Glad I Didn’t Say That! A Weird NY Times Definition of “Polarizing”

Tags

CCP Virus, coronavirus, COVID 19, experts, Florida, lockdowns, Mainstream Media, MSM, politics, polls, public health, reopening, Ron DeSantis, The New York Times, Wuhan virus

Florida Republican Governor Ron DeSantis “has become a

polarizing leader in the resistance to lengthy pandemic lockdowns,

ignoring the advice of some public health experts in ways that have

left his state’s residents bitterly divided over the costs and benefits of

his actions.”

– The New York Times, April 10, 2021

Latest two DeSantis Florida approval ratings: 53 % & 60 %

– Sarasota (Fla.) Herald-Tribune, March 2, 2021 and The Florida Times-Union, March 4, 2021

 

(Sources: “Could Ron DeSantis Be Trump’s G.O.P. Heir?  He’s Certainly Trying,” by Patricia Mazzei, The New York Times, April 10, 2021, Could Ron DeSantis Be Trump’s G.O.P. Heir? He’s Certainly Trying. – The New York Times (nytimes.com); “New poll shows 53% of Florida voters approve of DeSantis, a big increase from July,” by Zac Anderson, Sarasota Herald-Tribune, March 2, 2021, https://www.heraldtribune.com/story/news/politics/state/2021/03/02/florida-governor-ron-desantis-approval-rating-sees-big-increase-covid-pandemic-anniversary/6877677002/; and “UNF poll: Gov. DeSantis approval at 60 percent,” The Florida Times-Union, March 4, 2021, UNF poll: Gov. DeSantis approval at 60 percent – News – The Florida Times-Union – Jacksonville, FL )

Im-Politic: Texas-Sized Goofs from the Experts on the Lockdowns

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Anthony S. Fauci, Biden, CCP Virus, coronavirus, COVID 19, facemasks, Im-Politic, lockdowns, mask mandate, masks, Mississippi, reopening, social distancing, Texas, Washington Post, Wuhan virus

This is getting embarrassingly easy. The so-called experts along with control freak politicians keep making apocalyptic predictions about decisions at any level of government in the United States to relax CCP Virus-related curbs on personal behavior and business activity. And they keep getting it laughably wrong. The latest example: Texas’ decisions last month to reopen its economy fully and lift its state-wide mask mandate, both effective March 10, and similar announcements by Mississippi effective March 3.

The blowback was swift and harsh. Dr. Anthony S. Fauci, longtime director of the federal government’s National Institute for Allergy and Infectious Diseases and President Biden’s chief medical adviser, on March 3 attacked the moves as “quite risky.” And citing a recent plateauing of new infections in both states, added “That’s a dangerous sign because when that has happened in the past, when you pull back on measures of public health, invariably you’ve seen a surge back up.”

Mr. Biden was much blunter, contending on the same day that both states were making “a big mistake” that stemmed from “Neanderthal thinking.”

Well now it’s a little more than a month later and it sure looks like the know-nothings are in Washington, D.C. As of yesterday, according to the Washington Post‘s virus tracker, the seven-day average of daily new reported cases in Texas is down by 40.60 percent since March 10, and in Mississippi it’s plunged by 61.37 percent since March 3.

Even more revealing, while reported infections in these troglodyte states were sinking, guess what happened to reported cases nationally? Between March 3 and yesterday, the seven-day new infections average rose by two percent. And needless to say, this nation-wide figure includes many states that have retained mask mandates and other extensive behavior and economic curbs.

By the way, I’m fully aware that case numbers are a deeply flawed measure of pandemic spread and progress against it, due to flaws in states’ reporting systems, varying definitions of “case,” the undoubtedly large numbers of asymptomatic infections throughout the country, and now, surging numbers of vaccinations. I’m also aware that we’re now dealing with different strains of the virus with differing degrees of virulence.

But reported new infections are one of measures emphasized by Fauci in particular. And it seems safe to assume that he and the President know about the different strains. So live analytically by the chosen statistic, and die by it.

I’m also aware that neither Texas nor Mississippi was turning its back totally on the mitigation measures stressed by the Feds. For example, the former exempted areas “with high hospitalizations,” and those counties are entirely free to retain or impose significant restrictions. And businesses all over the state can still require mask-wearing and other hygiene measures.

Mississippi also still mandates mask-wearing where its not possible to follow its remaining social distancing rules (which are still noteworthy, especially in schools and for their extracurricular activities – including sporting events – at all levels, from kindergarten through university). Further, counties and municipalities are fully free to adopt stricter rules if they wish except for businesses providing essential services.

But Fauci and the President surely read the actual Texas and Mississippi executive orders – didn’t they?

It’s entirely possible that in the coming days and weeks, states that start or keep easing anti-virus mandates of all kinds will see rising case numbers. In fact, that appears to be the situation in Michigan now – even though its rules are still pretty restrictive. But actually, that’s the point. If comparable masks and lockdowns etc policies and comparable policy changes are producing dramatically different results, then clearly something, or some things, other than these restrictions and their status are mainly responsible. And recognizing this logic is crucial given that the economic curbs haven’t exactly been cost-free either in terms of the economy or public health.

For the time being, though, there’s one dimension of the CCP Virus story that seems firmly established. For the experts and the political leaders who profess to be simply “following the science” on pandemic forecasts, being whoppingly off-base means never having to say you’re sorry.

(What’s Left of) Our Economy: A Record U.S. Trade Gap – & Cause for Trade Optimism??

Tags

American Jobs Plan, Biden, Buy American, CCP Virus, Census Bureau, China, coronavirus, corporate taxes, COVID 19, Donald Trump, exports, goods trade deficit, green energy, imports, lockdowns, Made in Washington trade flows, Pacific Rim, reopening, semiconductor shortage, services trade, subsidies, supply chains, tariffs, tax policy, taxes, Trade, trade deficit, vaccines, West Coast ports, Wuhan virus, {What's Left of) Our Economy

Despite the overall U.S. trade deficit hitting an all-time monthly high in February, the new trade figures released by the Census Bureau this morning contained lots of encouraging news – including for fans of the Trump tariffs on China and on aluminum and steel (like me). I’m wary of running or continuing a victory lap, because there’s still too much short- and perhaps longer term economic noise surely masking the underlying trends. But the case for trade optimism and its possible policy causes deserves attention.

