Thursday, January 14, 2021

Economy Has Room to Expand

Financial FAQs

Calculated Risk

The latest Job Openings and Labor Turnover Survey (JOLTS) report showed that small businesses are hurting the most during this pandemic with even outdoor dining banned in some regions, such as Southern California, while new hires and job openings were basically unchanged in November.

The number of job openings was little changed at 6.5 million on the last business day of November, the U.S. Bureau of Labor Statistics reported today. Hires were little changed at 6.0 million (deep blue line on graph) while total separations increased to 5.4 million. Within separations, the quits rate (yellow line) was unchanged at 2.2 percent while the layoffs and discharges rate (red bar) increased to 1.4 percent.

It looks like most businesses are holding their breath over future plans until there is more certainty about COVID-19 outcomes. But even more will depend on what kind of legislation a Democratic congress will pass—including a higher minimum wage, expanding Obamacare with a public option, and a national reconstruction program that will begin to upgrade our badly obsolescent infrastructure and create millions of good-paying jobs.

Details include the fact that layoffs increased 295,000 to nearly 2.0 million in November. Hiring rose 67,000 to 5.979 million. The hiring rate was steady at 4.2 percent. A separate report showed a sharp decline in confidence among small businesses in December.  Hires increased in professional and business services (+175,000) and mining and logging (+13,000). Hires decreased in accommodation and food services (-73,000), other services (-67,000), and information (-43,000). The number of hires was little changed in all four regions as we said.


What is still missing from this picture? Apple mobility tracks the number of Google map requests, with is a proxy for frequency of travel (except for regular commuters). It confirms people are traveling approximately 50 percent less, another so-called high frequency indicator of economic trends, which is why entertainment, leisure and hospitality jobs have declined as indicated in the most recent unemployment report.

Also, the NFIB Small Business Optimism Index declined 5.5 points in December to 95.9, falling below the average Index value since 1973 of 98. Nine of the 10 Index components declined and only one improved. Owners expecting better business conditions over the next six months declined 24 points to a net negative 16 percent, said the press release.

“This month’s drop in small business optimism is historically very large, and most of the decline was due to the outlook of sales and business conditions in 2021,” said NFIB Chief Economist Bill Dunkelberg. “Small businesses are concerned about potential new economic policy in the new administration and the increased spread of COVID-19 that is causing renewed government-mandated business closures across the nation.”

The beige-book report, prepared by the Federal Reserve on information collected by regional Fed banks on or before Jan. 4, showed modestly higher growth in most parts of the country but found that two districts reported no change in activity (St. Louis and Kansas City) while two noted a decline (New York and Philadelphia).

So there is no inherent reason business and consumer confidence might return to pre-pandemic levels once the vaccinations begin to reach the general population. Most economists predict a rebound by the beginning of fall when schools are scheduled to fully open again.  But it also means more national job-creating programs must be enacted by a Democratic administration that wants government to work for all Americans.

 Harlan Green © 2020

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Tuesday, January 12, 2021

Job Losses Mount From COVID-19

 Popular Economics Weekly


Total nonfarm payroll employment declined by 140,000 in December, and the unemployment rate was unchanged at 6.7 percent, the U.S. Bureau of Labor Statistics reported today.

“The decline in payroll employment reflects the recent increase in coronavirus (COVID-19) cases and efforts to contain the pandemic. In December, job losses in leisure and hospitality and in private education were partially offset by gains in professional and business services, retail trade, and construction.”

The U.S. economy shed jobs for the first time in eight months in December, suggesting a significant loss of momentum that could temporarily disrupt the recovery from the pandemic. The economy has recovered 12.4 million of the 22.2 million jobs lost during the pandemic. Employment at bars and restaurants tumbled 372,000, accounting for three quarters of the drop.

And now the pandemic’s toll is 4,000 deaths  per day which shows that without central planning to slow its spread the toll will only get worse. It is one more example of why government must be part of the solution to today’s problems, especially in protecting Americans’ health.


