Pandemic Cash Made a Difference

Millions needed help and got it. From The New York Times:

In offering most Americans two more rounds of stimulus [or relief] checks in the past six months, totaling $2,000 a person, the federal government effectively conducted a huge experiment in safety net policy. Supporters said a quick, broad outpouring of cash would ease the economic hardships caused by the coronavirus pandemic. Skeptics called the policy wasteful and expensive.

The aid followed an earlier round of stimulus checks, sent a year ago, and the results are being scrutinized for lessons on how to help the needy in less extraordinary times.

A new analysis of Census Bureau surveys argues that the two latest rounds of aid significantly improved Americans’ ability to buy food and pay household bills and reduced anxiety and depression, with the largest benefits going to the poorest households and those with children. The analysis offers the fullest look at hardship reduction under the stimulus aid.

Among households with children, reports of food shortages fell 42 percent from January through April. A broader gauge of financial instability fell 43 percent. Among all households, frequent anxiety and depression fell by more than 20 percent.

While the economic rebound and other forms of aid no doubt also helped, the largest declines in measures of hardship coincided with the $600 checks that reached most people in January and the $1,400 checks mostly distributed in April.

“We see an immediate decline among multiple lines of hardship concentrated among the most disadvantaged families,” said H. Luke Shaefer, a professor at the University of Michigan who co-authored the study . . .

Given the scale of the stimulus aid — a total of $585 billion — a reduction in hardship may seem like a given, and there is no clear way to measure whether the benefits were worth the costs. . . . Still, the aggressive use of stimulus checks coincides with growing interest in broad cash payments as a tool in social policy, and the evidence that they can have an immediate effect on the economic strains afflicting many households could influence that debate.

Starting in July, the government will mail up to $300 a month per child to all but the most affluent families in a yearlong expansion of the child tax credit that Democrats want to make permanent. . . .

“Cash aid offers families great flexibility to address their most pressing problems, and getting it out quickly is something the government knows how to do,” Mr. Shaefer said. Extrapolating from the survey data, he concluded that 5.2 million children had escaped food insufficiency since the start of the year, a figure he called dramatic.

The experience of [Chenetta Ray], a warehouse worker at a recycling company in Houston, captures the hardships that the pandemic imposed and the varied ways that struggling families have used stimulus checks to address them. Earning $13 an hour, Ms. Ray had an unforgiving budget even before business closures reduced trash collection and cut her hours by a third.

Her car insurance lapsed. Her lights were shut off. She skipped meals, even with food pantry aid, and re-wore dirty work clothes to save on laundromat costs. When her daughter discovered that they owed thousands in rent, she offered to quit high school and work, which Ms. Ray forbid. A stimulus payment in January — $1,200 for the two of them — let her pay small parts of multiple bills and restock the freezer.

“It bridged a gap,” Ms. Ray said, while she waited for slower forms of assistance, like rental aid.

Then she got cancer. To confirm the diagnosis and guide her treatment, she had to contribute $600 to the cost of a CT scan, which she did with the help of a payment in April totaling $2,800.

In addition to providing for the test, Ms. Ray said, the checks brought hope. “I really got down and depressed,” she said. “Part of the benefit of the stimulus to me was God saying, ‘I got you.’ Spiritual and emotional reassurance. It took a lot of stress off me.”

More Good News, Bad News

There’s good news about the economy, which means good news about people’s lives. From Paul Krugman:

At the beginning of this year, the United States was still very much in the depths of the pandemic. Daily deaths were higher than ever, with Covid-19 taking more than 3,500 lives in the country every day. Parts of the economy that depend on close physical contact were largely frozen. . . .

Then came an extraordinarily successful vaccination campaign. Deaths have plunged more than 85 percent and are still dropping. As fear recedes, the economy is surging, in what may end up being the fastest recovery ever. . . . 

Why would anyone imagine us able to achieve that kind of sudden acceleration without leaving a few skid marks, and maybe even burning some rubber?