As for that economic noise, it comes of course not only from the ongoing stop/start CCP Virus- and lockdowns-/reopenings/vaccinations-related distortions of all economic data, but from the harsh winter weather that depressed February economic activity in key areas of the country like Texas; the global shortage of semiconductors that’s impacting output throughout the manufacturing sector (and that’s due in part to the pandemic); and the big backups at the West Coast ports that are greatly slowing the unloading of container ships containing lots of imports from China and the rest of Asia.

As for the data, the combined goods and services trade shortfall of $71.08 billion in February surpassed the previous record, November’s $69.04 billion, by 2.95 percent, and represented a 4.80 percent increase over January’s downwardly revised level of $67.82 billion.

The increase resulted both from a rise in the goods trade gap (of 3.27 percent, to its own record of $88.01 billion) and a shrinkage of the services surplus (of 2.93 percent, to $16.93 billion – the smallest since August, 2012’s $17.08 billion).

Trade flows not setting records, though, notably included any of the imports categories – despite numerous reports of the rapidly rebounding U.S. economy sucking in massive amounts of products (though not services, which have suffered an outsized CCP Virus blow) from abroad.

For example, total merchandise imports actually fell on month in February – by 0.89 percent, to $221.14 billion, from January’s record total of $221.12 billion. Still, the February figure remains in second place historically speaking.

Non-oil goods imports inched up by 0.38 percent sequentially in February – from $85.36 billion to $85.68 billion. But they still fell short of the November record of $86.40 billion. As known by RealityChek regulars, this trade category sheds the most light on the impact on trade flows of trade policy decisions, like tariff changes and trade agreements. (Hence I call the resulting shortfall the Made in Washington trade deficit.) But despite the lofty level, they’re actually down on net since November. Could it be those West Coast ports snags or the harsh winter storms of February or semiconductor-specific problems? Maybe.

The evidence for those propositions? U.S. goods imports from Pacific Rim countries – which are serviced by the West Coast ports – did sink by 11.81 percent on month in February. That’s a much faster rate than the 1.54 percent decrease in overall non-oil goods imports (a close proxy).

But goods imports from China dropped by a greater 13 percent even, which points to some Trump tariff effect as well. In fact, the $34.03 billion worth of February goods imports from China was the lowest monthly number since pandemicky last April. And February’s $24.62 billion bilateral merchandise trade deficit with China was 6.22 percent narrower than the January figure, and the smallest such total since April, too.

America’s goods deficit from Pacific Rim countries in total fell slightly faster than the gap with China (6.84 percent). China’s economy and its exports, however, are supposed to be recovering at world-and region-beating rates, so if that’s the case, it appears that the Trump trade curbs are preventing that rebound from taking place at America’s expense.

U.S. manufacturing trade numbers were encouraging, too, though again, the impact of tariffs as opposed to that of the virus distortions or the February weather or the ports issues or the semiconductor shortage or some combination thereof  is difficult to determine. But industry’s trade shortfall did tumble by 10.53 percent in February, from January’s $99.79 billion to $89.29 billion. That figure also was manufacturing’s lowest since June, 2020’s $89.16 billion and the 10.52 percent decrease was the by far the biggest in percentage terms since November, 2019’s 12.70 percent.

February manufacturing exports declined by 2.64 percent sequentially, from $81.66 billion to $79.51 billion. But the much greater volume of manufacturing imports sank by 6.98 percent, from $182.46 billion to $168.79 billion.

The China and manufacturing numbers could certainly change – and boost these U.S. trade gaps and the overall trade deficit – as Americans begin to spend their latest round of stimulus checks, as the U.S. recovery continues, and as the West Coast ports and semiconductor issues clear up. 

But especially due to those Chinese exports, this worsening of the U.S. trade picture was reported late last year. And the official U.S. trade figures show that such a surge simply never took place. Moreover, if executed properly, President Biden’s Buy American plans for federal government procurement and support for strengthening critical domestic supply chains could boost American manufacturing and other goods output without increasing imports. His budget requests for major subsidies for key U.S.-based manufacturing operations could help brighten the trade picture, too. Mr. Biden has also decided for now to retain the Trump trade curbs. And P.S. – those clogged West Coast ports hamper American exports as well.    

In addition, trade problems could reappear at some point due to the President’s proposed green energy mandates and corporate tax increases that would inevitably hike the relative cost of producing in the United States. But right now, it looks like due to ongoing and possibly upcoming economic nationalist American policies, the burden of proof is on the U.S. trade pessimists. And that’s quite a switch.

(What’s Left of) Our Economy: March U.S. Manufacturing Job Gains Lagged – For a Good Reason

Tags

aerospace, aircraft, aircraft engines, aircraft parts, American Jobs Plan, automotive, Biden, Build Back Better, CCP Virus, coronavirus, COVID 19, Donald Trump, Employment, fabricated metal products, Jobs, Labor Department, lockdowns, machinery, manufacturing, non-farm jobs, pharmaceuticals, PPE, recession, recovery, regulation, semiconductor shortage, semiconductors, tariffs, taxes, Trade, travel services, vaccines, Wuhan virus, {What's Left of) Our Economy

This morning’s figures from the Labor Department show that U.S. domestic manufacturing was a bit of a jobs creation laggard in March – and that was good news. The reason? The employment gains for the rest of the economy were so enormous.

This latest monthly U.S. jobs report showed that non-farm payrolls (the definition of the U.S. jobs universe used by the Labor Department, which tracks these data), rose by 0.64 percent in March – to 144.210 million. Job-creation in the private sector advanced at a virtually identical rate.

Payrolls in manufacturing were up by a lower 0.43 percent – to 12.284 million. But they still increased by 53,000 – their best performance since September’s 55,000. It’s also possible that hiring in the automotive sector was held down by a global shortage of semiconductors – which has led to production cutbacks and even some layoffs.

The only disappointment in the new manufacturing jobs numbers concerned revisions – which were mostly negative. February’s initially reported 21,000 net employment gain is now estimated at 18,000. January’s 14,000 job loss (already downgraded from an initially judged 10,000) is now pegged at a still greater 18,000. But December’s improvement was upwardly revised again – from 34,000 to 35,000.