I believe the coronavirus pandemic is a major reason why this shift to more effective government is coming with the January 20 change of administrations, as even the vaccination rollout has lacked coordination that only the federal government can provide the states in charge of disbursing the vaccinations.

Operation “Warp Speed” is not reaching recipients-especially essential workers and the elderly—at anything approaching a warp speed.

The US does lead countries in providing COVID vaccinations as of January 7 with 5.92 million doses administered and China is second with 4.5 million doses as of Dec. 31, according to the World Data, a worldwide data collecting service. But this is a far cry from the HHS and the CDC prediction that 20 million doses should have been administered by Dec. 31.

According to Steven Rattner, a former Treasury official interviewed on MSBNC’s Morning Joe, Trump is the first president to have lost more jobs than he gained during his term since Herbert Hoover at the beginning of the Great Depression.

And businesses will remain shuttered and a majority of consumers continue to stay home until the pandemic has been brought under control.  Any guesses on when that will happen? 

Harlan Green © 2020

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Tuesday, January 5, 2021

Deaths of Despair, Part II—The Wall of Ignorance

 Answering the Kennedys’ Call

Something can be done about the “Deaths of Despair” among the non-college educated white males that Anne Case and Angus Deaton have been writing about that I discussed in Deaths of Despair, Part I, and has been exacerbated by the current COVID-induced recession.

But first we must counteract the wall of ignorance that has blocked efforts to ameliorate their suffering to date, a wall that was built on the denial of scientific studies from epidemiologists and the Trump administration’s own experts at the CDC and other NIH entities.

The Trump administration is responsible for the misinformation campaign that has denied the efficacy of mask-wearing and testing to control the pandemic, for starters. And, harsh as it may sound, the Republican Party is largely responsible for the dumbing down of its electorate with its continual denial of basic scientific knowledge that confirms even the most basic scientific facts, such as for global warming and even evolution.

The coronavirus pandemic is wreaking havoc among the less-educated Americans, according to Case and Deaton, who wrote about the growing divide between those with a four-year college degree and those without in their recent book, Deaths of Despair and the Future of Capitalism.

“The rise in deaths that we describe is concentrated almost entirely among those without a bachelor’s degree, a qualification that also tends to divide people in terms of employment, remuneration, morbidity, marriage, and social esteem – all keys to a good life,’ said Case and Deaton.”

The economic disparities are growing due to the pandemic. In April, nearly 12 million low-wage workers were laid off, while some 6 million workers who were earning between $18 to $29 an hour were laid off. By November, all but 400,000 of those workers earning $18 to $29 an hour had returned to work, Raj Chetty, a Harvard economics professor, has said. Meanwhile, some 6 million workers who earned less than $13 an hour have yet to return to work.

The pandemic and recession were associated with a 10 percent to 60 percent increase in deaths of despair above already high pre-pandemic levels, according to a working paper by Casey Mulligan, professor of economics at the University of Chicago. He found these non-COVID excess deaths are disproportionately experienced by men aged 15-55, per the above NBER graph.

“Mortality in 2020 significantly exceeds what would have occurred if official COVID deaths were combined with a normal number of deaths from other causes,” he wrote. “The demographic and time patterns of the non-COVID excess deaths (NCEDs) point to deaths of despair rather than an undercount of COVID deaths. The flow of NCEDs increased steadily from March to June and then plateaued. They were disproportionately experienced by working aged men, including men as young as aged 15 to 24.”

Because drug epidemics tend to follow major episodes of “social upheaval and destruction”, we can expect more of the same economic disparities and consequent social unrest that has followed, unless something is done.

And that requires a major educational effort to bolster K-12 public education institutions that have been purposely downplayed by Trump’s own Department of Education, in favor of private, for-profit learning, even transferring funds earmarked for public education to for-profit programs.

The high wall of ignorance that has built up over more than a decade of denial of scientific knowledge by one political party is a wall that needs to be torn down to even begin to mitigate the social unrest among those suffering from Deaths of Despair and rebuild their faith in democratic processes.

