Plans for Extended Unemployment Benefits, Wage Subsidies Risk Creating a Zombie Economy

“the states that have reopened have seen anemic economic recoveries at best.

Slate’s Jordan Weissman, using data from the app Open Table, notes that restaurant reservations are down as much as 92 percent from last year in those states that have allowed dining rooms to reopen.

A ranking of state jobless claims released yesterday by the personal finance website Wallethub finds that the number of people applying for unemployment is especially high in Connecticut, which had a bad COVID-19 outbreaks and a strict shutdown order, but also in Georgia and South Dakota. The former is lifting its shutdown order, and the latter never imposed one.

This matches with new research showing that economic activity declined at similar rates regardless of when states issued formal lockdown orders. Individuals, not the government, shut the economy down. They’ll also decide when, or if, it reopens.”

“if we can’t expect much of the pre-pandemic economic activity to return, that dramatically weakens the case for propping up businesses as Jayapal and Hawley want to do, or paying workers to stay jobless like the HEROES Act does. Both policies stymie markets’ ability to adjust to COVID-19 while shifting resources from those parts of the economy that can be productive during a pandemic to those that can’t. If there’s no demand for air travel, we’d be better off seeing baggage handlers shift to being warehouse workers or grocery delivery drivers. We want cooks and cashiers to move to restaurants that can figure out a way to stay profitable without dining service.

That doesn’t mean the government can’t provide relief. Even if we allow those readjustments to happen, we’ll still probably have a less productive economy for a while, and the negative effects of that will be concentrated on people who aren’t in a position to adapt. So there’s a reasonable case for cash transfers targeting the poorest Americans. But they shouldn’t be conditioned on staying at their current jobs, and—unlike unemployment benefits—they shouldn’t be conditioned on staying out of the labor force altogether.”

What’s the Herd Immunity Threshold for the COVID-19 Coronavirus?

“Herd immunity is the resistance to the spread of a contagious disease that results if a sufficiently high proportion of a population is immune to the illness. Some people are still susceptible, but they are surrounded by immune individuals, who serve as a barrier preventing the microbes from reaching them. You can achieve this through either mass infection or mass vaccination.”

“Most the evidence so far suggests that people who recover from a COVID-19 coronavirus infection do, at least for a time, develop immunity to the microbe. If that’s true, what is the disease-induced herd immunity threshold for the COVID-19 coronavirus? Various epidemiologists offer different answers, depending upon their estimates for the disease’s R0 and other variables, but most have converged on a threshold at around 60 to 70 percent.

More recently, some researchers have suggested that this threshold may be too high. In a new preprint, three mathematicians from Sweden and the United Kingdom, using an R0 of 2.5, calculate a reduction in the herd immunity threshold from 60 percent to 43 percent by incorporating some assumptions with respect to populations’ social activity levels and age structures.

A couple of new reports speculatively lower the possible herd immunity threshold for the coronavirus to just 10 to 20 percent of the population. This conjecture depends chiefly on assumptions about just how susceptible and connected members of the herd are.”

“There are no solid estimates for the percentage of the U.S. population that has already been infected by the coronavirus, but Youyang Gu and his team at COVID19-Projections estimate that right now the number is between 2.2 to 4.7 percent. That would mean that somewhere between 7.3 and 15.5 million Americans have been infected. A similar result emerges from a very rough calculation that multiplies the number of confirmed cases at 1.4 million by a 10-fold factor of undiagnosed cases and infections. (The 10-fold factor is derived from data recently reported by Indiana University researchers.)
The upshot: The U.S. as a whole is not yet close to achieving even the speculatively low estimate of the herd immunity threshold.”

The New York Times Recoils at the Predictable Consequences of the Mandatory COVID-19 Precautions It Supports

“If COVID-19 precautions are mandatory, they must at some point be legally enforced, with all the risks that entails, including violence and racial discrimination. The public health payoff might justify those risks in certain contexts—if a dense crowd happens to gather in Central Park, for instance, or if subway riders refuse to wear masks (although that was the situation in the video that the Times cites as evidence of overkill). But the risks cannot be eliminated if voluntary compliance is less than perfect, as it always will be.”

Coronavirus is a major test of America’s innovation industry

“the attention and resources dedicated to repurposing old drugs detracts from the pursuit of new therapies that would be true breakthroughs, exponential advancements in science. Feldman describes such innovation as “value beyond pearls.”
“It’s rare, it’s beautiful, it’s startling, it’s a thing of beauty,” she said.

But that kind of innovation takes time and money with no certain payoff. It’s simpler and cheaper to modify existing products to somewhat improve their efficacy or to tweak them to treat a different condition.

“I worry that our system is not well primed for it,” she said. “It’s all about the incentives. Our incentives aren’t directed properly.”