As a result, manufacturing has now regained 63.83 percent (870,000) of the 1.363 million jobs the sector shed during the peak CCP Virus lockdowns period of last March and April. That’s fewer relatively speaking than the recovery in private sector employment – 66.88 percent (14.172 million) of the 21.191 million jobs it lost during that period.

But because of continuing weakness in the public sector – which has recovered just 66.42 percent of its 22.362 million job loss last spring – manufacturing’s payrolls’ rebound is still ahead of the entire economy’s. In fact, manufacturing jobs now account for a higher (8.52 percent) of total non-farm employment than during the last full pre-pandemic data month (8.39 percent in February, 2020).

The biggest manufacturing jobs winners in March? Far and away the champ was the big fabricated metals products industry, which expanded employment by 13,700 – more than a quarter of the manufacturing total. Next came two smallish sectors – miscellaneous non-durable goods and printing and related support activities (up 7,400 and 5,900, respectively). Encouragingly, jobs increased by 3,500 in the big machinery sector – whose products are used throughout not only the rest of manufacturing but the entire economy.

The worst performers were transportation equipment – whose 3,000 lost March jobs included 1,000 in the automotive sector, which has been forced into production cutbacks and some layoffs due to the global semiconductor shortage – and furniture (down 1,300).

Unfortunately, these latest figures indicate that employment in many CCP Virus-fighting goods continues to lag. To be sure, their payrolls seem to be up from the last pre-pandemic levels whereas overall manufacturing jobs are down (by 4.02 percent). But given the nature of the emergency, and the shortages it revealed, it’s surprising they’re not higher still.

The relevant numbers only go through February, and in the broad pharmaceuticals sector, employment rose by 1,600 sequentially. And January’s initially reported 700 job loss has been upgraded to a decrease of only 100. But the sector’s payrolls have grown by a mere 2.60 percent since that last pre-pandemic month of February, 2020.

The performance of the pharmaceuticals subsector containing vaccines was considerably better. February payrolls expanded by 1,300 sequentially, and January’s gains are now estimated at 500, not 100. As a result, this vaccine-related sector’s employment levels are now 6.23 percent higher than in February, 2020.

The story, however, has been more discouraging lately in the manufacturing category containing personal healthcare-related protection devices (PPE) like facemasks, gloves, and medical gowns. Payrolls were flat on month in February, and the initially reported January job loss of 800 was only upgraded to a decline of 700. Still, payrolls in this sector have climbed by 7.98 percent since February, 2020.

Interestingly, despite the rebounding orders for Boeing’s popular but previously grounded 737 Max jetliner, the recovery of national and global travel, and the resumption of deliveries of its also-troubled 787 Dreamliner, none of these positive developments has shown up in the aerospace jobs numbers.

For example, aircraft employment in February (also the latest available figures) grew by only 1,000 on month and not only remains down 10.66 percent on year, but substantially lower than all of last year’s safety crisis- and the worst of the CCP Virus-plagued months. Similar trends hold for aircraft engines and engine parts, and non-engine aircraft parts.

The outlook for domestic manufacturing job creation still seem bright, as vaccinations are being administered rapidly, reopenings are spreading, igniting renewed overall economic activity, Boeing does seem to be emerging from its safety and manufacturing-related troubles, and the high, sweeping Trump tariffs keep pricing many Chinese goods out of the U.S. market, thereby creating new opportunities for American producers.

But that global semiconductor shortage, which will eventually affect much more than automotive output, may not end until late next year. It’s tough to know the overall impact of the Biden administration’s American Jobs Plan and other Build Back Better virus recovery proposals on the one hand, and the tax increases proposed to pay for them on the other, as well as the new regulations that will be involved – assuming even that they pass Congress reasonably intact. And vaccines production won’t be booming forever.

So no one concerned about domestic manufacturing’s health and prospects has any excuse not to peruse carefully all the industry-related data and news that are in store in the weeks and months ahead.

(What’s Left of) Our Economy: More Reopening, Not Endless Money, is Now the Best Jobs Strategy

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African Americans, American Rescue Plan, Biden, CCP Virus, coronavirus, COVID 19, Covid relief, education, Employment, Federal Reserve, Hispanics, hotels, Jerome Powell, Jobs, Latinos, leisure and hospitality, lockdowns, recovery, restaurants, shutdown, stay-at-home, stimulus package, unemployment, wages, Wuhan virus, {What's Left of) Our Economy

There’s no doubt that the American jobs market has suffered an out-and-out disaster since it got hit by the CCP Virus and the follow-on lockdowns and other restrictions. There’s also no doubt that many workers and their families are still suffering greatly, and will need government aid to make it to the Other Side, and the Biden administration’s American Rescue Plan legislation that the President will likely sign into law soon will help fill this gap.

Plenty of doubt remains, however, about whether all, or close to all, of the massive funds approved in this measure are actually needed to cure the economy’s remaining employment woes, and one of the main reasons is the nature of the jobs blow that’s been delivered. Because it’s been so heavily concentrated in the country’s leisure and hospitality industries (encompassing eateries and drinking places of all kinds, plus hotels and motels, and entertainment and cultural venues), it’s entirely possible that nowadays, the most effective way to fix the jobs market fastest would be to lift the lockdowns and other mandated curbs that have fallen so hard on sectors that depend on serving in-person customers.

The case for relying on a virus-relief/stimulus package this big, at this stage of the economy’s recovery from its pandemic-induced recession, has been eloquently stated by President Biden and by Federal Reserve Chair Jerome Powell. The former warned just before the legislation passed that the U.S. economy “still has 9.5 million fewer jobs than it had this time last year. And at that rate, it would take two years to get us back on track.”

The latter has stated that he won’t be satisfied that full employment has returned until he sees what one reporter has called “broad-based gains in employment, and not just in the aggregate or at the median.” As a result, the Fed Chair is paying particular attention to (the reporter’s words again) “Black unemployment, wage growth for low-wage workers and labor force participation for those without college degrees, categories that historically have taken longer to recover from downturns than broader metrics.”

