Week-end Wrap – Political Economy – March 29, 2020

Week-end Wrap – Political Economy – March 29, 2020
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

The Pandemic

The Doctor Who Helped Defeat Smallpox Explains What’s Coming
[Wired, via The Big Picture 3-24-20]

Flatten the Curve

By slowing it down or flattening it, we're not going to decrease the total number of cases, we're going to postpone many cases, until we get a vaccine—which we will, because there's nothing in the virology that makes me frightened that we won’t get a vaccine in 12 to 18 months. Eventually, we will get to the epidemiologist gold ring.

What’s that?

That means, A, a large enough quantity of us have caught the disease and become immune. And B, we have a vaccine. The combination of A plus B is enough to create -herd immunity, which is around 70 or 80 percent....

How will we know when we’re through this?

The world is not going to begin to look normal until three things have happened. One, we figure out whether the distribution of this virus looks like an iceberg, which is one-seventh above the water, or a pyramid, where we see everything. If we're only seeing right now one-seventh of the actual disease because we're not testing enough, and we're just blind to it, then we're in a world of hurt. Two, we have a treatment that works, a vaccine or antiviral. And three, maybe most important, we begin to see large numbers of people—in particular nurses, home health care providers, doctors, policemen, firemen, and teachers who have had the disease—are immune, and we have tested them to know that they are not infectious any longer. And we have a system that identifies them, either a concert wristband or a card with their photograph and some kind of a stamp on it. Then we can be comfortable sending our children back to school, because we know the teacher is not infectious.

And instead of saying "No, you can't visit anybody in nursing home," we have a group of people who are certified that they work with elderly and vulnerable people, and nurses who can go back into the hospitals and dentists who can open your mouth and look in your mouth and not be giving you the virus. When those three things happen, that's when normalcy will return.

Total Cost of Her COVID-19 Treatment: $34,927.43

[Time, via Naked Capitalism Water Cooler 3-23-20]

And this isn't even actually treatment for COVID19, because she was sent home before the test results came back positive. 

Israeli doctor in Italy: We no longer help those over 60

[Jerusalem Post, via Naked Capitalism 3-23-20]

Week-end Wrap – Political Economy – March 22, 2020

Week-end Wrap – Political Economy – March 22, 2020
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

The Financial Collapse 

The Fed Backfires: Shock and Awe Rate Drop to 0%, Emergency Bond Buying Program Leads to Limit Down Drops in US Equity Futures as Real World Coronavirus Damage Worsens
[Naked Capitalism 3-16-20]

Reserve Requirements
[Federal Reserve, Naked Capitalism 3-19-20]

[Twitter below via Naked Capitalism Water Cooler 3-17-20]

'Weird Alex' Pareene@pareene

I can't believe I'm entering the second global financial meltdown of my adult life and more or less the same people are still in charge of everything

103K

9:51 AM - Mar 16, 2020

Fed Announces Program for Wall Street Banks to Pledge Plunging Stocks to Get Trillions in Loans at ¼ Percent Interest
Pam Martens and Russ Martens: March 18, 2020 [Wall Street On Parade]

Veterans on Wall Street think of it as the cash-for-trash facility, where Wall Street’s toxic waste from a decade of irresponsible trading and lending, will be purged from the balance sheets of the Wall Street firms and handed over to the balance sheet of the Federal Reserve – just as it was during the last financial crisis on Wall Street.

Capitalism in the time of COVID

Green Jobs Are the Answer to the Coronavirus Recession

[New Republic, Naked Capitalism 3-19-20]
Franklin Roosevelt used the Public Works Administration, Civilian Conservation Corps and Works Progress Administration, so that the federal government directly hired millions of people to give them a steady paycheck. Today, the federal government should be hiring millions of people and begin teaching them how to care for people that are ill with COVID19, or how to manufacture medical equipment, or how to operate emergency food distribution.

Why is there no discussion of the federal government building new emergency hospitals, or building new manufacturing plants to make ventilators, face masks, and other medical equipment? Why is there no discussion of the federal government seizing control of any drug company or medical device manufacturer or producer or seller of handiwipes that tries to take advantage of this crisis to price gouge? Because people have been indoctrinated with the idea that such a direct government role in the economy is bad. What we’re about to find out is, that idea is what’s bad. Another example of how our unquestioned economic ideology limits our options. 

Week-end Wrap – Political Economy – March 15, 2020

Week-end Wrap – Political Economy – March 15, 2020
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Health Crises

The comprehensive Ars Technica guide to the coronavirus
[Ars Technica, via Naked Capitalism 3-13-20]

WORTH REPEATING: In 2018, Trump fired the entire US pandemic response team. [Twitter, via Naked Capitalism Water Cooler 3-12-20]

These were the experts with decades of experience dealing with precisely the kind of situation we are in today. Trump did not replace them. He eliminated the positions.

Snopes: TRUE - The Trump administration fired the U.S. pandemic response team in 2018 to cut costs.
[Snopes]

Rear Adm. Timothy Ziemer abruptly departed from his post leading the global health security team on the National Security Council in May 2018 amid a reorganization of the council by then-National Security Advisor John Bolton, and Ziemer’s team was disbanded. Tom Bossert, whom the Washington Post reported “had called for a comprehensive biodefense strategy against pandemics and biological attacks,” had been fired one month prior.

It’s thus true that the Trump administration axed the executive branch team responsible for coordinating a response to a pandemic and did not replace it, eliminating Ziemer’s position and reassigning others, although Bolton was the executive at the top of the National Security Council chain of command at the time.

Coronavirus Shows Us America Is Broken 

[New York Magazine, via Naked Capitalism 3-13-20] 

What we are seeing right now is the collapse of civic authority and public trust at what is only the beginning of a protracted crisis. In the face of an onrushing pandemic, the United States has exhibited a near-total evacuation of responsibility and political leadership — a sociopathic disinterest in performing the basic function of government, which is to protect its citizens. 

Things will get worse from here. According to a survey of epidemiologists released yesterday, the coronavirus outbreak probably won’t peak before May.... 

Trump is, of course, the last man in the world you would want in charge right now. In an extremely illuminating interview with Gabriel Debenedetti published this morning, Obama’s Ebola czar Ron Klain described his response to that threat, which he suggested was a relatively good model for how the U.S. might have responded to this one. That response began with 10,000 public-health workers sent to fight and investigate the disease. This administration has sent none, which means it has been, practically speaking, flying blind about the nature of the coronavirus and the challenges it represents to public-health systems. In fact, it’s worse than that; for all intents and purposes, the administration hasn’t been flying at all, spending the last three months sitting by entirely idle and indifferent, rather than scaling up testing regimes, issuing protocols, and preparing for a major surge of patients by developing contingency plans to expand hospital capacity around the country wherever it became needed.

Week-end Wrap – Political Economy – March 8, 2020

Week-end Wrap – Political Economy – March 8, 2020
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

Lessons for the Green New Deal from the Economic Mobilization for World War Two (PDF deck) [Josh Mason, via Naked Capitalism 3-2-20]

(Based on forthcoming Roosevelt Institute paper coauthored with Andrew Bossie)

Why so much direct public investment?

• Private sector unwilling/unable to bear risk, especially in newer industries

Lessons for Green New Deal

1. Decarbonization may call for large direct investment by public sector as opposed to shifting private investment via prices/subsidies

1. Public role largest in new industries/technologies

1. Public role not just to provide resources, but to solve coordination problems and to bear risk

Third lesson: Full employment is powerful force for redistribution

• 1940s saw the largest compression of incomes in US history as in most advanced countries

• Lowest paid groups (African Americans, agricultural workers) gained most

• Very little direct redistribution - all about labor market

Summary - Three lessons from wartime mobilization:

1. Rapid economic transitions require larger role for direct public investment

1. Output, employment are more elastic than conventional estimates of potential assume

1. Full employment is powerful force for income compression, even without explicit redistribution

Week-end Wrap – Political Economy – March 1, 2020

Week-end Wrap – Political Economy – March 1, 2020
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

Chile's Struggle to Democratize the State
[NACLA, via Naked Capitalism 2-25-20]
A useful overview of the neoliberal policies enacted by the Pinochet regime three decades ago -- protesters chant, “It’s not 30 pesos, it’s 30 years!” referring to the transit fare hike that sparked the social uprising in October 2019 and the 30 years of enforced neoliberal economic devolution. Neoliberal policies were written in Pinochet's constitution, which is why Chileans are demanding a new constitution. 

General Augusto Pinochet’s 1980 Constitution both symbolizes and imposes the authoritarian model at the root of the ongoing mobilization. The Constitution institutionalized the economic and political domination of the dictatorship and enshrined a neoliberal framework that erased the role of the state in social and economic areas. It restricted political participation, gave the Right disproportionate power, and installed a tutelary role for the armed forces.... 

Pinochet’s radical neoliberal transformation privatized the pension system and promoted the development of a private sector in the health and education fields. These privatizations have perpetuated inequality and reinforced extreme social divisions. Moreover, Chile is the only country in the world with almost completely privatized water—Chapter III, Clause 24 of the 1980 Constitution establishes the “right” to private ownership of water. 

....A 2019 study by The Lancet showed that a woman in a poor district of Santiago lives some 18 years less than a woman in a rich neighborhood in the same city.

.... popular symbols have changed. In large demonstrations in the past, people carried the banners of their political parties or social organizations. Such banners are gone in the protests today, reflecting the spontaneous nature of the social explosion and its distance from the political parties.

[I can see these types of protests erupting in USA, as people give up hope that either the Republican Party - taken over by grifter Trump who lied about his intention to implement populist policies - and the Democratic Party, which is fighting desperately to prevent populist policies from being carried into office by Sanders or Warren.]

Some 70 to 80 percent are in favor of a new Constitution—forged under democracy—to guarantee social rights. Chileans now look forward to the national plebiscite called for April 26 to vote for a path toward a Constitution that will protect the rights to education, health, and decent pensions, among others.

View of the protest of an estimated 1.2 million people in Santiago, October 25, 2019. (Hugo Morales/Wikimedia)