So yes, sawmill operators, who expected a longer slump, got caught short, leading to sky-high lumber prices. Rental car companies, which sold off a large part of their fleets last year, are now scrambling to buy vehicles again, helping to send used-car prices soaring. And so on.

What about those reports of labor shortages? Some of this is what always happens after a period of high unemployment: Businesses grow accustomed to having job applicants lined up at their doors, and get cranky when the buyers’ market ends. . . .

Mainly, however, we’re just seeing the problems you’d expect when the economy tries to roar ahead from a standing start, which means that we’re calling on suppliers to ramp up production incredibly fast and expecting employers to quickly attract a large number of new workers. These problems are real, but they’ll mostly resolve themselves in a few months.

So what do these probably temporary problems say about the longer term, and in particular about President Biden’s economic plans? That’s easy: nothing. Politicians gonna politician, and Biden’s opponents are seizing on every negative bit of news as proof that his entire agenda is doomed. But none of it should be taken seriously. . . . None of this tells you anything at all about how much we should worry about overheating, let alone how much more we should be spending on infrastructure and family support (answer: a lot) or how we should pay for these initiatives (answer: tax corporations and the rich).

. . . There is some bad news out there, but most of it is a temporary byproduct of extraordinary good news: The virus is losing, and the economy is winning.

Or more succinctly, from the White House:

Untitled

On the other hand — and it’s a giant hand with about twelve dangerous fingers — one side is trying to rig the game even more than it already is. This is part of an interview from Vox:

Sean Illing

You were urging Democrats in 2018 to pass the sorts of reforms that are still on the table today, like packing the courts or granting statehood to DC and Puerto Rico. Are we beyond that now?

David Faris (political scientist and author of It’s Time to Fight Dirty)

What needs to be done has gotten more complex. The structural problems are even worse than I anticipated. I also didn’t fully anticipate the unapologetically authoritarian turn in Republican politics. But the fixes are still there. You have to abolish the filibuster in the Senate, you have to mandate national nonpartisan redistricting, you have to make voting easier, and you have to outlaw some of these Republican voter suppression tactics.

Sean Illing

I’ve had conversations with some Democrats and when these ideas about nuking the filibuster or court-packing or granting statehood to DC and Puerto Rico come up, the argument is often that it’s a nonstarter because [senators] Joe Manchin or Kyrsten Sinema simply won’t do it. What’s wrong with that thinking?

David Faris

Certainly the laws that you can pass are contingent on getting the most moderate member of your caucus on board. . . .

Where Manchin seems to be very far away from what House Democrats want to do is on the democracy reform stuff. It’s maddening because nothing that Manchin wants to do policy-wise can get done without abolishing the filibuster. Democrats are not going to have a majority after next year if they don’t do some of these things now. So it’s a mistake to assume Manchin can’t be moved. That’s the job of leadership. That’s Joe Biden’s job. That’s Chuck Schumer’s job.

Sean Illing

Let’s just say that Manchin and Kyrsten Sinema, for whatever reason, refuse to respond to the realities of the moment — then what?

David Faris

It’s bleak. I don’t know what else to say.

Democrats have to get extremely lucky next year. They either need to luck into the most favorable environment for the president’s party that we haven’t ever had for a midterm election or … I don’t know. There’s not much else they can do. None of these democracy reforms can get through on a reconciliation bill. If Democrats don’t pass nonpartisan redistricting, they’re going to be fighting at a huge disadvantage in the House. That’s the ballgame.

Progressive activists are going to pour a billion dollars into the Florida Senate race and then [Marco] Rubio is going to win by 10 points. So if they don’t act, it’s very simple. The Democrats will have to fight on this extremely unfair playing field against a newly radicalized Republican Party that is going to pull out all the stops in terms of voter suppression to win these elections, on top of the situation where they’re making other changes to state laws that could allow them to mess around with results in other ways, like what we’re seeing in Georgia now.

