The Rising Deaths of Despair Amid COVID-19

 Financial FAQs

ProjectSyndicate

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.

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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

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

The Results of Record Income Inequality

Financial FAQs

We know the results of trickle-down economic theory that says lower taxes and government regulations are supposed to lift all boats, as epitomized in Republicans’ latest tax bill. After the ninth year of this recovery, just 10 percent of American household benefited at all from subsequent economic growth.

In spite of the huge stock market recovery that has the S&P 500 index of largest US corporations up more than 25 percent since 2009, only the top 10 percent of income earners increased their net worth.
The busted housing bubble was a culprit, but also labor practices that have literally either outlawed collective bargaining for many workers, or enacted so called right-to-work laws that enable union members not to pay dues, even if they have benefited from union bargaining.

The result is that 25 percent of American workers earn less than poverty-level wages of $24,000 for a family of four, and household incomes haven’t risen faster than inflation since the 1980s. The national minimum wage hasn’t risen above $7.25 per hour since 2009, either.

Princeton’s Nobel laureate Angus Deaton has studied poverty and its causes for most of his professional live.

He said in a recent Project Syndicate article, a progressive journal: “Making matters worse”, he said, “more than 20 percent of workers are now bound by non-compete clauses, which reduce workers’ bargaining power—and thus their wages. Similarly, 28 US states have now enacted “right-to-work” laws, which forbid collective-bargaining arrangements that would require workers either to join unions or pay union dues. As a result, disputes between businesses and consumers or workers are increasingly settled out of court through arbitration—a process that is overwhelmingly favorable to businesses.”

Graph: Marketwatch

This is while corporate America is expected to post its best quarter of profit growth in seven years, according to Marketwatch’s Ryan Vlastelica. “For the poorest American families, in the lowest fifth of wealth, their net worth shed 29 percent over that period. Drops of at least 20 percent were also seen in every income percentile except for those in the 80-89.9 percentile, where the decline was a more modest 5 percent. The wealthiest decile, however, saw a jump of 27 percent, as seen in the above chart.”

As I have covered in countless past columns, America actually ranks among the worst countries when it comes to income inequality, based on its Gini coefficient, a measure of the wealth distribution of a country’s residents. The coefficient for the U.S. is slightly less than 0.40, which puts it roughly even with Turkey and Botswana, and more unequal than nations as Israel, Greece, Spain, and Germany. Iceland, the most equal society measured by Deutsche Bank, has a coefficient below 0.25.

There are many remedies to this situation. One has but to look at past history. Our fastest growth period was during the 1950s and 1960s, when the top income-earners’ tax bracket was 92 percent, unions were strong, and corporate CEOs earned 25 times what their employees earned. This built both the physical and digital infrastructure that gave us the record prosperity of that era. We also developed the Internet, and landed on the Moon.That tax structure was a way of redistributing income where it would do the most public good. 

Today, corporate CEOs in the largest corporations earn on average 300 times what their employees earn. We enrich the already wealthy, in other words, and neglect to plant the seed corn that would create future prosperity.

Harlan Green © 2018

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen