Im-Politic: The Pandemic is Over! (Unless It’s Not?)

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Biden, CCP Virus, Chincoteague, coronavirus, COVID 19, facemasks, Im-Politic, lockdowns, Maryland, mask mandate, Prince George's County, Riverdale Park, shopping, shutdowns, stay-at-home, Wuhan virus

Some recent experiences of mine, though of course by definition anecdotal and therefore inconclusive, have still been mixed enough to indicate that President Biden is right about his plan for the July 4^th holiday. His idea of using Independence Day “to mark the country’s effective return to normalcy after 16 months of coronavirus pandemic disruption” may be just what many Americans still need to shed the “masks for all” and “stay at home” mentalities despite major signals from political and public health authorities’ at all levels of government that such hypercaution is no longer necessary.

In fact, these experiences have not only been mixed. A couple have been downright puzzling.

For instance, as I’ve written previously, my town in a Maryland suburb of Washington, D.C. is pretty darned woke. It’s granted the right to vote in local elections to all illegal aliens 16 years of age and older who can show they’ve just briefly resided in Riverdale Park. And when it comes to the virus, many residents seem to have been caught up in pandemic virtue-signaling and scolding. In addition, our county – Prince George’s – has been lifting virus-related restrictions much more slowly than the rest of the state. (In fairness, it’s infection and hospitalization rates have consistently been on the high side.)

But on one of my (quasi-) daily strolls through the town, during the same conversation, a thirty-something neighbor both proclaimed himself “one of the wokest people you’ll ever meet” and declared that “this [virus] thing is over!” And for the first time since I began noticing him sitting on his porch and met him a few months ago, we shook hands.

In addition, at the local farmer’s market where last summer I was scolded for lowering my mask to sniff some fruit for ripeness (see the above-linked September 26, 2020 RealityChek post) two weeks ago, no one scolded me for paying a visit maskless even though face coverings were still being worn a this outdoor venue (including by folks who almost certainly, like me, are fully vaccinated). And no one scolded me this time for sniffing some fruit.

Best of all, about a week ago, I was able to shop maskless at my mainstay grocery store. What a thrill to be able to spend my normal hour-and-a-half going through the aisles without a piece of cloth smothering my bearded visage and getting sucked halfway into my mouth with each inhalation!

At the same time, on my previous trip to this store, masks seemed to still be required – even though the county’s indoor mask mandate had been lifted, even though the company’s website specified that its stores in this county would no longer require masks, and even though the floor markers in the aisles aimed at aiding social distancing had been removed for about a month. (They remained for the checkout lines.)

Normality signals were even more oddly mixed on a recent trip to a favorite beach destination: Chincoteague, Virgina. Since the town relies heavily on vacationers, and presumably had been hard-hit by travel curbs and lockdowns, I expected that it hoped for virus-related curbs to be lifted sooner rather than later. Moreover, without having researched its politics, I surmised that it’s on the whole a risk-tolerance and decidedly conservative place – both because it’s still small and seemingly tradition-minded (though apparently by no means averse to the noteworthy development that’s taken place during the three decades that I’ve been visiting), and because more than a few residents still earn their living at hard-scrabble actitivies like fishing, or are descended from those who did. Indeed, on the three-hour drive there from Prince George’s, through other pretty similar towns and farmland, a handful of Trump-Pence signs could still be seen – but no Biden-Harris placards.

Yet I was still pretty taken aback by how crowded the area was for an early June mid-week stretch of days, and even more surprised to learn that Chincoteague had been hopping since March. As I was told by several wait staff and merchants, “People really want to get back to their lives.” Which made perfect sense to me upon remembering that Chincoteague tends to attract a much more middle-class and (for lack of a better term) middle-brow crowd than nearby beach towns that tend to be either college student or yuppie meccas.

Even so, one of three of the four restaurants we patronized (and always patronize) in town and along the way required masks in the waiting area and any time customers left their tables. All the staff wore face coverings, too. In our other three favorites, neither customers nor staff were wearing masks at any time. One of the town’s book stores mentioned on its website (but not on the premises) that masks are mandatory, but when I entered mask-less and offered to show the co-owner behind the counter my vaccination card, she laughed and said not to bother. This relaxed attitude, however, wasn’t evident on its upper level, which I’ve always liked because of the easy chairs that enable you to thumb through your prospective purchases while taking a load off. The easy chairs were marked off-limits till the pandemic passed – whenever that’s supposed to be.

Further, the much smaller, much more ramshackle book shop about halfway to (or from) Chincoteague greeted customers with a big “Masks Required” sign on the front door. I had my vaccination card with me then, too, but didn’t want to make a scene – partly because it’s a much more close-quarters place than its Chincoteague counterpart. So I endured the mask inhalation thing while squeezing through and contorting myself around the incredibly cramped (but incredibly well stocked) paperback science fiction section in search of gems for a buck.

So I’ll be rooting for the President to be in top form if he does indeed declare July 4^th to be Independence from the Virus Day. And due to his own hypercaution for so long, he could well be a highly credible carrier of the message that it’s finally time for all Americans who don’t need to take special precautions to understand that it’s really over.

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(What’s Left of) Our Economy: It’s an Autos Story Again for U.S. Manufacturing Production

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aerospace, aircraft, aluminum, apparel, automotive, Boeing, CCP Virus, chemicals, China, computers, coronavirus, COVID 19, Donald Trump, electronics, facemasks, Federal Reserve, health security, inflation-adjusted output, machinery, manufacturing, medical supplies, paper, pharmaceuticals, PPE, printing, real growth, semiconductor shortage, semiconductors, shutdowns, steel, stimulus, tariffs, vaccines, Wuhan virus, {What's Left of) Our Economy

Earlier in the CCP Virus era, the U.S. manufacturing production story was largely an automotive production story – because the industry shut down so suddenly and completely during the pandemic’s first wave and the deep economic downturn it triggered, and then began reopening at a record pace. And today’s Federal Reserve figures show that domestic industry’s growth is being driven by dramatically fluctuating vehicles and parts output once again – but this time it seems due significantly to the global semiconductor shortage that’s deprived the sector of critical parts.