There’s a very circular structure to this kind of proto-authoritarianism. You have anti-democratic practices at the state level that produce minority Republican governments that pass anti-democratic laws that end up in front of courts that are appointed by a minoritarian president and approved by a minoritarian Senate that will then rule to uphold these anti-democratic practices at the state level.

And so there is no path to beating some of these laws through the courts. The Supreme Court has already said it’s not going to touch gerrymandering. And so there’s nothing left except Congress using its constitutional authority under the elections clause to do some regulation to the elections. I just don’t see another way.

Sean Illing

It feels like we’re sleepwalking into a real crisis here, but it’s hard to convey the urgency because it’s not dramatic and it’s happening in slow motion and so much of life feels so normal. And yet our democratic system is losing any semblance of legitimacy and down that road is a range of possibilities no one wants to seriously consider. …

David Faris

When people think of democracy dying, they think of some very dramatic event like Trump riding down Pennsylvania Avenue in a tank or something. That’s not the reality here.

Take the scenario where Republicans don’t have to steal the 2024 election. They just use their built-in advantages in which Biden wins the popular vote by three points but still loses the Electoral College. Democrats win the House vote but lose the House. Democrats win the Senate vote, but they lose the Senate.

That’s a situation where the citizens of the country fundamentally don’t have control of the agenda and they don’t have the ability to change the leadership. Those are two core features of democracy, and without them, you’re living in competitive authoritarianism. People are going to wake up the next day and go to work, and take care of their kids, and live their lives, and democracy will be gone. . . .

Two Issues of the Day

Things are looking up. The U.S. is among the world leaders in the rate of vaccination. Democrats in Washington passed a big Covid relief bill that won’t just address the effects of the virus, it will also reduce poverty and improve access to healthcare for millions of people. The Senate’s current no-effort filibuster may be on its way out. And, following our coldest February in more than thirty years, spring is just around the corner.

Maybe this is why I haven’t posted anything in four days. There isn’t enough to complain about (complaining almost always feels more urgent than celebrating).

Still, two developments seem worth mentioning. One is that some in the reality-based news media have suggested that President Biden should give more credit to his predecessor for our progress on vaccinations. This is baloney. Biden gave credit to the other guy months ago, back when the first vaccinations were given. As part of the first Covid relief bill and the subsequent “Operation Warp Speed”, Congress and the previous administration gave billions of dollars to pharmaceutical companies in order to speed up the creation and manufacture of vaccines (although not to Pfizer, the company that produced the first one — the only cash they and their corporate partner got was from the German government).

So the former president gets credit for not standing in the way of a massive burst of government spending, even though he downplayed the seriousness of the virus for months — even after acknowledging in private how serious it was — and even though most of the credit goes to the scientists and others who quickly developed and tested the vaccines. 

As for the distribution of the vaccines, the 45th president doesn’t deserve any credit at all. That aspect of Operation Warp Speed was a bust. This is from Vox:

Vaccines don’t do much good if there’s no plan to get them into arms, and this is where [the previous president] really fell short. As was the case when the U.S. struggled to ramp up coronavirus testing infrastructure in the early days of the pandemic, the [prior] administration’s plan for vaccine distribution did little more than pass the buck to under-resourced states. . . . 

It’s true that [by mid-January], about 1 million vaccines were being administered each day. But Biden has nearly tripled that rate in less than two months. . . [He] has overseen the federal government purchasing hundreds of millions of vaccine doses, making possible the aggressive timeline he outlined on Thursday. And his administration has overseen the development and implementation of vaccine distribution plans that do more than just rely on the states.

Josh Marshall of Talking Points Memo puts it succinctly (the whole article is worth reading):

On the distribution front, their record was close to catastrophic. As  [explained] here, they literally had no plan to do anything. The “plan” was not to have a plan. . . . 

The federal government would manage the relatively easy task of airlifting supplies in bulk to states at designated airports and then let the states figure out how to get them into people’s arms.

