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. . . .


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.

In a Crisis, Bigger Is Better

Paul Krugman explains why Biden’s Covid relief package has to be big (I’ve left out some of the economics discussion, but left in the history):

. . . No, the Biden plan isn’t too big. While [some] pundits’ concern that the size of the package might produce some economic stresses isn’t silly, it’s probably overwrought. And they have the implications of an expansive plan for the future completely backward: Going big now will enhance, not reduce, our ability to do more later.

. . . What policymakers are trying to do here is like fighting a war — a war both against the pandemic itself and against the human fallout from the pandemic slump.

And when you’re fighting a war, you don’t decide how much to spend by asking “How much stimulus do we need to achieve full employment?” You spend what you need to spend to win the war.

Winning, in this case, means providing the resources for a huge vaccination program and for reopening schools safely, while limiting the economic misery of families whose breadwinners can’t work and avoiding gratuitous cuts in public services provided by fiscally constrained state and local governments.

And that’s what the American Rescue Plan mostly involves; it is, as Biden’s economists say, a bottom-up plan that starts with estimated needs. Using numbers from the Committee for a Responsible Federal Budget, here’s the composition of the proposed package:070221krugman1-jumboAlthough discussion is weirdly dominated by those proposed $1400 checks, they’re only a fraction of the total; medical spending, school aid, aid to the unemployed, and help for state and local governments dominate the plan. And there’s a good case for those checks, too; more about that later.

. . . But what about the argument that there are big elements of the Biden plan that aren’t essential relief?

Skepticism about the substance of the Biden plan, as opposed to its size per se, mainly centers on the idea of sending cash to the great majority of American adults — the so-called stimulus checks, although they aren’t stimulus and they aren’t checks. There are other elements; . . . some believe that aid to state and local governments will be bigger than necessary. But the stimulus checks are the big question mark. So let’s focus on them, and with them the broader question of how to set the stage for future policy.

There’s no question that many people receiving stimulus checks will be people who haven’t taken a serious hit to their income and don’t need special help. In that sense the checks will be poorly targeted, certainly as compared to enhanced unemployment benefits.

However, we know that a substantial number of people experiencing significant income losses won’t be helped by unemployment benefits — for example, those who are still working but at reduced hours or wages. Universal basic payments will give such people much-needed help. True, they’re a leaky bucket, and you wouldn’t want them to be the main element of a rescue plan — but they aren’t! They’re a supplement that will do some good.

And they’re also hugely popular, which isn’t an irrelevant consideration.

Actually, every major element in the Biden plan has strong public approval. But support for stimulus checks is through the roof.

[Note: According to a poll taken this month, 68% of voters want Biden and the Democratic Congress to pass a relief package that will do the most to stop the spread of coronavirus and help people economically. Only 32% favor a smaller package that will do less but have bipartisan Republican support.]

Now, policy shouldn’t be driven entirely by opinion polls. But if you care about setting the stage for policy beyond the pandemic, delivering the goods to voters in the first round will be crucial.

Of all the arguments made by critics of a big rescue plan, the one that really has me rubbing my eyes is the suggestion that we should scale the plan back to make room for later policies, like investment in infrastructure. Wasn’t the overwhelming lesson from the Obama years that that’s not how it works? The effective constraint on good policy isn’t financial, it’s political — and as a result underpowered policy in the short run ends up killing the chance of good policy in the years ahead.

A trip down memory lane: Back in 2009 I was more or less frantically warning that the Obama stimulus was too small, and a key part of that warning was my fear that going small would undermine future policy prospects. Here’s what I wrote in January 2009:

“I see the following scenario: a weak stimulus plan, perhaps even weaker than what we’re talking about now, is crafted to win those extra GOP votes. The plan limits the rise in unemployment, but things are still pretty bad, with the rate peaking at something like 9 percent and coming down only slowly. And then Mitch McConnell says “See, government spending doesn’t work.”

“Let’s hope I’ve got this wrong.”

Alas, I didn’t have it wrong.

Circumstances are different now, but the basic logic is the same. If you want effective policy on infrastructure, on the environment, on children and more, Biden has to deliver big, tangible benefits with his rescue plan. Otherwise he’ll squander political capital, and probably lose any chance to do significantly more.

So this plan really needs to go big. The risks, economic and political, of falling short are huge, and should [end the discussion].

So Where’s the Vaccine?

Perhaps you’ve been wondering where the vaccine is and how much is on the way. We’d know more if the previous administration hadn’t displayed an extraordinary combination of malevolence and incompetence. The good news is that we’ll know more soon. From The Guardian

The Biden administration has spent its first week in office attempting to manually track down 20m vaccine doses in the pipeline between federal distribution and administration at clinic sites, when a dose finally reaches a patient’s arm.

The Trump administration’s strategy pushed the response to the coronavirus pandemic to individual states and omitted pipeline tracking information between distribution and when the shot is actually administered, Biden administration officials told Politico.

The lack of data has now forced federal health department officials to spend hours on the phone tracking down vaccine shipments, the news website reported.

Nobody had a complete picture,” Dr Julie Morita, a member of the Biden transition team and executive vice-president of the Robert Wood Johnson Foundation, told Politico. “The plans that were being made were being made with the assumption that more information would be available and be revealed once they got into the White House.”

As of Saturday, 49 million doses of vaccine have been distributed by the federal government, but only 27 million administered by states, according to the US Centers for Disease Control and Prevention (CDC).

About two million of those doses are believed to be accounted for by a 72-hour lag in reported administration, Politico reported. That still leaves millions in the pipeline between delivery and patient. At least 16 states have used less than half the vaccine doses distributed to them, USA Today reported this week.

Much of our work over the next week is going to make sure that we can tighten up the timelines to understand where in the pipeline the vaccine actually is and when exactly it is administered,” Dr Rochelle Walensky, [the new] director of the CDC, told USA Today.

. . . The CDC’s first report on early vaccine rollout is expected in February.