She pointed to the shift away from antibacterial resistance research and drug development, even though researchers anticipate millions of global deaths annually within the next few decades because bacteria have become resistant to the drugs that we already have to fight them.

Drug makers currently devote a lot of their attention to end-stage cancers, because they can benefit from “orphan drug” designation and other competitively advantageous policies, while Feldman argued that chronic conditions have been underserved. Looking at it from a societal perspective, the latter obviously has more value than the former — and yet that is not necessarily what our innovation system has been designed to reward.

Or look at the antiviral space, which is the most relevant to the coronavirus response.

Antiviral research investment historically has not been a priority for the major drugmakers. The Wall Street Journal reported Pfizer had to reestablish its antiviral research department for its Covid-19 work because the unit was disbanded in 2009. Novartis ended its antiviral and antibacterial research in 2018. One systemic review of the past 30 years of antiviral research found “only a few drugs were approved to treat acute viral infections” in that time.

“Antibiotics and antivirals are both areas that haven’t seen a tremendous amount of new drug development because the economic incentives haven’t justified significant R&D in this area,” Caroline Pearson, senior fellow with NORC-University of Chicago, told me recently.

So long as these incentive structures remain in place, Feldman warned, we will never be ahead of the curve in fighting off the next pandemic. She said that the US should be asking: “What’s of value and what should we incentivize people to do?””

Germany and South Korea excelled at Covid-19 containment. It still came back.

“The recent spike in Covid-19 cases in some of the countries thought to have best contained the virus — first Singapore, now South Korea and, potentially, Germany — is a glimpse into America’s possible future as states start reopening businesses and public activities after several months of lockdown.
All it can take to reverse the positive trends is a single undetected case. As Vox’s Alex Ward reported this week, one South Korean man who went out for a night on the town at several Seoul dance clubs has been linked to nearly 80 new cases there. Suddenly the country’s curve is rising again and the local government ordered bars and restaurants to be closed, an abrupt reversal of its reopening plans.”

The American unemployment system is broken by design

“The coronavirus crisis..has revealed many uncomfortable truths about America, including the country’s unemployment system: It is broken, and in many cases, it is broken by design. After years of disinvestment and underfunding, benefits systems across the country have been left starved and in disrepair. In many states, benefits are intentionally difficult to collect and application processes complex to navigate.”

” The program is funded through unemployment insurance taxes that employers pay to the state and federal government, and the amount collected by states varies, as do the benefits they provide, the way they set up their systems, and the way they deal with applicants. ”

“so, what the country has wound up with is a patchwork of unemployment systems.”

” Unemployment insurance is supposed to act as a stabilizer in an economic downturn, but ungenerous benefits mean that’s not the case. “In some of these states, the benefits are so hollowed out that it couldn’t be countercyclical,” said Rebecca Dixon, executive director of the National Employment Law Program, meaning benefits are unable to help boost the economy when it’s needed most.”

“The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, the $2.2 trillion stimulus package signed into law in March, makes some temporary adjustments to unemployment insurance. It adds on $600 a week in federal benefits through the end of July, extends eligibility by 14 weeks, and expands the pool of workers who can apply to include freelancers, gig workers, and those who are self-employed. Still, poor infrastructure and funding in different states make accessing those benefits hard.”

““Many states have refused to raise taxes to fund unemployment insurance. They’re always betting that the feds will bail them out if things get really bad, and no one expected it to get this bad, just a crush,” said Holzer.”

“in many parts of the country is unemployment systems have gradually been whittled down. Part of the problem is that many people on the left have been more focused on getting aid to workers, and many people on the right have focused on cutting funding altogether, so infrastructure has been neglected. People pay attention when there’s a crisis, and then it’s too late to act.”

“multiple states are still using COBOL, a coding language dating back to the 1950s, in their systems. In April, New Jersey put out a call for COBOL programmers to help reinforce its program. The problem with the language isn’t necessarily that it’s a bad one, it’s that there aren’t a lot of people who know how to use it anymore. That means there aren’t enough people to fix bugs in the system or update it to take on an influx of applications.”

“States employ a number of tactics to keep people from collecting and to discourage them from accessing the system. They put a hard-nosed administrative face to clients by way of work search verification, fraud prevention, identity verification, and adding in bureaucratic layers that are difficult to maneuver around. And by cutting back benefits, they also make it so workers feel like it’s less worth the hassle to apply. (Part of the problem now is that the $600 in weekly federal money is pretty motivating.)”

“unemployment insurance is not designed for the modern-day workforce and leaves people out. When the program was created in the 1930s and intervening years, it was designed for a largely white male workforce who were breadwinners and who were laid off for short periods of time and called back, Dixon explained, like a factory that would temporarily put workers on leave during a slow period. Employers wanted unemployment because they wanted their workers to be available to come back. But today, more layoffs are permanent, and there’s no relationship with employees.”