But it’s precisely these less fortunate portions of the workforce that would be helped disproportionately – and then some – by focusing on reopening steps that would surely affect the leisure and hospitality industries just as disproportionately.

If you doubt the importance of leisure and hospitality job loss over the last year in terms of overall U.S. jobs loss, here’s what you need to know. Of the 8.068 million positions shed by the country’s private sector between last Februrary (the final month of pre-CCP Virus normality for the American economy), fully 3.451 million have come in the leisure and hospitality industries. That’s nearly 43 percent.

Put differently, during that final normal economic month, leisure and hospitality workers represented just 13.04 percent of all private sector workers. Yet their employment plunge was more than three times as great relatively speaking.

Moreover, leisure and hospitality’s progress in getting back to pre-pandemic square one has been slower than that of the private sector overall. Since the April employment trough, leisure and hospitality has regained 4.955 million of the 8.224 million jobs lost during the worst of the pandemic, or 60.25 percent. For the private sector in toto, 13.267 million of the 21.353 million jobs lost in March and April have come back since – 62.13 percent.

It’s also clear that many of the kinds of workers about which Fed Chair Powell has been most concerned are concentrated in leisure and hospitality. For example, in 2019, (America’s last pre-CCP Virus full year), 13.1 percent of these sectors’ workers were African American versus 12.3 percent for the entire U.S. economy (including government workers at all levels), and 24 percent were Hispanic or Latino versus 17.6 percent for the entire economy.

Leisure and hospitality companies tend to employ Americans with low levels of formal education, too. According to the Labor Department, in 2019, 79.9 percent of the nation’s “first-line supervisors of house-keeping and janitorial workers” 25 years and older lack even an associate’s degree, and 76 percent of their food preparation and service counterparts fall into this category. The shares are even higher for the workers they supervise. Meanwhile, only 51.5 percent of all U.S. workers haven’t taken their education beyond high school.

Not surprisingly, therefore, leisure and hositality jobs pay poorly. In February, 2020, just before the arrivals of the pandemic and the lockdowns, their average hourly wages were only 59.28 percent those of all private sector workers. Last month, this figure had fallen to 57.58 percent. (See Table B-3 here.) 

For most of the pandemic period, the U.S. government at all levels pursued a mitigation strategy that aimed mainly at curbing economic and other forms of human activity across-the-board. Now, even with vaccinations and growing population-wide immunity showing strong signs of bringing the pandemic under control, the Biden administration and the Democratic Congress are just as determined to stimulate the economy that’s still significantly shut down by with an American Rescue Plan that seems just as indiscriminate.

As I’ve been writing (see, e.g., here), it should have been clear since late last spring that the anti-virus fight would have much more effective (and less harmful to the economy and other dimensions of public health) had it targeted protecting especially vulnerable populations. I strongly suspect that, with the fullness of time, it will become just as clear that a stimulus and jobs strategy emphasizing accelerating reopening, and thus aiding sectors and workers hardest hit by the remaining shutdowns, will prove a much more effective employment cure than the indiscriminate spending approach on which Washington has just doubled down.

Im-Politic: For Biden, It’s Americans Last on Migrants and the Virus

Tags

asylum seekers, Biden, CBP, CCP Virus, coronavirus, COVID 19, detention, Donald Trump, El Salvador, Guatemala, Honduras, ICE, Im-Politic, immigrants, Immigration, Immigration and Customs Enforcement, Journal of the American Medical Association, lockdowns, Mexico, migrants, Remain in Mexico, stay-at-home, testing, U.S. Customs and Border Patrol, Worldometers.info, Wuhan virus

Some of you might have heard and been concerned about reports that President Biden’s new policies will result in migrants caught by U.S. border authorities being released into the United States without being tested for the CCP Virus. If you knew how much potential for superspread these policies hold, you’d be even more concerned.

Under President Trump, the problem appeared under control because Washington ended the policy of processing migrants who crossed the southern border illegally and then releasing them into the United States to await future hearings on their requests for permanent residency. Instead, apprehended migrants claiming to be asylum seekers, were returned to Mexico (whatever their nationality) until their cases could be brought up. And last March, these policies were extended to all would-be border crossers due to pandemic concerns.

Yet due at least partly to the Biden administration’s immigration-welcoming statements and actions (including during the campaign), migrant flows northward have surged, and current U.S. detention centers have been filling to overflowing despite American court orders preventing them from holding detainees for more than 72 hours in certain facilities in Texas. Worsening the situation has been Mexico’s new refusal in some instances to accept migrants expelled from U.S. territory. (See here for details.) And the new U.S. President seems determined to facilitate immigration inflows generally.

Therefore, the U.S. Customs and Border Enforcement (CBP) agency publicly acknowledged last week that “some migrants will be processed for removal, provided a Notice to Appear, and released into the U.S. to await a future immigration hearing.” Crucially, this practice is proceeding even though CBP doesn’t test arrivals for the CCP Virus unless symptoms are visible. (See the previously linked article for the statement.) 

Which is where the public health threat comes in. Because data from the virus has seemed to be unusually prevalent among these migrants. To begin with, although figures only go through August, a paper published by the Journal of the American Medical Association (JAMA) found that the monthly rate of cases in detention centers was more than 13 times that for the U.S. population as a whole.

Although the JAMA authors wrote that increased testing at the centers only partly explains these high numbers, it also points out that they may also stem from “challenges faced implementing the Pandemic Response Requirements” – like overcrowding. At the same time, they confirm that because asymptomatic detainee testing has been “limited,” even these case numbers could be underestimates. And since migrants tend to be relatively young, asymptomatic cases are surely more common than among legal U.S. residents generally.

The total number of virus cases found among migrants in the detention centers since February has been small – just over 9,300. But the real measure of the danger comes from the incidence of the CCP Virus in the migrants’ main native countries – which look to be sources of large and ever greater greater supply going forward.