Also noteworthy about today’s Fed manufacturing release (which covers May): It incorporates the results of the benchmark revision of these data for the 2017-19 period. As explained in yesterday’s post on the subject, the new numbers create a new baseline for pre-pandemic manufacturing growth, and therefore a new picture of how big the virus-induced downturn was, and how strong the recovery has been – at least until the next benchmark revision. And of course, the new figures therefore supersede those in the April Fed release I reported on last month.

Automotive’s influence on the May numbers is clear from the following: Total inflation-adjusted sequential growth for U.S.-based manufacturing hit a strong 0.89 percent last month. Without automotive (whose 6.69 percent monthly output pop followed a 5.57 percent April drop), the increase would have been just over half that – a still solid 0.50 percent. Don’t be surprised if the microchip shortage keeps these results on a roller coaster.

Its May increase brought total real domestic manufacturing output back within 0.31 percent of its last pre-pandemic level, in February, 2020. In March and April, such production plummeted by 19.41 percent. Since then, it’s surged by 23.90 percent. For the record, as I wrote yesterday, the pandemic-spurred Spring, 2020 nosedive was slightly shallower (0.92 percent) than judged before the revisions (1.42 percent) but the comeback through this past April was a bit weaker (22.81 percent versus 23.27 percent).

Machinery making enjoyed a good month in May, and as known by RealityChek regulars, that’s good news for all domestic manufacturing and the rest of the economy, since its products are so widely used. Constant dollar output improved by 0.78 percent last month, and consequently, the sector is now 2.35 percent bigger in these terms than just before the virus started depressing the economy. One downside should be noted, though: The new revision indicates that the machinery recovery has actually be significantly slower than previously estimated.

Manufacturing’s list of other big inflation-adjusted production winners in May featured some real surprises. The apparel and leather goods industries remain shadows of their historic selves, but their real output last month jumped 2.59 percent – their best such result since January’s 2.06 percent. Moreover, this sector has grown in real terms by 6.74 percent since just before the pandemic – much faster than manufacturing as a whole.

After-inflation production in the small printing and related activities industry grew by 2.59 percent – also its best result since January (3.99 percent).

But some big sectors saw healthy gains in May, too – notably chemicals (whose products are also used throughout the economy) and computer and electrnics products. The former saw real production advance by 2.19 percent sequentially last month – its best such result since March’s weather-aided 4.08 percent. And the latter grew in May by 1.60 percent.

The biggest losers? Paper led this pack by far, with May constant dollar production sinking by 1.59 percent on month – its worst such showing since January’s 1.78 percent decrease.

Likely due to Boeing’s continuing production and safety problems (more on which later), the aerospace and miscellaneous transportation sector’s after inflation production sank by 0.95 percent sequentially in May – and that followed a 2.55 percent nosedive (no pun intended) in April. And wood products real output fell by 0.82 percent.

But the losers’ list contains a big surprise, too. Complaints keep coming that that the domestic steel and aluminum industries (and especially the steel-makers) have responded to tariffs simply by enjoying the higher resulting prices and sitting on these winnings. So it’s noteworthy that even after a 0.82 percent monthly real output decline in May, primary metals production after inflation is slightly (0.15 percent) higher than in immediate pre-pandemic-y February, 2020 – another such performance that’s bested that for all manufacturing.

The aforementioned problems suffered by Boeing keep coming through in the real output data for the aircraft and parts sub-sector of the aerospace and miscellaneous transportation industry. In May, inflation-adjusted output was down 1.47 percent on month – much bigger than the larger industry fall-off. And that came on the heels of April’s 2.21 percent decrease. Real aircraft and parts production is still 4.36 percent above its immediate pre-pandemic level, but given the ongoing post-CCP Virus worldwide rebound in air travel, these figures are definitely disappointing – and moving in the wrong direction.

By contrast, the big pharmaceuticals and medicines sector is still benefitting from reopening headwinds. May’s 0.22 percent monthly real output increase was admittedly modest, especially since this sector includes vaccine production. But it’s grown by 8.44 percent since the virus began spreading rapidly in the United States. on g – also delivered a disappointing performance in April, especially since it includes vaccines.

But both the May real production numbers and the benchmark revision left the vital medical equipment and supplies sector a conspicuous production laggard. This industry – which includes virus-fighting items like face masks, face masks, protective gowns, and ventilators – grew in real tems by just 0.19 percent sequentially in May, and April’s after inflation output was down 1.66 percent. As a result, this sector is turning out only 0.35 percent more product than just before the pandemic’s arrival – which doesn’t seem to augur well for national preparedness for the next pandemic.

If I was a betting person (I’m not), I’d still wager on better days ahead for U.S. domestic manufacturing – because so many powerful supportive trends and developments remain in place, ranging from massive government spending and other forms of stimulus to the virus’ continuing retreat to waning consumer caution to huge amounts of pandemic-era consumer savings to ongoing Trump tariffs that keep pricing huge numbers of Chinese goods out of the U.S. market.

But no one should forget about a list of threats to the pace of manufacturing growth, if not growth itself – like the prospect of higher taxes and more regulations, and the possibility that consumer demand will keep growing but switch away from goods to the hard-hit but quickly reopening service sectors (which of course do buy manufactures). Inflation isn’t good for strong (real) growth, either, though I’m an optimist on this front.

Ultimately, though, I’m most struck by evidence of domestic manufacturers’ continuing optimism about the prospects of their businesses. If they’re still confident about their futures, that remains good enough for me.

(What’s Left of) Our Economy: The Latest Data Remain Full of Normalization Puzzles

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Biden, CCP Virus, China, construction, coronavirus, COVID 19, Donald Trump, exports, goods trade, imports, inflation, inflation adjusted wages, labor shortages, leisure and hospitality, lockdowns, manufacturing, metals, non-oil goods trade deficit, non-supervisory workers, private sector, real wages, reopening, retail, services trade, shutdowns, tariffs, Trade, Trade Deficits, transportation, wage inflation, wages, Wuhan virus, {What's Left of) Our Economy

While I was away for a few days last week, two major U.S. government reports came out both giving off conflicting signals on on whether the economy has started to return to normal in critical ways as the CCP Virus subsides and reopening, along with consequent changes in consumer behavior, proceed.