Harlan Green © 2020

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Monday, January 4, 2021

The Rising Deaths of Despair Amid COVID-19

 Financial FAQs


Evidence is beginning to mount that the Trump administration's half-hearted response to the COVID-19 pandemic was intentional. And we are seeing the results in mounting suicide and drug abuse rates among the populace most affected—the lesser educated—according to Princeton Professors Anne Case and Angus Deaton--Deaton won the 2015 Nobel Prize in Economics

President Trump confessed to Bob Woodward in February that he knew the COVID-19 virus was much more deadly than the flu, even though he many times publicly asserted the opposite.

On March 13, Trump rolled out what was supposed to be a nationwide set of drive-thru testing facilities sited at thousands of “big box” retailers and backed by a website created by “7,000 engineers from Google.”

But Trump did not follow the announcement with an actual system of either testing or case tracing. The website that he cited did not exist. And the testing facilities themselves never went past a handful of poorly supplied locations mismanaged by Jared Kushner and his college buddies.

It was an intentional decision made by Trump and his White House staff to allow COVID-19 to ravage the country because he believed it would be to his political advantage.

Professor Timothy Snyder, author of the best-selling On Tyranny asserted in a recent Christine Amanpour interview that the policy of herd immunity was also a political decision. Trump was hoping that more voters in the blue states with minorities and where infection rates were highest at the time would be incapacitated.

The result of these policies of inaction backfired, as we now know. The red states and rural regions where the less educated live and that are the mainstay of his supporters became as infected.

Anne Case and Angus Deaton have confirmed these results in a Project-Syndicate article. The coronavirus pandemic is wreaking havoc among the less-educated Americans, according to Case and Deaton, who wrote about the growing divide between those with a four-year college degree and those without in their recent book, Deaths of Despair and the Future of Capitalism.

“The rise in deaths that we describe is concentrated almost entirely among those without a bachelor’s degree, a qualification that also tends to divide people in terms of employment, remuneration, morbidity, marriage, and social esteem – all keys to a good life,’ said Case and Deaton.

Even with the beginning of vaccinations, the two-thirds of Americans in service-oriented jobs in leisure and hospitality, entertainment, travel and transportation will still see a worsening situation, whereas white-collar gig workers that can work online won’t be as affected.

Even in the future when vaccinations will reduce the infection and death rates, “The same cannot be said for deaths of despair (suicide, accidental drug overdose, and alcoholic live disease), of which there were 164,000 in 2019, compared with the past “normal” US level of roughly 60,000 per year (based on data from the 1980s and early 1990s),” write Case and Deaton.


It is the less-educated workers that will be most affected with our inadequate employer-based, exorbitantly expensive health care system that only works for those with a job. And because drug epidemics tend to follow major episodes of “social upheaval and destruction”, say Case and Deaton, we can expect more of the same economic disparities and consequent social unrest in the future, unless something is done about it.

Through November 2020, the economy lost 9.37 million jobs, writes Calculated Risk.   By April 2020, the economy had lost 21.7 million jobs, and then added back 12.33 million jobs by November.  But job growth has slowed over the last few months, even as stocks have soared. 

Let us therefore hope that we set up adequate job growth, education and social welfare programs that address and bring down the horrific deaths of despair totals, so that we do not see a resurgence of political opportunism evinced by Trump and the Republican Party that has cost so many lives and livelihoods.

Harlan Green © 2021

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Thursday, December 31, 2020

What Happened To Our Leaders?

 Answering the Kennedys’ Call


President-Elect Biden is 78 years old, and will be the oldest President in our history when he is sworn in. He continues to uphold the recent age levels of POTUS set by Donald Trump (74), Presidents Eisenhower, Reagan and GHW Bush that were all over 70 by the time they left office.

The NY Times Ian Philbrick reports that we have the oldest leaders in the western developed countries at a time when the age of elected leaders in other developed countries is falling.

“Since 1950, the average age of heads of government in the three dozen member countries of the Organization for Economic Cooperation and Development has steadily declined, from above 60 years old to around 54 today. The average O.E.C.D. national leader is now two decades younger than Mr. Trump — and almost a quarter century younger than Mr. Biden.”