Yes, their overall case rates are much lower than their U.S. counterparts, as these data from the Worldometers.info website show:

cases per million

U.S.:                  83,687

Mexico:            14,920

Guatemala:         9,052

Honduras:         15,573

El Salvador:        8,708

One big reason, however, is that they’ve done so little testing, as these numbers from the same source make clear:

tests per million

U.S.:               984,900

Mexico:            37,781

Guatemala:      45,624

Honduras:        39,569

El Salvador:   110,338

Given the immense virus-related uncertainties revealed by these statistics, any measures that increase the numbers of untested migrants in the United States are simply incomprehensible for any government taking seriously the obligation to protect its own population. And given the tight controls already restricting individual, group, and business activities in the United States, these Biden decisions seem even less defensible.

It’s one thing for the new President to reject an America First framework for public policy. It’s quite another to adopt positions that merit the bizarre and perverse label “Americans Last.”

(What’s Left of) Our Economy: The Latest U.S. Trade Data Start Bringing Trump Achievements into Focus

Tags

aerospace, CCP Virus, China, computers, coronavirus, COVID 19, Donald Trump. Biden, exports, imports, infotech, lockdowns, Made in Washington trade deficit, manufacturing, non-oil goods trade deficit, services trade, tariffs, Trade, trade deficit, Wuhan virus, {What's Left of) Our Economy

With the release yesterday morning of the U.S. government’s trade report for December (the same morning, frustratingly for me, that the official January jobs figures came out), the final scorecard on former President Trump’s trade policy record is sort of in.

I say “sort of” because (1) these numbers will be revised several times; (2) the full impact of Trump’s tariff-centric policies on the economy won’t be apparent for many years (especially since President Biden has decided to keep in place for te time being all of the steep and sweeping Trump China levies); and (3) the powerfully distorting effects of the CCP Virus will be with us for at least many more months.

Keeping all these caveats in mind, let’s focus on the annual rather than the monthly figures, since they cover a much longer time frame, and see how even this preliminary 2020 data points to some important conclusions about what was and wasn’t accomplished under Trump.  And the accomplishments were anything but negligible.

As widely reported (see, e.g., here and here), the combined goods and services deficit hit $678.74 billion last year – the highest annual figure since 2008. So given Trump’s emphasis on narrowing the gap, and given the annual increase of 17.42 percent (far from a record) during the worst recessionary year since 1946, the result looks like a major Trump failure.

At the same time, RealityChek regulars know that economic data presented in isolation rarely prove informative. So in this vein, it’s important to note that the 2020 overall trade deficit as a share of the entire economy (gross domestic product, or GDP) was much lower than in 2008 – 3.24 percent versus 4.84 percent. P.S. 2008 was a recession year, too. And though it wasn’t nearly as deep as last year’s downturn, it still saw a slight increase in the trade shortfall. Finally, let’s remember that the previous Great Recession resulted from failures in the economy’s fundamentals that were permitted to reach crisis proportions.

This latest downturn has stemmed largely from government decisions literally to shut down much of the nation’s economic activity due to a pandemic coming from China, and created deficit-boosting problems having little to do with U.S. trade policy.

For example, $50.41 billion of the $101.56 billion annual increase in the deficit in absolute terms came from a shrinkage in the services trade surplus that was by far a record in absolute terms and the second greatest relatively speaking (17.54 percent) since recessionary 2001 (19.58 percent).

Another $36.01 billion of the increase in the overall 2020 deficit came from a drop in the civilian aviation sector surplus that had nothing to do with Trump tariffs or retaliation and everything to do with Boeing’s safety woes and the pandemic-induced nosedive in domestic and global air travel.

And another $20.92 billion of the deficit increase came from the computer and computer accessories sectors, where imports surged due to the growth of working, schooling, and otherwise Zooming from home prompted by the pandemic.

These shifts had an especially marked effect on that portion of U.S. trade flows deeply influenced by trade policy decisions like the Trump tariffs. As known by RealityChek regulars, I call the huge deficit still run in these sectors collectively the “Made in Washington” trade deficit, because it strips out two parts of the economy (services and energy) that are rarely the focus of trade agreements or related policies.

Between 2019 and 2020, this trade gap expanded by $83.03 billion, to an all-time high of $923.03 billion. But as just made clear, the non-trade policy growth in the civilian aviation and computer-related sectors made up $56.93 billion (or 68.57 percent) of the difference. And even counting these one-off developments, the Made in Washington trade deficit during the Trump years grew much more slowly as a share of GDP (by 22.16 percent) than during the second term of Barack Obama’s presidency (33.21 percent).

Similar trends can be seen in the manufacturing sector. Its deficit worsened in 2020 by $79.63 billion, to a record $1.1128 trillion. But without the bigger deficits in aviation and computers, it would have fallen year-on-year. That hasn’t happened since recession-y 2009. As a share of GDP, the manufacturing trade deficit also rose more slowly during Trump’s term (13.70 percent) than during Obama’s second term (14.14 percent).

Much of this progress, in turn, owed to the substantial reduction in the huge, chronic, U.S. manufacturing-dominated goods trade deficit with China. Even though the $83.03 billion widening of the comparable Made in Washington trade deficit gap in 2020 represented a 9.88 percent rise, the China goods deficit dropped by $34.04 billion, or 9.97 percent. And at $310.80 billion, the goods trade deficit with China was America’s smallest since 2011 ($295.25 billion). Surely Trump’s tariffs on $360 billion worth of Chinese imports (in pre-tariff times), and his Phase One trade deal, which required increased imports from the United States by Beijing, deserve considerable credit.

Further, as a share of U.S. GDP, the goods gap with China sank all the way to 1.48 percent in 2020. During Obama’s last year in office, that figure stood at 1.85 percent – a modest decrease from 1.95 percent in the last year of his first term. But even if you take away the deeply recessed U.S. economy of 2020 and look at only the first three Trump years, you see that the China goods deficit stood at only 1.61 percent of GDP – meaning it had still fallen considerably faster under his presidency.

What happens with U.S. trade flows – and all the sectors of the economy they profoundly affect – though, will remain unclear for the foreseeable future. For not only is the direction of Biden administration policy substantially up in the air. So is the future course of the pandemic, including whether vaccines can be rolled out fast enough to stem its tide, and whether they can keep up with mutations. And all of the CCP Virus-related uncertainties will of course largely determine how fast the economies of America’s trade partners recover, how much they export, and how much they import.

