the disease still penetrates the vulnerable population. It’s inevitable with open circulation.
Please don’t include yourself in the category of non-ideologue. To do so, you need to demonstrate that you are willing to absorb information that doesn’t align with your preset world view and revise that view. You haven’t shown any evidence of doing this in your public statements.
Ha, that goes for about everyone that comments on here.
Posting a couple of graphics by request.
The graph is not ‘normalized’ for population… per capita stats would be far more informative… but, not my blog…
“but, not my blog…”
Really wish people would stop saying that. (A) someone else posted that, (B) someone else designed it, (C) it’s unnecessary to make your point.
I asked Don to put up these graphics as a follow-up to my comments and conversation with Jeff about Sweden. The top chart shows that Sweden (and the Netherlands) are somewhere between really efficient (Taiwan – where the vice pres. is an epidemiologist – and Norway, a country similar to Sweden) and the U.S., which is doing (IMHO) a really lousy job.
The bottom chart is a slide from the UCSF Dept. of Medicine Grand Rounds this week. It points out the significant disparities among ethnic groups on deaths.
By the way, the UCSF Medicine Grand Rounds which is on YouTube every 2nd Thursday is very interesting. A bit technical at times but the discussion from world experts is really authoritative and helpful if you are interested in some of the technical details.
And the big question is local… DJUSD, Yolo County, and City of Davis…
Yet, the article seems focused on what State and Feds can/should do…
Can we re-purpose this discussion to “local” (great doubt, there)…
The measure to increase DJUSD employee compensation is now rendered a “spit in the ocean” (or other bodily fluid) kinda of thing… Davis, Yolo, DJUSD revenues are ‘tanking’… no guarantee of State/Fed assistance… far from…
So going to the purported topic, “what do we do now?” That we actually, locally, have control over?
Should be interesting discussion… I have my suspicions of how the City/County/DJUSD discussion will go… as to cuts or enhancements (taxes) to revenues… particularly as union teachers in many districts, are demanding ‘hazard pay’, extra pay for distance learning, opening schools up in Jun/Jul being “extra”, etc. But, remember, “it’s for the kids!”… City and County should make huge cuts to loosen up money for the schools, and the teachers, staff, and administrators… or, much greater taxes on all…
Fundamentally, instead of saying “restarting” we should instead be saying “rethinking”. What was “normal” is not going to be so for a long time, if ever. And “normal” has been becoming increasingly problematic. We can’t turn back, even to the 1950s as the MAGA tribe desires. We’ve had one looming crisis requiring us to rethink how we proceed and now we have an even bigger crisis on our doorstep. It’s not time to be discussing a rushed reopening–it’s time to discuss what do we want our society to look like when we are ready to reopen.
Elon Musk opens Tesla assembly line today against Newsom’s orders.
We’re going to see much more of this, people need to get back to work.
https://www.washingtonpost.com
Here’s a better link, I tried to immediately edit but was timed out after about 30 seconds:
https://www.sacbee.com/news/coronavirus/article242657726.html
In the case of Tesla, if they don’t go back to work or the county or state try to close them back down Musk will move Tesla to Texas. Who wins then?
If going back to work and getting sick results in people suing we have no chance of ever getting out of this. Congress has already stated that in the next stimulus bill they’re looking at safeguards for businesses over this.
It’s actually against the orders of Alameda county, the state allowed them to go resume. FYI.
“Yes, California approved, but an unelected county official illegally overrode. Also, all other auto companies in US are approved to resume. Only Tesla has been singled out. This is super messed up!”
Correct, I just saw that. But it looks like the state’s and county’s lockdowns has cost CA future business.
Read more here: https://www.sacbee.com/news/coronavirus/article242657726.html#storylink=cpy
I don’t think Tesla should dictate health and safety in this state. So I’m not going to cry over it. Elon strikes me as a brilliant guy, but he acts like a spoiled baby way too often for my tastes.
That’s okay, I doubt Musk cares what you think anyway. I’m sure Texas or Nevada will love the revenue and jobs.
I agree – he doesn’t care what I think. I don’t care what he thinks, so it’s probably even. They may love the revenue and jobs, they may grow tired of the antics that come with them.