The monthly trade figures (for April) showed a sequential decline, following a record surge, in America’s chronically huge gap between exports and much larger amounts of imports. Moreover the monthly drop took place as economic growth sped along at unusual rates after being shut down by government mandates and consumer caution. So maybe they’re an early sign that a return to immediate pre-virus conditions has begun?

Or is their most important message that these deficits, and especially the import levels, are still hovering near all-time highs in (the most widely followed) pre-inflation terms even though the economy as of the latest (first quarter) numbers is still a bit smaller in (the most widely followed) inflation-adjusted terms than during the last full pre-pandemic quarter (the fourth quarter of 2019)?

Indeed, the deficits are gargantuan even though President Biden has left former President Trump’s substantial tariffs on metals and goods from China practically untouched. 

The monthly inflation numbers (for May) are similarly confusing. They revealed that consumer prices (just one inflation measure published by Washington, but an important one) rose by 4.93 percent in seasonally adjusted terms. That was their fastest annual pace since September, 2008’s 4.95 percent. Surely, as widely claimed (including by the Federal Reserve, which wields so much influence over the economy, this upswing stems from a combination of bottlenecks resulting from (1) the sudden, widespread reopening; (2) the unusually low overall inflation numbers generated a year ago, when the economy was near the depths of its viruts- and shutdown-induced slump; and (3) the immense dose of stimulus injected into the economy by both elected politicians and the unelected Fed.

At the same time, the Fed has told us that its stimulus isn’t ending anytime soon, and although the Biden administration and Congressional Democrats are displaying some cold feet about approving more such levels of economic fuel (e.g., in the form of outlays on infrastructure, and a wide variety of income supports and enhanced unemployment benefits), it’s difficult to imagine that most or even much of this spending will actually be withdrawn even once a post-virus recovery is an indisputable reality.

But the biggest surprise of all: Despite the economy-wide inflation pressures, and by-now-routine claims that employers are dealing with nearly crippling labor shortages, wages overall adjusted for inflation keep going down.

Compounding the confusion over whatever conclusions can legitimately be drawn from these two reports: They cover two different months.

But let’s begin with the most important details from the April trade report. The ambiguity embodied in the data begins with the total deficit figure. The record March result was revised up from $74.45 billion to $75.03 billion but April’s $68.90 shortfall for goods and services combined, though the second worst monthly figure ever, was 8.17 percent smaller. That’s the biggest sequential drop since February, 2020 (8.39 percent), when China’s export-heavy economy was still largely closed because of the virus.

The same holds for the goods trade gap. The record March figure was revised up, too, from $91.56 billion to $92.86 billion. But April’s $86.68 billion result represented a 6.65 percent monthly decline, and this falloff was the biggest since the 8.39 percent plunge of January, 2019 – when American businesses were still adjusting both to Trump’s tariffs and anticipated tariffs.

Also still fueling the high U.S. deficits – a worsening of services trade balances. Here, U.S. trade has long been in surplus, but the surpluses keep shrinking because service sectors like travel are still suffering from the pandemic’s arrival and the consequent decimation of travel and othe transportation in particular. In fact, the April figure of $17.78 billion was the lowest since September, 2012’s $18.62 billion.

One key set of trade flows does, however, provide some evidence of Trump tariff effectiveness – U.S. non-oil goods trade, which encompasses those exports and imports whose magnitudes are most heavily influenced by trade policy (because, as known by RealityChek regulars, trade in oil is almost never the subject of any trade policy decisions and services trade liberalization remains at very early stages). In April, the monthly shortfall retreated 4.16 percent from its March record of $90.12 billion to $86.37 billion – which is only the fourth highest such total ever.

The import figures I focused on last month exhibit the same overall patterns: April saw big drops from record levels but the absolute numbers remain distressingly high. March’s initially reported record $274.48 billion in total imports was revised up considerably – to $277.69 billion. April’s total of $273.89 billion represented a 1.37 percent drop, but nonetheless was the second worst such figure on record.

March’s record monthly goods import figure was upgraded, too – from $234.44 billion to $236.52 billion. April’s total of $231.97 billion was a 1.92 percent drop but these purchases also still represented the second highest of alll time.

As for non-oil goods imports, the $215.33 billion April total was 1.98 percent down from an upwardly revised record $219.68 billion, and also the second biggest ever. Biggest drop since last April’s 10.91

Whether normalization is returning in manufacturing is more difficult to tell. Imports in March hit a record $207.59 billion, and did drop by 4.59 percent sequentially to $198.06 billion in April. That decrease, however, was a typical monthly move for manufacturing imports, and the April figure was still the third highest ever.

Incidentally, the April manufacturing deficit of $103.60 billion was 4.64 percent lower than March’s $108.66 billion. The March total was the second highest on record, but April’s figure was only the seventh all-time worst. The record, $110.20 billion, came last October, and it’s notable that the gap has narrowed on net despite the resilience shown during the pandemic period by manufacturing output.

More evidence of the Trump tariffs’ impact comes from the data on goods trade with China – whose products have attracted nearly all of these levies, and that cover hundreds of billions of dollars worth of products. The April figure of $37.59 billion was 6.56 percent lower than its March predecessor – a thoroughly unexceptional sequential decline and monthly level by historical standards. But the monthly dropoff was consideraby greater than the aforementioned 1.98 percent decrease for non-oil goods – the closest global proxy.

As a result of all these inconclusive developments, I’ll be awaiting the May trade report with even more interest than usual.

But despite all the uncertainties I mentioned at the start of this post, those May inflation figures have made me more confident than before in my previous contention that current price surges are anomalies by the extremely low inflation generated by the CCP Virus-battered economy of a year ago, and by the sudden reopening of so much of the economy following the long shutdowns and lockdowns. Even clearer, as I see it: Claims of significant, troubling wage inflation are especially weak.

After all, that 4.93 percent year-on-year May price increase followed a previous May-to-May rise that was just 0.22 percent. That was the feeblest such rise since September, 2015’s 0.13 percent. In addition, May’s month-to-month 0.64 price advance was smaller than April’s 0.77 percent. Two months do not a trend make, but these numbers certainly don’t point to raging inflation fires.

Nor do the wage data. Otherwise after-inflation total private sector wages wouldn’t be down more on-month in May (-0.18 percent) than in April (-0.09 percent). And the same couldn’t be said of constant dollar wages for non-supervisory workers (-0.20 percent in May versus flat in April).