But even though the results of upcoming official trade reports will need to be taken with several boulders of salt, it’s nonethless clear that if the main policy-fostered Trump trends continue under the Biden administration, American workers and producers of all kinds will have reason to be grateful.

(What’s Left of) Our Economy: The Latest on the Virus, Lockdowns, and Jobs

Tags

California, CCP Virus, coronavirus, COVID 19, Jobs, Labor Department, lockdowns, New York, public health, states, stay-at-home, Wallethub.com, Wuhan virus, {What's Left of) Our Economy

With the release last week of the Labor Department’s U.S. state-level employment data for December, we have a great new handle on the relationship between the various lockdown and stay-at-home policies mandated throughout the country, and the still horrific toll on job losses during the CCP Virus era.

And as with recent statistics on state-level economic growth (and contraction) rates (see here and here), the numbers seem to point to the economic curbs themselves as the biggest influence on employment levels and changes, as opposed to other factors, like individuals’ virus-induced fear of using various types of in-person services (like travel) and the resulting knock-on effects throughout the entire economy.

One major indication of the mandates’ impact comes, as with the growth figures, from the outsized job losses experienced in New York and California, two states with some of the most severe lockdown regimes imposed over the past year.

In December, 2019, just before the virus began spreading to the United States, New York and California accounted for 18.37 percent of all the nation’s non-farm jobs (the Labor Department’s U.S. jobs universe.) But one year later, their employment losses came to 27.91 percent of the U.S. total.

Additional reasons for blaming the mandates for the employment damage come from comparing the performances the best and worst jobs performers, and the least and most restrictive states. As with the previous post on growth levels, the ranking of mandate strictness comes from the Wallethub.com website. (And sharp-eyed readers will note that the rankings have changed over the last few months, which makes perfect sense since the lockdown regimes’ extent has fluctuated, too.)

First let’s see the Wallethub ranks of the states with the best employment records between December, 2019 and December, 2020. (The lower the rank, the more “open” the state.)

Top 10 job performers (by % change)       Wallethub.com rank

1. Idaho: +0.6                                                          14

1. Utah: +0.6                                                             6

2. Mississippi: -1.4                                                  21

3. Alabama: -1.7                                                      12

3. Georgia: -1.7                                                       18

4. Nebraska: -2.3                                                     17

5. South Carolina: -2.4                                            10

6. Arizona: -2.8                                                       30

6. Arkansas: -2.8                                                       4

6. Indiana: -2.8                                                       20

7. Montana: -2.9                                                     13

7. South Dakota: -2.9                                               2

8. Missouri: -3.1                                                       7

9. Tennessee: -3.2                                                  19

10. Texas: -3.3                                                        28

Right off the bat you’ll see that because of ties, the Top 10 is really a Top 15 – which actually serves our purposes even better. And the big takeaway here is that with one exception (Arizona) and one near-exception (Texas), all of these states rank in the top half on the open/closed scale (26 and lower for the 50 states plus the District of Columbia).

And of these 15 states, four were among the ten most open, and twelve were among the twenty most open.

Does the reverse proposition hold? Have the most closed states generally compiled the worst employment records? Here’s what the numbers say:

Bottom 10 job performers (by % change)     Wallethub.com rank

1. Hawaii: -13.8                                                          43

2. Michigan: -10.9                                                      29

3. New York: -10.4                                                     39

4. Massachusetts: -9.1                                                49

5. Vermont: 9.0                                                           45

6. New Hampshire: -8.8                                             23

7. Rhode Island: -8.7                                                  36

8. Minnesota: -8.3                                                      32

9. California: -8.0                                                       51

9. New Jersey: -8.0                                                     34

10. Delaware: -7.8                                                      33

10. Pennsylvania: -7.8                                                35

10. Oregon: -7.8                                                         37

Because of the “tie effect,” this Bottom 10 set is really a Bottom 13. Four of them fall in the category of ten most restrictive states (ranked between 51 and 41 on the Wallethub scale), and seven more are among the next ten most restrictive states. Moreover, only one state (New Hampshire) has been in the top half of most open states. So the relationship between lockdowns and employment performance looks strong from this perspective as well.

The issue can be examined the other way around, too – by examining the employment performance of the most open and least open states. Here are the results for the ten most open states. (As with the list of ten most closed states below, the Top Ten here really is a Top Ten.) They’re presented in descending order of openness.) 

Ten least restrictive on lockdowns         Job creation rank (out of 37)

Oklahoma:                                                                15

South Dakota:                                                            6

Iowa:                                                                         11

Arkansas:                                                                   5                  

Florida:                                                                    14

Utah:                                                                          1

Missouri:                                                                   7

Wisconsin:                                                               25

Alaska:                                                                    24

South Carolina:                                                         4

Revealingly, fully half of these states were among the ten states with the best employment records, three more were in the next ten. Consequently, eight of the ten ranked in the top half on the openness scale. (Because of the “tie effect,” the top half here starts at number 19 – of 37 differing state rankings).

And although Oklahoma looks like something of an exception here (the most consistently open state being only the 15^th best jobs performer), there’s a pretty simple explanation: Oklahoma’s economy is energy-heavy, and that sector has been absolutely slammed the deep recession experienced during the CCP Virus period.

Florida, which relies so heavily on tourism, has an “excuse” as well. (By the same token, though, it’s no coincidence that the worst employment performer, Hawaii, is tourism-dependent as well, along with fellow job laggards California and, to a lesser extent, New York.)

Finally, the table below shows how the most closed states fared in terms of job loss.  These are presented in descending order of “closed-ness.”

Ten most restrictive on lockdowns          Job creation rank (out of 37)

California:                                                                  31

Virginia:                                                                     12

Masschusetts:                                                             34

District of Columbia:                                                 21

New Mexico:                                                             26

Washington:                                                               18

Vermont:                                                                    33

North Carolina:                                                          10

Hawaii:                                                                      37

Illinois:                                                                      24

Fully four of these ten have been among the five worst employment states during the virus period (including tourism-reliant Hawaii and California). Three more (Illinois, New Mexico, and the District of Columbia) joined them in the bottom half. Of the two exceptions, Virginia’s solid employment record surely stems from its status not only as a state with a strongly growing information technology sector and an army of federal workers (many of whose jobs in turn owe to federal contracting).

One last point should be remembered as well: As extensively documented, the lockdowns and stay-at-home orders have generated their own serious healthcare damage . So the states with the relatively limited mandates surely have curbed both these CCP Virus costs as well as economic damage. Meaning that the already compelling case for anti-virus measures targeting the most vulnerable rather than indiscriminately putting the clamps on businesses and other forms of activity has just grown that much stronger.

Im-Politic: Did “The Science” Give Us the Virus?

Tags

Anthony S. Fauci, bio-weapons, CCP Virus, China, coronavirus, COVID 19, Im-Politics, Joe Biden, lockdowns, National Institutes of Health, New York, Nicholson Baker, pandemics, public health, SARS, stay-at-home, terrorism, Trump, virology, Wuhan virus

That’s a pretty stunning header, I know. But it’s anything but crazy, or even click-baity – at least if you take seriously a long, very serious, and very carefully reported article published January 4 about the CCP Virus’ origins in New York magazine, which hasn’t exactly been an enthusiast for President Trump or science- or China-bashing.

For author Nicholson Baker makes clear not only that for years before the Trump era, America’s top public health officials (who epitomize “The Science” that all the adults in the nation’s room from President-elect Joe Biden on down have anointed as the only valid sources of U.S. and global virus policy advice) pushed measures certain to boost the odds that something like Covid 19 would be created, and somehow escape from, a laboratory someplace in the world – including China.

And notably, one of the main pushers was one Dr. Anthony S. Fauci, Director of the National Institutes of Health’s (NIH) National Institute of Allergy and Infectious Diseases.

It’s important to make clear here what Baker isn’t saying. He isn’t saying that the Chinese manufactured the virus as a bio-weapon. He isn’t saying that Beijing loosed this pandemic on the world on purpose. And he certainly isn’t accusing Fauci and the rest of the public health establishment of acting maliciously.

But what he is saying is awfully damning, and urgently needs to be examined by the incoming Biden administration, the entire U.S. political and policy communities, and of course the public.  For Baker marshalls and summarizes voluminous evidence for the proposition that the most reasonable theory of the virus’ origin is not that in its highly infectious form it developed naturally in some mammal species (like a bat) and then jumped to humans (e.g., at a wet market) – the explanation offered at various times by the Chinese government and by many infectious disease specialists. Instead, the author supports the idea that it was produced by scientists from a naturally occuring mammalian virus, specifically by scientists at one of the three advanced virology facilities in and around the city of Wuhan.

And then, Baker – who is extremely careful to distinguish between facts and suppositions – speculates that “it eventually got out” by hazard. Release via “a lab accident — a dropped flask, a needle prick, a mouse bite, an illegibly labeled bottle,” he emphasizes, “isn’t a conspiracy theory. It’s just a theory.” But he rightly argues that “It merits attention…alongside other reasoned attempts to explain the source of our current catastrophe.”

But where do the roles of the U.S. and global public health establishments come in? During recent decades, as Baker reports, scientists have been conducting “’gain of function’ experiments — aimed to create new, more virulent, or more infectious strains of diseases in an effort to predict and therefore defend against threats that might conceivably arise in nature.” And many of these experiments were funded by the Fauci’s Institute at the NIH. (Similar work was being funded by the Defense Department, whose interest in bio-weapons and fighting them was reawakened by the increase in global terrorism in the 1990s and the prospect that germs like anthrax would be used to advance extremist goals. This threat, of course, materialized right after September 11 with letters containing the germs sent through the mail – in an immense irony – by a U.S. government bio-weapons researcher.)

As implied immediately above, Fauci and his colleagues had the best of intentions. But as Baker documents exhaustively, they ignored numerous warnings from fellow professionals that, in no less than two related ways, they might be creating a problem far worse than that they were trying to solve. First,in their determination to design in the lab super-dangerous bio threats that terrorists hypothetically might some day create and use, they lost sight of how their own experiments could unleash such actual threats in the here-and-now due to the real possibility of leaks (hardly unknown in the world of biological research).

In Baker’s words, “Why, out of a desire to prove that something extremely infectious could happen, would you make it happen? And why would the U.S. government feel compelled to pay for it to happen?” Echoing these worries were numerous scientists, such as Johns Hopkins biomedical engineer Steven Salzberg, who noted several years ago, “We have enough problems simply keeping up with the current flu outbreaks — and now with Ebola — without scientists creating incredibly deadly new viruses that might accidentally escape their labs.”

Second, no evidence has been found yet that any of the coronaviruses that are naturally occuring and that have infected humans (like the SARS “bird flu” – which actually came from mammals – of 2002-03) are remotely as contagious as their lab versions, or are found in animals that often come into contact with humans outside China and its wet markets. In fact, Baker quotes Rutgers University microbiologist Richard Ebright has describing Chinese virologists’ efforts to scour remote locations for animal sources of natural coronaviruses that can be supercharged in a lab as “looking for a gas leak with a lighted match.”

In addition, Fauci arguably magnified these dangers by channeling some of the U.S. government funding for “gain of function” research to the Wuhan virology labs. On the one hand, this decision made sense (as long as gain-of-function was being sought in the first place) because China has been the origin point of so many mammalian coronaviruses, and therefore the home of so many leading virus specialists. On the other hand, safety first hasn’t exactly been a national Chinese watchword.

So the implications for simply “following The Science” seem clear. And they go beyond what should be (but isn’t) the screamingly obvious point that, especially in a field as new and rapidly changing as this branch of virology, there is no “The Science.” Expert opinion almost inevitably will be mixed, and politicians and their journalist mouthpieces flocking to one side while completely ignoring the other is bound to end badly. Matters are bound to end even worse, of course, when the favored faction aggressively tries to stamp out and discredit as “conspiracy thinking” the other’s theories – as Baker shows indisputably was the case with public health authorities and experts (including Fauci) who continue to try absolving the Wuhan labs from any responsibility.