Why does that matter? I believe it is a major reason for the slow slide into populism and the dysfunctional democracy we currently endure without the increased social and economic benefits enjoyed by citizens of other western developed countries with younger and more forward-looking leaders.

The slide into a federal government led by President Donald Trump that is barely able to function has resulted in our inability to manage the new coronavirus pandemic that is infecting and killing a record number of Americans.

We seem to crave the appearance of strong leadership even if he or she eschews the main requirement of leadership, namely the necessity to keep our 50 different states plus territories, each with its own system of governance, safe and united in common purpose,.

“On a national level, many of us have been seduced by “shiny new objects” – what I call “leadership bling, says Nancy Koehn, a historian at Harvard Business School and the author of the 2017 book, “Forged in Crisis: The Power of Courageous Leadership in Turbulent Times.”Too often, we’re dazzled by personal ambition, reasoning that a person who was born hard-charging and who followed his or her self-interest all the way to enormous wealth, celebrity, or authority has to have accumulated great wisdom.”

The Trump administration’s one legislative accomplishment was the 2017 Tax Cut and Jobs Act that resulted in the first $1 trillion annual budget deficit in our history, while Republicans failed in more than 80 attempts to repeal Obamacare.

Our federal government has become out of touch with younger generations in particular that are almost unanimous in wanting better schools, universal health care, a higher minimum wage, and other benefits now enjoyed by all other developed countries.

A Pew Research Center survey conducted in January of this year found that about a quarter of registered voters ages 18 to 23 (22 percent) approved of how Donald Trump is handling his job as president, while about three-quarters disapproved (77 percent). Millennial voters were only slightly more likely to approve of Trump (32 percent) while 42 percent of Gen X voters, 48 percent of Baby Boomers and 57 percent of those in the Silent Generation approved of the job he is doing as president.

The Times also points out that the average age of Congress has also trended upward for decades. Nancy Pelosi, the House speaker, is 80; Mitch McConnell, the Senate majority leader, is 78. The Supreme Court’s nine justices average above 67. Mr. Trump’s cabinet averages over 60, among the oldest in the O.E.C.D.

Even younger Republicans follow Democrats in wanting more benefits in the PEW survey. Gen Z Republicans, for instance, are much more likely than older generations of Republicans to desire an increased government role in solving problems, says PEW.

“About half (52%) of Republican Gen Zers say government should do more, compared with 38% of Millennials, 29% of Gen Xers and even smaller shares among older generations. And the youngest Republicans are less likely than their older counterparts to attribute the earth’s warming temperatures to natural patterns, as opposed to human activity (18% of Gen Z Republicans say this, compared with three-in-ten or more among older generations of Republicans).”

Looked at in economic terms, our slide into extreme conservatism instituted by Ronald Reagan and the Republican Party with their credo of lower taxes and an unregulated, free market capitalist ideology, is the reason we have a federal government out of touch with most Americans.

Whereas our European cousins enjoy universal health care, higher minimum wages, and shorter work weeks for the same pay; all brought about by keeping their governments young and able to adapt to even a COVID-19 pandemic.

So where are the leaders to come that will bring in programs and policies that will govern for future generations, rather than cater to the populace of the past?

Harlan Green © 2020

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Monday, December 21, 2020

Recovery Slows As Pandemic Spreads

 Financial FAQs

This Chicago Federal Reserve graph of national activity starkly portrays the present state of the US economy. The multi-colored bars represent deviations from the historical growth average, which is the zero line on graph. It is still barely positive though down sharply from May and June when the business lockdown ended.

“Led by slower growth in employment- and production-related indicators, the Chicago Fed National Activity Index (CFNAI) declined to +0.27 in November from +1.01 in October. Three of the four broad categories of indicators used to construct the index (production and income, employment, sales and inventories) made positive contributions in November, while personal consumption and housing declined slightly, but all four categories decreased from October. The index’s three-month moving average, CFNAI-MA3, decreased to +0.56 in November from +0.85 in October.”


This is because successive surges in infections have had consumers saving more and spending less, while manufacturing continues to chug along. The pandemic is just not manageable at the current infections rate with more than 200,000 per day (blue line in graph) now testing positive and more than 100,000 per day (red line) being hospitalized with the virus.