Getting more granular, the price-adjusted wage trends are as bad or worse in construction; trade, transportation and utilities overall; retail trade; and education and health services.

The two big exceptions: the leisure and hospitality workforces that have been so decimated by the virus (and especially the non-supervisory group) and the transportation and warehousing sub-sector of the transportation and utilities industry category that contains a trucking sector unusually strained by the rapid reopening. In both cases, however, (and especially the leisure and hospitality industry), inflation-adjusted wages in absolute terms are well below the national private sector average. If anything, therefore, it seems like some wage inflation for these workers is long overdue.

(What’s Left of) Our Economy: Why Inflation Isn’t Worrisome So Far

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CCP Virus, CNBC, coronavirus, COVID 19, Federal Reserve, inflation, logistics, reopening, semiconductor shortage, shutdowns, Steve Liesman, stimulus, supply chains, transportation, West Coast ports, Wuhan virus, {What's Left of) Our Economy

By now you’ve surely seen or heard – or should have seen or heard – that the new U.S. official figures (for April) show that inflation is back big time and could all too easily spin out of control. The emphasis should be on “could,” because, as also widely observed (including by the Federal Reserve, which is a major U.S. government line of inflation defense), the recent price rises arguably stem from developments that are temporary byproducts of America’s utterly unprecedented economic circumstances these days – reopening in fits and starts, but overall quickly, from lengthy government-mandated shutdowns aimed at fighting the CCP Virus.

I’m pretty firmly convinced that the inflation optimists are right, even though the pessimists make strong points in observing that (a) prices have been rising faster on a monthly basis with each passing month this year; and (b) inflation tends to generate its own momentum. That is, the expectation of rising prices typically encourages households and businesses alike to step up their purchases in order to avoid paying more for the same goods and services later on. Further, more expensive inputs for specific businesses can easily prompt those companies to compensate by raising the prices they charge their customers, while at the same time generating the same reactions from other businesses that are their customers, and so on.

I’ll also grant that the pessimists shouldn’t be dismissed when they contend that even temporary inflation can cause serious damage to an economy, especially when we’re talking about price increases that only come to an end after, say, a year or longer rather than after two or three months. Therefore, it’s important to note that the optimists’ case depends heavily on the relatively rapid end to the price-boosting combination of sudden increases in consumer demand resulting from the reopening, and of all the supply bottlenecks that have emerged as businesses struggle to catch up with that demand – which of course is being buoyed by the immense doses of stimulus being injected into the economy, and that may be increased in the near future.   

Indeed, the prolonged shipping backups at West Coast ports should be making clear that the more optimistic definition of “temporary” might rest on some pretty dicey assumptions. In addition, we’re unlikely to see a quick end to the global semiconductor shortage that’s shut down considerable automobile production and thinned inventories all over the world – curbing supply and of course driving up prices.

So why am I optimistic? Largely for a reason that’s been generally overlooked in the inflation uproar. (One major exception has been CNBC’s Steve Liesman, whose segment yesterday partly inspired this post.) When you look at where prices actually are now in the economy as a whole, and even in particularly hot sectors, you find that they’re not much higher than they were just before the pandemic hit (in February, 2020, which will be the baseline month I’ll use). And that’s because they had been falling or weak for so many months while much of the economy was closed.

This methodology, to start, puts an entirely different shine on the news that the overall April inflation rate of 4.2 percent year-on-year was the strongest such surge since September, 2008. But from February, 2020 to April, prices by this broadest measure increased by just 3.1 percent. That’s much higher than the 1.3 percent increase during the previous comparable period (February, 2019-April, 2020). Remember, however: April, 2020 was the depth of the virus-related lockdowns and consequent recession.

During the February-April period before that, prices rose 2.4 percent – and that’s with none of the stop-start distortions currently being experienced. The period before that it was 2.6 percent. And the period before that – also a normal stretch – it was 2.9 percent. And in comparable (also normal) 2011-2012 timespan, it was 3.3 percent. So the new 3.1 percent doesn’t seem all that exceptional when you consider all the abnormalities of this post-virus recovery.

Another widely watched inflation gauge is called “core inflation.” It strips out food and energy prices because they can be volatile over whatever timeframe examined for reasons having nothing to do with the economy’s fundamentals – and supposedly fundamental vulnerability to inflation (e.g., unusual weather that impacts agriculture, or oil price decisions by the OPEC cartel and other major foreign producers).

On a monthly basis, they advanced by 0.9 percent, and year-on-year they were up three percent in April. The former figure was the worst since 1982, and the latter is on the high side as well. But let’s look at the February-April numbers. Between 2020 and 2021, core inflation was 2.6 percent. It was just two percent during the previous comparable period, but again, those numbers are distorted by deflationary April, 2020. The period before it was 2.6 percent – the same as this year, but without the reopening issues. And as recently as 2016, it was even higher – 2.7 percent – even with no virus-related confusion.

As they say in the investment advice world, past performance is no guarantee of future results. Nor should it be forgotten that many economists still find inflation frustratingly difficult to measure, and criticisms of the U.S. government’s methodology abound as well. (See, e.g., here.) But the official American figures are still widely followed, and certainly lie at the heart of the latest bout of inflation angst. And until these data start showing outsized price gains compared with pre-CCP Virus levels that haven’t been affected by virus-era abnormalities, I’m going to stay pretty relaxed about the U.S. inflation picture.*

Please note: This inflation analysis should not be used as investment advice, because I’m not in that business and don’t feel qualified to be in that business. Also, what I do know of that business teaches that asset prices are much more profoundly influenced by what investors as a whole think about the economy than by what I think about it.

(What’s Left of) Our Economy: The CCP Virus Lockdowns’ State-Level US Effects II

Tags

CCP Virus, Commerce Department, coronavirus, COVID 19, lockdowns, shutdowns, states, stay-at-home, Wallethub.com, Wuhan virus, {What's Left of) Our Economy

Yesterday’s RealityChek post presented some facts about the economic performance of America’s states during the CCP Virus era that struck me, anyway, as surprising and important. And it ended with the observation that two big states that have imposed relatively sweeping anti-virus curbs on business and consumer activity – New York and California – accounted for a considerably outsized share of the national economy’s shrinkage during the pandemic through the third quarter of this year (the latest economic statistics available).

Today’s post will use the same data – from a recent Commerce Department report – to show that overall, the states with the most restrictive lockdown etc regimes have generally experienced the biggest economic contractions. That conclusion may sound too obvious to bother thinking about, but it matters because economic distress, as I’ve written repeatedly, produces its own serious public health (both mental and physical costs). Moreover, at least according to most of the public health establishment, even if mass vaccination goes as quickly and smoothly as realistically possible, normality could still be nearly a year off.

As with the previous post, however, some qualifications need to be discussed, and in addition to yesterday’s, two more should be kept in mind. First, despite the connection between CCP Virus-related economic and business curbs on the one hand and slumping economies on the other, there’s a non-trivial number of exceptions, as will be shown below. So it’s distinctly possible that some states have found the kind of balance between still-sometimes (but not always) conflicting economic and public health imperatives that’s worth emulating.

Second, not only have the lockdowns etc been very on-and-off in nature since the pandemic became a pandemic in late winter, but measurements of these lockdowns’ scale unavoidably entail a pretty fair amount of subjectivity.

The source I’m using for this (at this link) looks on-target in general to me. But I have to admit puzzlement at some of the rankings. For example, the source organization, Wallethub.com, places Michigan right in the middle of these rankings – even though Michiganders have been among the most vehement opponents of virus curbs. Have many of the folks directly experiencing this state’s restrictions just been throwing unwarranted tantrums?

Moreover, Maryland, where I live now, has imposed pretty tight restrictions, too, although at least Republican Larry Hogan has been one of those governors who’s given different counties a fair amount of regulatory autonomy since the state (like even many smaller ones) is fairly diverse. But I’m not convinced that overall its curbs have been patchy enough to place it in the lockdowns-light half of states.

Meanwhile, New Mexico is ranked just a little more restrictive than Michigan, though my own look at this state’s policies concluded they’ve been quite lockdown-y.

But nobody’s perfect, so I’m going with Wallethub.com as my lockdown guide, and here’s what I did. First, I looked at the ten states whose economies grew the most (or contracted the least) between the firt and third quarters of this year, and identified where they stand in the Wallethub rankings, and then performed the same exercise with the ten states that suffered the worst contractions. The growth (and contraction) figures represented percentage changes in real gross domestic product, and the Wallethub scale assigns the least restrictive states the lowest numbers. Here are the results:

Top 10 1Q-3Q GDP                                               rank on lockdown scale

Utah: +1.07                                                                            3

Washington: +-0.44                                                             36

Delaware: -0.08                                                                   31

Arizona: -0.52                                                                     45

Iowa: -0.54                                                                            5

Idaho: -0.81                                                                           2

Indiana: -1.01                                                                      15

Georgia: -1.03                                                                     13

Arkansas: -1.27                                                                   10

Alabama: -1.34                                                                   14

The big takeaway? Of these ten states, seven imposed relatively light anti-CCP Virus restrictions

(earning rankings in the lowest half of the fifty states plus the District of Columbia). And four of these states were among the ten least restrictive states. So that looks like solid evidence that the relatively open states were rewarded with the best economic performances, and that this openness as such deserves significant credit. But three states on this list put into effect lockdowns on the tight side and fared relatively well economically, too – Washington, Delaware, and Arizona.

Have they found the policy sweet spot? Or is there something about their economies’ structures that have produced economic resilience? One observation pointing to the importance of structure: both Washington and Arizona boast highly developed tech sectors – Amazon and Microsoft, e.g., headquartering the former, and the latter containing much semiconductor production.

Here are the states with the worst growth performances during the pandemic:

Bottom 10 1Q-3Q GDP                                               rank on lockdown scale

Hawaii: -6.67                                                                              51

Wyoming: -5.24                                                                           7

New York: -4.56                                                                        38

Oklahoma: -3.84                                                                         4

Tenn: -3.33                                                                                18

Alaska: -3.28                                                                             12

Nevada: -3.14                                                                            20

New Jersey: -3.08                                                                     47

Vermont: -3.06                                                                          41

North Dakota: -2.98                                                                   9

And these results seem to cut against those of the previous list – because of these low growers, only four had imposed very restrictive lockdowns (Hawaii, New York, New Jersey, and Vermont). Further, three were among the very least restrictive states (Wyoming, Oklahoma, and North Dakota). And the other three were well in the half of states that have been least restrictive (Tennessee, Alaska, and Nevada).

Nonetheless, economic structure considerations as well as policy measures seem to be influencing these results. Principally, Wyoming, Oklahoma, and North Dakota all depend very heavily on a fossil fuels sector that has been plunged into a deep slump due to the virus’ overall economic effects. And lockdown-light-ish Nevada has suffered from the tourism depression.

Now let’s view the situation from the opposite perspective. Let’s take the states with the ten tightest and ten loosest lockdown regimes, and examine their respective economic performance. First, the ten tightest lockdowners, with the most resrictive at the top:

Most restrictive on lockdowns                                1Q-3Q GDP growth rank

Hawaii                                                                                    50

California                                                                               36

Mass.                                                                                      32

Maine                                                                                     34

New Jersey                                                                             47

Colorado                                                                                 33

Arizona                                                                                    4

Oregon                                                                                   20

Pennsylvania                                                                          37

Vermont                                                                                  41

Here the correlation between policy and performance looks awfully strong. Fully eight of the ten biggest economic loser states are among the states with the tightest lockdowns, and three of these are among the ten most restrictive. Interestingly, Arizona comes across as a standout according to this measure, too.

Economic structure is playing a role here, too – as seen by the presence of tourism-reliant Hawaii and Vermont. In addition, Pennsylvania’s become a big energy state thanks to the Marcellus shale formation, and Colorado has long depended heavily on both energy and tourism.

At the same time, Pennsylvania’s got lots of office workers who’ve been able to do their jobs from home – as does New Jersey (which along with New York was hit early and hard by the virus). And what gives with California – of course tourism-heavy, but in many ways the center of both high tech manufacturing and high tech service provision in the nation, not to mention research and development?

So lockdown decisions seem to have made major contributions to these states’ relatively deep downturns.

A similar conclusion seems justified from this list of the ten states that have permitted their economies to remain most open and imposed the fewest cubrs on behavior – with the least restrictive closest to the top:

Least restrictive on lockdowns                                1Q-3Q GDP rank

South Dakota                                                                     14

Idaho                                                                                   6

Utah                                                                                     1

Oklahoma                                                                         47

Iowa                                                                                    5

Wisconsin                                                                         11

Wyoming                                                                         49

Missouri                                                                           21

North Dakota                                                                   41

Arkansas                                                                            9

Seven of these ten lockdown-lightest states are in the top half of U.S. economic performers, four are in the top ten and one (Wisconsin) is Number 11. Moreover, the three conspicuous exceptions to this pattern – economically woeful Oklahoma, Wyoming, and North Dakota – are all, as previously pointed out, states that have suffered because they’re energy-heavy.

As a result, the way I see it, this table and at least two of the others of the four total presented here, along with yesterday’s state-level data, further strengthen the case that lockdowns per se have exacted major – though far from catastrophic –  economic prices. But by the same token, these results confront the nation with the question of far away the economic tipping point might be. 

Making News: Podcast On-Line of NYC Radio Appearance on Swalwell Media Cover Up…& More!

Tags

CCP Virus, China, coronavirus, COVID 19, Eric Swalwell, Frank Morano, Germany, journalism, lockdowns, Mainstream Media, Making News, shutdowns, spying, The New York Times, The Other Side of Midnight, Wuhan virus

I’m pleased to announce that the podcast is now on-line of my appearance in last night’s wee hours on Frank Morano’s “The Other Side of Midnight” talk show on New York City’s WABC-AM radio. Click here to listen to a timely discussion of two recent RealityChek items: the national media’s near news blackout (and possibly coverup?) of the Eric Swalwell China spy scandal story, and the increasingly US-like anti-CCP Virus performance of Germany — whose lockdowns-heavy strategy and early successes won such fulsome worldwide praise.

Special bonus for Baby Boomer native-New Yorkers-in-exile (like me!) — right at the beginning of the recording, you’ll hear the same “77 WABC” jingle you may remember from your childhood and adolescence.

And keep checking in with RealityChek for news of upcoming media appearances and other developments

Im-Politic: Germany’s Looking Like an Increasingly Tarnished Anti-CCP Virus Gold Standard

Tags

CCP Virus, coronavirus, COVID 19, Germany, Im-Politic, infections, lockdowns, mortality, reopening, shutdowns, stay-at-home, Worldometers.info, Wuhan virus

As the now-well-worn (but still pretty darned good!) wisecrack goes, “I’m old enough to remember when Germany was held up as a model for fighting the CCP Virus.” (See e.g., here and here.) And as this gibe implies, that portrayal of Germany keeps getting exposed as premature.

In fact, by several key grim virus metrics, Germany has caught up with the United States – which of course has just as often been held up as a model for how not to fight the pandemic.

For example, according to the Worldometers.info website, on a per capita basis, Germany’s daily death rate is now greater than the United States’. As of last Friday (I’m skipping the weekend numbers because CCP Virus-related info tends to get reported more slowly on Saturdays and Sundays), Germany’s new reported virus-related fatalities were 30 percent of America’s (838 vs 2,794). Yet Germany’s population (83.91 million) is only 25.28 percent of America’s (331.91 million).

Germany’s performance looks better in terms of seven-day average (7DA) daily figures – which are more accurate because they smooth out the inevitable random daily fluctuations. On December 18, the German figure of 598 was only 23.15 percent of its U.S. counterpart of 2,583.

But major German catch-up has still taken place. And it’s been going on for months. October 16 is when the American 7DA daily fatality total began its latest big move. That day’s figure was 716. So between then and December 18, it rose by 260.75 percent.

October 16 is just before Germany’s current death surge, and that day, the 7DA stood at 21. So through December 18, it’s risen by 2,748.62 percent. That’s more than ten times faster.

The new daily infections numbers tell a similar story. Let’s cut to the chase and examine the 7DAs. By this measure, the United States’ current and worst CCP Virus wave began about October 5, when the daily 7DA stood at 44,691. By December 18, it was up just under 400 percent.

Germany’s current wave (a true second wave) began about the same time, and on October 5, the 7DA for daily new infections stood at 2,292. As of December 18, the figure was 24,460 – a level just over 967 percent above October 5’s, and a rate of increase more than twice as fast as the United States.’

None of this means that Germany’s virus strategy has been a failure, and certainly doesn’t mean that America’s has been a success. In the first place, serious measurement problems continue to plague the infection and mortality data everywhere. (See, e.g., here.)

In the second place, it’s not cricket to compare any geographic regions’ CCP Virus strategies without taking major virus-related differences into account. In this case, it’s crucial to note that temperatures affect the virus’ spread, and that Germany got colder faster, at least between October and November, than the United States.  (For the U.S. data, see here. For the German data, see here.) Germany is also about seven times more densely populated than America, and its relatively crowded conditions alone clearly encourage virus spread. Moreover, it’s not as if Germany has locked down consistently since the CCP Virus’ arrival.

At the same time, the German-American differences in temperatures and temperature changes have hardly been enormous. (Further complicating the weather analysis – the United States’ enormous size also means enormous weather variance from region to region.) And the population density hasn’t changed during this year. So the gaps between these variables can’t possibly begin to explain why Germany’s current surge – albeit from much lower absolute starting levels – has been so much worse than the United States. But they’ve been the statistics used most often to judge virus strategies, so it seems fair to examine exactly what they’ve revealed lately.

Nor does it make sense to blame Germany’s relatively poor performance this fall and winter so far on its various reopenings. Unless you think shutting down an entire national economy for that many months consecutively, with no relief, is a viable approach to a pandemic.

Instead, it’s time to recognize, especially for lockdown and mask-wearing and other mass restrictions enthusiasts, that if – even before the pandemic is one year old – countries with mitigation approaches as far apart as those of Germany and the United States have been so widely labeled can see such completely unexpected infection and mortality results, the establishment conventional wisdom on sweeping behavioral curbs is weaker than advocates insist. And consequently, the best possible tradeoffs between CCP Virus spread and mortality effects on the one hand, and other public health and economic costs on the other, shouldn’t be regarded as set in stone.

Im-Politic: Trump-ism Without Trump for America as a Whole?

Tags

"Defund the Police", allies, CCP Virus, China, climate change, coronavirus, court packing, COVID 19, Democrats, election 2020, enforcement, Executive Orders, filibuster, Green New Deal, Huawei, human rights, Im-Politic, Immigration, Joe Biden, judiciary, lockdowns, mask mandate, masks, metals, multilateralism, Muslim ban, Phase One, progressives, Republicans, sanctions, Senate, shutdowns, stimulus, Supreme Court, tariffs, taxes, Trade, trade wars, Trump, unions, Wuhan virus

Since election day, I’ve spent some time and space here and on the air speculating about the future of what I called Trump-ism without Donald Trump in conservative and Republican Party political ranks. Just this weekend, my attention turned to another subject and possibility: Trump-ism without Mr. Trump more broadly speaking, as a shaper – and indeed a decisive shaper – of national public policy during a Joe Biden presidency. Maybe surprisingly, the chances look pretty good.

That is, it’s entirely possible that a Biden administration won’t be able to undo many of President Trump’s signature domestic and foreign policies, at least for years, and it even looks likely if the Senate remains Republican. Think about it issue-by-issue.

With the Senate in Republican hands, there’s simply no prospect at least during the first two Biden years for Democratic progressives’ proposals to pack the Supreme Court, to eliminate the Senate filibuster, or to recast the economy along the lines of the Green New Deal, or grant statehood Democratic strongholds Puerto Rico and the District of Columbia. A big tax increase on corporations and on the Biden definition of the super-rich looks off the table as well.

If the Senate does flip, the filibuster might be history. But big Democratic losses in the House, and the claims by many veterans of and newcomers to their caucus that those other progressive ambitions, along with Defunding the Police, were to blame, could also gut or greatly water down much of the rest of the far Left’s agenda, too.

CCP Virus policy could be substantially unchanged, too. For all the Biden talk of a national mask mandate, ordering one is almost surely beyond a President’s constitutional powers. Moreover, his pandemic advisors are making clear that, at least for the time being, a sweeping national economic lockdown isn’t what they have in mind. I suspect that some virus economic relief measures willl be signed into law sometime this spring or even earlier, but they won’t carry the total $2 trillion price tag on which Democratic House Speaker Nancy Pelosi seems to have insisted for months. In fact, I wouldn’t rule out the possibility of relief being provided a la carte, as Congressional Republicans have suggested – e.g., including popular provisions like some form of unemployment payment bonus extension and stimulus checks, and excluding less popular measures like stimulus aid for illegal aliens.

My strong sense is that Biden is itching to declare an end to President Trump’s trade wars, and as noted previously, here he could well find common cause with the many Senate Republicans from the party’s establishment wing who have never been comfortable bucking the wishes of an Offshoring Lobby whose campaign contributions it’s long raked in.

Yet the former Vice President has promised his labor union supporters that until the trade problems caused by China’s massive steel overproduction were (somehow) solved, he wouldn’t lift the Trump metals tariffs on allies (which help prevent transshipment and block these third countries from exporting their own China steel trade problems to the United States) – even though they’re the levies that have drawn the most fire from foreign policy globalists and other trade and globalization zealots.

As for the China tariffs themselves, the latest from the Biden team is that they’ll be reviewed. So even though he’s slammed them as wildly counterproductive, they’re obviously not going anywhere soon. (See here for the specifics.) 

Later? Biden’s going to be hard-pressed to lift the levies unless one or both of the following developments take place: first, the allied support he’s touted as the key to combating Beijing’s trade and other economic abuses actually materializes in very convincing ways; second, the Biden administration receives major Chinese concessions in return. Since even if such concessions (e.g., China’s agreement to eliminate or scale back various mercantile practices) were enforceable (they won’t be unless Biden follows the Trump Phase One deal’s approach), they’ll surely require lengthy negotiations. Ditto for Trump administration sanctions on China tech entities like the telecommunications giant Huawei. So expect the Trump-ian China status quo to long outlast Mr. Trump.

Two scenarios that could see at least some of the tariffs or tech sanctions lifted? First, the Chinese make some promises to improve their climate change policies that will be completely phony, but will appeal greatly to the Green New Deal-pushing progressives who will wield much more power if the Senate changes hands, and who have demonstrated virtually no interest in China economic issues. Second, Beijing pledges to ease up on its human rights crackdowns on Hong Kong and the Muslims of Xinjiang province. These promises would be easier to monitor and enforce, but the Chinese regime views such issues as utterly non-negotiable because they’re matters of sovereignty. So China’s repressive practices won’t even be on the official agenda of any talks. Unofficial understandings might be reached under which Beijing would take modest positive steps or suspend further contemplated repression. But I wouldn’t count on such an outcome.

Two areas where Biden supposedly could make big decisions unilaterally whatever happens in the Senate, are immigration and climate change. Executive orders would be the tools, and apparently that’s indeed the game plan. But as Mr. Trump discovered, what Executive Orders and even more routine adminstrative actions can do, a single federal judge responding to a special interest group’s request can delay for months. And these judicial decisions can interfere with presidential authority even on subjects that for decades has been recognized as wide-ranging – notably making immigration enforcement decisions when border crossings impact national security, as with the so-called Trump “Muslim ban.”

I know much less about climate change, but a recently retired attorney friend with long experience litigating on these issues told me that even before Trump appointee Amy Coney Barrett joined the Supreme Court, the Justices collectively looked askance on efforts to create new policy initiatives without legislating. Another “originalist” on the Court should leave even less scope for ignoring Congress.

The bottom line is especially curious given the almost universal expectations that this presidential election would be the most important in recent U.S. history: A deeply divided electorate could well have produced a mandate for more of the same – at least until the 2022 midterms.

Im-Politic: Is the U.S. Really a CCP Virus Outlier?

Tags

CCP Virus, coronavirus, COVID 19, lockdowns, shutdowns, therapeutics, Trump, vaccines, Worldometers.info, Wuhan virus

It seems pretty clear that President Trump is in serious danger of losing Election 2020 in part because of his handling of the CCP Virus. Much less clear, especially as a second virus wave washes over not only the United States much of the rest of the world, is whether, as frequently charged , Mr. Trump’s record has been such an outlier. And if this allegation is still clear to you, consider the following data showing the rising numbers of infections in the world’s major high-income economies.