More important, this tale bears out what I and many others have written for months (e.g., here): The pandemic is a crisis with many dimensions – economic and social as well as medical. The public health establishment’s contributions are indispensible. But not only is its expertise limited. Like any other human grouping defined by common characteristics and experiences like fundamental interests and educational backgrounds and occupational environments, this establishment is influenced by its own distinctive unconscious biases and predispositions.

In this case, in Baker’s words, some of the most important are “scientific ambition, and the urge to take exciting risks and make new things.” All of which are perfectly fine and even praiseworthy – in their place.

Further, the medical dimension of the crisis is complex, too, as shown both by all the evidence of major public health costs generated by the lockdown and stay-at-home orders championed so singlemindedly by Fauci and his acolytes, and by the strong disagreements among the virologists and similar researchers laid out in such detail by Baker. So it’s the job of political leaders to take all these considerations into account, not to act as if only one cohort of advisers has a monopoly on wisdom in all relevant areas.

And let’s end on an O’Henry type note. I can’t resist pointing out that President Trump, too, has been one of those U.S. leaders whose administration has robustly funded this gain-of-function research – one of the few instances in which he’s, apparently with no objections, followed The Science.

(What’s Left of) Our Economy: U.S. Manufacturing’s Biggest 2020 Winners & Losers

Tags

aerospace, automotive, Boeing, CCP Virus, computer and electronics products, consumer goods, coronavirus, COVID 19, energy, Federal Reserve, food products, fossil fuels, furniture, housing, industrial production, inflation-adjusted output, lockdowns, machinery, manufacturing, on-line shopping, stay-at-home, travel, wood products, Wuhan virus, {What's Left of) Our Economy

Thanks to last Friday’s release of the Federal Reserve’s report on December U.S. manufacturing production, it’s possible to identify the sector’s biggest winners and losers for inflation-adjusted growth. And their ranks include some notable surprises. (As with all U.S. government economic data, though, there’ll be plenty of revisions over the next few years.)

First, let’s keep in mind that the following categories are pretty broad, including a wide range of products whose performances have varied just as widely. For example, as noted previously (e.g., here), “machinery” contains everything from machine tools to heating and cooling equipment to semiconductor production gear to turbines to construction equipment to farm machinery.

Still, these groupings are specific enough to show how much care is needed when generalizing about the performance of a piece of the economy as big as manufacturing. Moreover, they’re the categories that come early on in the incredibly detailed presentation each month of manufacturing output results deep in the weeds of the Fed’s own website.

With these observations in mind, the five strongest growers (or most modest shrinkers) in manufacturing during 2020 were automotive (vehicles and parts combined) at plus-3.64 percent; food, beverage, and tobacco products (up 0.40 percent), wood products (0.38 percent), computer and electronics products (up 0.14 percent), and non-metallic mineral products (down just 0.52 percent).

The biggest losers? Petroleum and coal products (down 13.34 percent); printing and related activities (off by 10.41 percent); furniture and related products (down 9.86 percent); non-durable miscellaneous manufactures (down 8.57 percent); and aerospace and other non-automotive transportation equipment (an 8.27 percent contraction).

Some of these results were entirely predictable. For example, petroleum and coal products essentially entails the fossil fuels industries, which have been decimated by the overall U.S. and global economic slumps triggered by the CCP Virus, and by the particular hit taken by business and leisure travel. And don’t forget the lingering effects of Boeing’s safety troubles. Moreover, of course those Boeing woes in turn have taken their toll on the aerospace sector.

On the flip side, despite major concern about the strength of America’s food supply chain, it proved impressively resilient. And since Americans didn’t stop eating, real food production expanded – although as the table below shows, its this expansion was much slower than in 2019.

I’m not sure what’s been up with furniture, though, especially considering that the good performance of wood products surely reflects the strength of a domestic housing industry that should have spurred production of furniture. Moreover, so far, the 2020 trade statistics reveal no significant increase in imports.

Non-durable miscellaneous manufactures are something of a puzzle, too. This category includes items like jewelry, silverware, sporting goods, toys, and musical instruments. Since on-line shopping has propped up consumption during the pandemic period, purchases and domestic production of these goods should have remained strong, too – even though many of these sub-sectors have long dominated by imports.

And speaking of imports, a clear sign of their importance is the negligible growth of the domestic computer and electronics industries. It’s clear that the virus and related lockdowns and stay-at-home orders has greatly increased demand for information technology products. But it’s evident that the biggest winners weren’t U.S.-based suppliers. In fact, 2020 growth was way below 2019’s, as the table below shows.

Meanwhile, the solid growth of the automotive sector is pretty remarkable, since the sector literally shut down almost completely in March and April. That looks like awfully strong evidence that much of the economic damage of the pandemic period has stemmed from government restrictions, and not from any inherent weakness in the economy.

In any event, below are the results for all of manufacturing’s main big industry groups, along with the data for the durable goods and non-durable goods super-sectors, and industry overall. For comparison’s sake with the pre-CCP Virus period, I’ve also presented their after-inflation growth for 2019. And a year from now, the final Fed 2021 statistics will permit judging just how complete a retun to normalcy has been achieved.

                                                                              2018-19              2019-20

manufacturing                                                        -1.06                   -2.63

durable goods                                                         -1.70                   -2.97

wood products                                                       +3.58                  +0.38

non-metallic mineral products                               -1.17                   -0.52

primary metals                                                       -2.69                   -7.66

fabricated metals products                                     -1.72                   -5.38

machinery                                                              -2.39                   -3.80

computer & electronics products                          +6.19                  +0.14

electrical equipmt, appliances & components       -1.71                   -1.68

motor vehicles and parts                                        -9.05                  +3.64

aerospace and misc transporation equipment       +0.29                   -8.27

furniture and related product                                +0.34                   -9.86

miscellaneous manufactures                                +0.30                    -3.67

non-durable goods                                                -0.72                    -2.24

food, beverage and tobacco products                  +2.67                   +0.40

textiles and products                                            -2.24                    -5.04

apparel and leather goods                                    -7.50                    -3.64

paper                                                                    -2.37                    -1.91

printing and related activities                              -3.20                  -10.41

petroleum and coal products                               -1.32                  -13.34

chemicals                                                            -2.07                     -1.31

plastics and rubber products                               -3.24                     -0.78

other manufacturing                                           -8.59                      -8.51