It is easy to see the inverse correlation in these graphs. As total infections in cases per day rise (blue line) economic activity in the Chicago Fed bar graph declines.

There is better news coming as more than 144,000 vaccinations have already been administered in 21 states, according to the COVID Tracking Project.

MarketWatch reports that new daily cases of COVID-19 fell to 179,801 on Sunday from 193,947 on Saturday, and down from 251,447 on Friday, according to data provided by the New York Times. The daily death toll was 1,422 on Sunday, down from 2,628 on Saturday and from 2,815 on Friday.

And hospitalizations dropped to 113,630 on Sunday from 113,929 on Saturday and 113,955 on Friday, according to the COVID Tracking Project. That 3-day streak of declines snapped a 12-day streak of record hospitalizations.

But the Christmas holidays have just begun with many more traveling to family and vacation destinations, which will cause another surge in the new year and keep most consumers at home for a longer period.

In looking back at the history of the Spanish flu, there was another infection surge in the spring of 1919, even as the warm weather returned. It actually took several more years for that economy to stutter back to life.

And it will in fact take much more federal aid than the just passed $900 billion coronavirus relief package to bring back any meaningful recovery for most Americans because so many lost jobs; something the incoming Biden administration will have to tackle.

Harlan Green © 2020

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Thursday, December 17, 2020

What Civil War?

Answering the Kennedys’ Call


Texas, 17 other red state Attorneys General, and 126 Republican House members tried to keep President Trump in power after January 20 by breaking election laws and ignoring the United States Constitution. But the Supreme Court, arbiter of the Constitution, said they had no basis to sue four Democratic states after the election had been decided.

This has led Texas’ GOP Party Chair Alan West to suggest that these states should secede from the United States (which was quickly disavowed by other state GOP leaders).

West and Texas Republicans were in fact still fighting their own version of the 1860s civil war that abolished slavery in suing to overturn the will of a majority of Americans. President-Elect Biden was certified by the Electoral College as our new POTUS and Kamala Harris as our new Vice-President Elect on December 7.

Turning the Supreme Court’s decision on its head, West said, "This decision establishes a precedent that says states can violate the US constitution and not be held accountable," in a statement following SCOTUS’s Friday-night ruling. "Perhaps law-abiding states should bond together and form a Union of states that will abide by the constitution.”

Ben Schatz, the Democratic senator for Hawaii, said Mr West’s statement revealed that the Texas Republican Party had lost its mind, in a post to Twitter.

“The Texas Republican Party is officially in favor of leaving the Union. They have lost their minds,” wrote Mr Schatz. “Biden will be President, but these people are deadly serious about secession and sedition.”

If those red states had ever thought about what they were doing, or even why they were doing it—which they obviously hadn’t—they would have realized many would be bankrupted if they ever wanted a separate union.

They would be in danger of losing much of $437.596 billion in transfer payments made to them from the federal government that is above what they contributed to the US Treasury in FY 2018, according to the Rockefeller Foundation.

There were six states like New York and New Jersey that have large tax revenue surpluses totaling $51.4 billion which are distributed to poorer, mostly red states by the federal government, such as Kentucky that has a $45 billion deficit in their balance of tax payments with the federal government.

The tax surpluses from the richer states are paid out as part of transfer payments (e.g., social security, Medicare, Medicaid, SNAP, welfare) to members of the poorer, mostly red states.

This in fact is why America is a prosperous country—wealthy states help to support the federal programs of citizens in the poorer states. No one state can pull down other states because of its financial problems, and its citizens know they will be covered by our central government, whether in blue or red states.

Then why have Republicans under Trump continued their attempts to overturn the election results? NY Times’ Op-ed columnist Charles Blow said it best. Trump realized that trying to steal the presidency is more lucrative than being president with his calls for donations to his re-election Super Pac that now total more than $200M. In conning his base into believing he won the election, “We are witnessing one of the greatest grifts in history,” said Blow.

Harlan Green © 2020

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