The period covered is, with the exception of France, October 2 (around the time when increases began significantly increasing) to yesterday (November 9). The numbers come from the well regarded Worldometers.info website:

United States: 140.20 percent

France: (Oct. 3): 18.75 percent

Spain: 74.62 percent

United Kingdom: 81.64 percent

Italy: 911.33 percent

Germany: 481.19 percent

Netherlands: 22.35 percent

Canada: 117.61 percent

Sweden: 380.20 percent

Japan: 53.07 percent

It’s important to note that these percentages could well change dramatically on very short notice – because some have already changed dramatically in the last few days. For example, through November 7, France’s increase was 411.74 percent. Through October 30, the Netherlands’ was 190.69 percent.

But it’s even more important to note that, especially taking these recent and potential fluctuations into account, America’s results are in the middle of the pack – and even closer to the lower end.

Although any evaluation of these statistics also needs to recognize that major, virus-relevant differences separate these countries (e.g., population density, climate, various demographics), they’re also separated, as widely noted, by substantially different approaches to CCP Virus mitigation. (Regarding population density in particular, that’s why I’m not mentioning very small, crowded European countries like Belgium and Switzerland and Luxembourg. In fact, I almost left out the Netherlands for this very reason.)

And in this vein, it’s more than a little interesting with worst recent records than the United States are Germany and Italy – where lockdowns of their economies and societies have been much more prompt and complete than in the United States.

This leaves the continuing major knock on the Trump record the exceptionally big absolute numbers of virus infections in the United States (including on a per capita basis) compared with those of peer economies and societies. It’s a big knock. But unless you think that large countries can or should be shut down until whatever public health goal their governments happen to set at a given time (bending the curve? slowing the spread? “crushing the virus”?), it shouldn’t be difficult to recognize that the appearance of a second wave immediately following the first reopenings in heavily locked down countries shows that putting the clamps on at best kept the virus temporarily dormant.

One possible conclusion to which these common problems being faced by such a diverse group of countries is one that the American character seems especially resistant to — that not all problems are readily solvable, or solvable at all, or even easily mitigated (at least until science figures out how to produce safe and effective vaccines and cures much faster). And if many of President Trump’s critics can be faulted for such assumption, he’s guilty of similar pollyannism due to his numerous claims that the virus is “under control” – even though nothing about its spread through Europe, in any case, indicated that enduring progress like this was possible at these stages.

That’s not to say that Americans shouldn’t prize their can-do spirit, or that governments are helpless in the face of such disasters – especially since, as far as is known, this disaster wasn’t government- or man-made. And it certainly doesn’t mean that better performance (in addition to better messaging) shouldn’t be expected and demanded. But it does point to the need to scale back expectations and demands, specifically to the realm of the doable, of tradeoffs and genuinely tragic choices, and of the priority-setting that naturally follows.

There’s no guarantee that national leaders will be rewarded for this kind of sober realism. But if this latest U.S. presidential election is any indication, there’s no guarantee that peddling overly rosy scenarios pays off with voters, either.

Following Up: Nursing Home Deaths Still Dominating U.S. CCP Virus Fatalities

Tags

assisted living facilities, CCP Virus, CDC, Centers for Disease Control and Prevention, coronavirus, COVID 19, Following Up, Foundation for Research on Equal Opportunity, Kaiser Family Foundation, lockdowns, nursing homes, shutdowns, The New York Times, Worldometer.com, Wuhan virus

Given the recent U.S. surge in reported CCP Virus infections (but not yet U.S. deaths, according to sources such as the Worldometers.com website), I thought it was time to take another look at the nursing homes dimension of the pandemic. Depressingly, most of the evidence signals that it’s still at least as central to America’s virus fatality story.

RealityChek‘s last update, from mid-August, found that, since the pandemic’s early stages, the share of CCP Virus deaths linked with these facilities had more than doubled – to at least 41 percent. The phrase “at least” matters a lot because U.S. states’ reporting of these losses is far from uniform.

The New York Times, which had been doing an admirable job of tracking the scattered statistics that are available, hasn’t focused on the issue since then, but several others have stepped into the breach and some suggest that the problem has worsened.

In early September, the non-partisan Kaiser Family Foundation reported that “People in long-term care facilities make up 8 percent of coronavirus cases, but 45 percent of all COVID-19 deaths.” And worrisomely, Kaiser found signs, as of August, of an uptick.

Moreover, in a second September report, Kaiser examined another set of institutions in which senior citizens are heavily concentrated – assisted living facilities. It concluded that, despite data even less complete than for nursing homes, CCP Virus deaths were strongly increasing among residents and staff alike between June and August.

Similar figures were published in late August by the Foundation for Research on Equal Opportunity, a think tank that bills itself as non-partisan but that looks like of right-of-center-ish to me. (“Not that there’s anything wrong with that.”). Actually, the organization published three sets of figures, each using a different methodology and each covering both nursing homes and assisted living facilities. The low end number pegged virus deaths associated with both at 42.1 percent, the middle at 42.7 percent, and the high end estimate was 46.9 percent.

What says the U.S. government, you might ask? Nothing terribly helpful. The Centers for Disease Control and Prevention (CDC) does try to monitor the situation, and its data are more recent than those of the other two outfits – bringing the story up to October 18. But it only includes information from the relatively small number of states that voluntarily send in their numbers. That is, there’s no reporting requirement. The two private sector organizations discussed above use other sources, like press accounts – which are admittedly not definitive.

If you do look up these numbers, however, you’ll find that the agency pegs the nursing home death toll at 61,765 as of October 18. But you’ll also find that no overall U.S. death total is provided for that date.

The Worldometers site’s number for the day is 224,792. Do the math, and nursing home deaths as a share of total deaths comes to 27.47 percent. Yet not only is the result missing many states’ fatalities. It doesn’t include assisted living facilities, either.

I’ve argued in my previous posts that the high share of total U.S. virus-connected deaths is argues strongly for concentrating prevention and mitigation efforts on such unusually vulnerable populations, rather than the economy or the society as a whole. As new infections climb once more, and talk of major lockdown increase just as quickly, this still sounds like the strategy to choose.