No it’s not even, Musk employs tens of thousands with great jobs and creates a lot of revenue for the county and state. How much do you create?
Indeed, I simply meant it’s even in terms of not caring what each other think.
Economic development is important for Davis, not for California – APPARENTLY
Tribal political ignorance. It is really quite breathtaking though… the city of retired liberal college professors that don’t understand where the dough that makes their bread originates from. I thank the lord every day that I did not select that career path for all the lacking knowledge it would have caused me.
Please stop with these kinds of disparaging generalizations.
I am sorry but this is statistically proven. And a very common problem that is important to understand. People have a worldview shaped by their life experience and career. In the decades of debating these issues it clear that there is this tremendous gap in understanding for how our economic system works to sustain the human condition. Economic development should NOT be up for debate, it is a requirement. You cannot block and shut-down the economy and then wring your hands over the resulting inadequate revenue to fund needed public-side services… unless you are ignorant or otherwise pushing some hidden agenda.
Sometimes the first step in progress to fix a problem is to develop self-awareness for individual and collective contribution to the problem.
“ I am sorry but this is statistically proven”
Actually that is a misnomer. You do not statistically prove things. Proofs are for mathematics. You can only show inference and correlation through statistics – and correlation does not prove causation it only shows linkages.
Keith O
Are you saying that Musk is above the law and the rule of a democratic government? Because he does need to care what we think if he wants to continue to operate, and also if he wants us to buy his cars and rooftop solar.
Jeff
You ignore the fact that there is a tradeoff in the present situation. You have not presented any kind of case that the loss of economic activity has greater consequences than the likely increased mortality rates from prematurely reopening. Your proposed “solutions” to contain the diseases have key fatal flaws that make them infeasible, but you are unable to admit this problem. Come forward with a real justification that the consequences of reduced activity is worse than an additional one million deaths (at a minimum) and then you can make your claims.
I doubt Musk cares whether you or any of your friends decide not to buy his products over this. There are others who will take your place and will buy his products precisely because he took a stand and opened back up.
LOL Pot calling the kettle black.
It is EXACTLY the lack of tradeoff analysis that I am most concerned about. And it is trade-off analysis considering the long-term big picture. To get there one has to shed their constraining emotions and focus on the facts and data at hand.
YOU CANNOT IMPLEMENT A COMMON SHUT-DOWN OF US ECONOMY TARGETING SOME UNATTAINABLE GOAL TO COMPLETELY MITIGATE THE RISK OF DEATH FROM A NOVEL VIRUS.
You simply cannot. That solution should have never been on the table… it should have never been allowed.
We spend billions on the CDC, NHI and medical research related to pandemics and yet we were unprepared. We counted on the government to have a plan in place, and instead we got a fear-based crisis response with decisions made on the fly to force extreme measures that will only cause long-lasting devastation to millions.
Why didn’t we have the masks and ventilators we needed? Why didn’t we have a plan to protect seniors specifically?
There is copious evidence of breathtaking ignorance in how the US economy works to keep people alive and thriving. Anyone with a modicum of sense for these things would never support the actions being taken.
At a recent town-square conference meeting with congressman Garamendi, he responded to a comment from a small business sole proprietor related to conflicts with unemployment benefits and the PPP program that he didn’t know and was unaware of her situation. The EIDL program ran out of money and the SBA has been cutting the maxim loan amount. This is common… we have people in government and working in government that are disconnected from the actual private economy. They don’t understand how it works. They don’t even know how many businesses are out there pumping the life-blood into the system.
Consequently there is inadequate consideration of the trade-off consequences for their orders preventing almost 50% of the economy from functioning. The lifeblood is being choked out. Many people are going to lose their jobs, their business, their life savings, their homes. And this will cascade into inadequate tax revenue. The same government idiots that pushed the extreme measures will then start crying for more tax revenue… tax increases… thus causing more pain for the fewer remaining businesses and workers.
I think we will look back on this and realize that we made terrible fear-based mistakes and exploded harm to the human population beyond comprehension.
Yes, trade-off analysis is missing, but not from me.
This is the straw man fallacy: “completely mitigate the risk of death” was never, nor is it now the goal of these directives.