[Giving the shots] was an incredibly hard task and the best solution was to put it off on someone else, so the White House didn’t get the blame. It’s really that simple. 

The other thing I thought worth mentioning is what’s going on at our border with Mexico. The New Yorker has a fairly long article about the situation called “Biden Has Few Good Options for the Unaccompanied Children at the Border”. Greg Sargent of The Washington Post has a shorter summary:

When the administration reopened a warehouse-like facility for migrant children in Texas this week, it caused a huge controversy on all sides. . . . [Right-wingers] scoffed that Biden is being forced to resume [the unindicted co-conspirator’s] policies . . . All this is nonsense. . .

The reopening of the Texas facility does not constitute holding children at the border. It is using a warehouse-like facility to deal with overflow at the Office of Refugee Resettlement, the waystation before kids hopefully get moved to a better life.

This isn’t “kids in cages” redux. That scandal arose when [the government] separated families to hold parents (rather than releasing them), creating a new class of unaccompanied children that didn’t exist before.

In this case, the overflow at ORR is being caused in part by the rise in migrant children arriving at the border alone, not after being separated from parents, [and] some of the increase is due to Biden allowing migrants to have due process after being trapped in Mexico due to [the last administration’s] policies. . . .  For now, there is no alternative to holding migrant children, because releasing them would put them in more danger. The question then becomes how to do this. . . .

“We can’t just release them,” says Wendy Young, the president of Kids in Need of Defense, . . . because they’re “incredibly vulnerable” in a “strange country.” Instead, Young said, “you have to provide them with appropriate care.” Indeed, Young noted, holding and processing children is necessary for their own long-term good, because it enables us to determine whether they’re eligible for asylum or other protections, and to place them on the correct legal path to get there.

Migration was suppressed last year during the pandemic, and arrivals are now rising due to many factors in Central America, Young said. “There continues to be a tremendous amount of violence, corruption and deprivation. Children leave because they’re forced out of their home countries.”

Thus, much of the spike is caused by “push” factors, just as previous spikes were. Biden is trying to address those factors with new policies sending aid to the region.

. . . This part of the debate has gotten badly confused. The problem is not the existence of the facility. . . The real issue is the conditions under which children are held, and for how long. And this points to the way we can genuinely hold the Biden administration accountable.

In the short term, we need to scrutinize whether the administration makes good on its promise to make the conditions under which ORR holds children, including at such warehouse facilities, genuinely more humane. Also crucial is whether the administration undertakes reforms to speed up the process of moving kids from ORR to guardians. [According to the New Yorker article, Biden is trying to expedite the process by having the government help pay the travel expenses involved in placing children. Previously, families were responsible for those costs themselves.]

. . . Comparing all this to “kids in cages” confuses the debate in a way that obscures what the Biden administration is genuinely trying to accomplish — and thus makes it harder to actually hold the administration accountable on it.

My considered opinion, given the evidence, is that the Biden administration is trying to repair the damage from the past four years in a number of ways. Dealing with the pandemic and the border are just two of them.

Statistics for a Sunday Afternoon

Over the past 20 years, the US economy has grown at an annual rate of 1.9%. Goldman Sachs predicts a rate of 7% for 2021 (Washington Post).

The provision in President Biden’s Covid relief bill to send almost all families monthly checks of up to $300 per child would move close to 10 million children above the poverty line, cutting child poverty nearly in half (Los Angeles Times).

Asked to describe what happened during the assault on the Capitol, 58% of [the unindicted co-conspirator’s] voters call it “mostly an Antifa-inspired attack that only involved a few of [his] supporters” (USA Today).

We’ve had almost 500,000 confirmed Covid deaths in the US. To include that many names, the Vietnam Veterans Memorial would have to be 87 feet tall (Washington Post).

hith-vietnam-vets-memorial-2 (1)

The number of atoms in your body is roughly 1028 — that’s a 1 followed by 28 zeros (New York Times). There are around 1,000 different species of bacteria living on your skin (Nature).

The Pandemic’s Economic Pain Hasn’t Been Shared

From The Associated Press:

In a stark sign of the economic inequality that has marked the pandemic recession and recovery, Americans as a whole are now earning the same amount in wages and salaries that they did before the virus struck — even with nearly 9 million fewer people working.

The turnaround in total wages underscores how disproportionately America’s job losses have afflicted workers in lower-income occupations rather than in higher-paying industries, where employees have actually gained jobs as well as income since early last year.

In February 2020, Americans earned $9.66 trillion in wages and salaries, at a seasonally adjusted annual rate, according to the Commerce Department data. By April, after the virus had flattened the U.S. economy, that figure had shrunk by 10%. It then gradually recovered before reaching $9.67 trillion in December, the latest period for which data is available.

Those dollar figures include only wages and salaries that people earned from jobs. They don’t include money that tens of millions of Americans have received from unemployment benefits or the Social Security and other aid that goes to many other households. The figures also don’t include investment income.

A separate measure tracked by the Labor Department shows the same result: Total labor income, excluding government workers, was 0.6% higher in January than it was a year earlier.

That is “pretty remarkable,” given the sharp drop in employment, said Michael Feroli, an economist at JPMorgan Chase.

The figures document that the vanished earnings from 8.9 million Americans who have lost jobs to the pandemic remain less than the combined salaries of new hires and the pay raises that the 150 million Americans who have kept their jobs have received.

The job cuts resulting from the pandemic recession have fallen heavily on lower-income workers across the service sector — from restaurants and hotels to retail stores and entertainment venues. By contrast, tens of millions of higher-income Americans, especially those able to work from home, have managed to keep or acquire jobs and continue to receive pay increases.

“We’ve never seen anything like that before,” said Richard Deitz, a senior economist at the Federal Reserve Bank of New York, referring to the concentration of job losses. “It’s a totally different kind of downturn than we’ve experienced in modern times.”

Of the nearly 10 million jobs that have been eliminated by the pandemic, 40% have been in restaurants, bars, hotels, arts, and entertainment. Retailers have lost nearly 400,000 jobs and many low-paying health care workers, such as nursing home attendants and home health care aides, have also been laid off.

On average, restaurant workers make just below $13 an hour, according to Labor Department data. Retail cashier pay is about the same. That’s less than half the economy-wide average of nearly $30 an hour.

“It tells the story of an economy that has really tanked for the most vulnerable,” said Elise Gould, an economist at the liberal Economic Policy Institute. “It’s shocking how small a dent that has made in the aggregate.”

The figures also underscore the unusually accelerated nature of this recession. . . . “This is one of the worst recessions we’ve ever had — compressed into one-tenth of the time that a normal recession would take,” said Ernie Tedeschi, policy economist at the investment bank Evercore ISI. . . .

The recovery in wages and salaries helps explain why some states haven’t suffered as sharp a drop in tax revenue as many had feared. That is especially true for states that rely on progressive taxes that fall more heavily on the rich. California, for example, said last month that it has a $15 billion budget surplus. Yet many cities are still struggling, and local transit agencies, such as New York City’s subway, have been hammered by the pandemic.

The wage and salary data also helps explain the steady gains in the stock market, which have been led by high-tech companies whose products are being heavily purchased and used by higher-income Americans . . .

This week, the New York Fed released research that underscored how focused the job losses have been. For people making less than $30,000 a year, employment has fallen 14% as of December. For those earning more than $85,000, it has actually risen slightly. For those in-between, employment has fallen 4%. . . .

Some companies have cut wages in this recession, but on the whole the many millions of Americans fortunate enough to keep their jobs have generally received pay raises at largely pre-recession rates. . . .

Unquote.

Another group that must have done relatively well is people who are retired. Social Security payments and pensions have stayed where they were and investment returns have generally been very good.