“If the US were to start over, it may very well try to deal with unemployment insurance at a federal level, Vroman said: “Internationally, almost every country that has unemployment insurance has a national system.””

A US immigration agency could run out of money by the end of summer without a $1.2 billion bailout

“Immigration has come nearly to a standstill over the past two months. The Trump administration has shuttered USCIS offices, closed consulates abroad, shut down the borders with Canada and Mexico and imposed a 60-day ban on the issuance of new green cards. Asylum processing at the southern border has also practically stopped, as Trump administration officials implemented a program to rapidly return migrants to Mexico without so much as a health exam.
While brought on by the pandemic, this kind of decrease in legal immigration is what Trump has long sought. He has railed against what he calls “chain migration,” referring to US citizens or permanent residents who sponsor their immigrant family members for visas and green cards. And he has sought to keep poor immigrants out by proposing to reject those who don’t have health insurance or who might use public benefits in the future. (Courts have blocked the restrictions on immigrants without health insurance from going into effect for now, but the policy affecting immigrants who might go on public benefits went into effect in February.)”

“Unlike other federal agencies, USCIS receives almost no taxpayer dollars, and is dependent on fees associated with filing applications for green cards, visas, work permits, US citizenship, and humanitarian benefits such as asylum. The pandemic has already brought on a “dramatic decrease” in its revenue that is only likely to worsen as applications are estimated to drop by about 61 percent through September, an agency spokesperson said. President Donald Trump’s restrictions on immigration, other countries’ restrictions on travel and the fact that necessary government offices aren’t open to process applications have all contributed to this decline.

To mitigate the budget shortfall, USCIS is planning to implement an additional 10 percent surcharge on all applications and sought Congress’s help on Friday, Buzzfeed’s Hamed Aleaziz first reported. The agency has also already limited spending to salary and mission-critical activities, but “without congressional intervention, USCIS will have to take drastic actions to keep the agency afloat,” the spokesperson said.”

How masks helped Hong Kong control the coronavirus

“New York City, with a population of about 8.4 million, has had over 28,000 coronavirus deaths as of May 18. Meanwhile, Hong Kong has officially recorded only four Covid-19 deaths, despite having 7.5 million residents.
One reason that could help explain the stark disparity: In Hong Kong, nearly everyone wears a face mask in public.

If any city in the world was likely to experience the worst effects of the coronavirus, Hong Kong would have been a top candidate. The urban area is densely populated and heavily reliant on packed public-transit systems, and it has very few open spaces. Moreover, a high-speed train connects Hong Kong to Wuhan, China, where the coronavirus originated.

Hong Kong, it seemed, was doomed.

But almost as soon as the outbreak first began in the city, millions of residents started wearing masks in public. One local told the Los Angeles Times that the government didn’t have to say anything before 99 percent of the population put them on.

Experts now say widespread mask usage appears to be a major reason, perhaps even the primary one, why the city hasn’t been devastated by the disease.

“If not for universal masking once we depart from our home every day, plus hand hygiene, Hong Kong would be like Italy long ago,” K.Y. Yuen, a Hong Kong microbiologist advising the government, told the Wall Street Journal last month.”

“Starting last spring, pro-democracy activists took to the streets of Hong Kong to protest a set of laws that would give mainland China — which isn’t supposed to have full control over the city until 2047 — more power over Hong Kong. To protect themselves from police tear gas and avoid the city-state’s ubiquitous surveillance cameras, millions of protesters donned masks.

In an effort to quash the movement last October, Hong Kong’s China-backed government banned the wearing of face masks in public. The hope was that forcing demonstrators to show their faces would make them stay home instead.

Just a few months later, the coronavirus happened.

As the coronavirus first hit the city, Hong Kong Chief Executive Carrie Lam fumbled her response, not wearing a mask during a press conference and, eventually, wearing one incorrectly in public. She also asked government employees not to wear masks.

By April, public health experts in Hong Kong were calling on the government to not only repeal the mask ban but also to mandate the wearing of masks in public as a means of curbing the coronavirus’s spread.

But by then, almost everyone was already wearing them, ban be damned. Indeed, the fact that the government seemed to advocate against masks may have helped make them more popular. Almost in protest, residents started wearing masks in large numbers and helping the most vulnerable communities obtain them.”

“The city has faced pandemics before, including the 1968 flu, which began in Hong Kong and killed about 1 million people worldwide. When SARS came to Hong Kong from mainland China in 2003, residents took it seriously and nearly everyone wore a mask. Partly as a result, the city lost only 300 people during that crisis.

Experts say that instilled a sense among the people of Hong Kong that masks are vital to thwarting a pandemic. That sense was reignited when the coronavirus hit. Now they’re everywhere.”

“Despite Hong Kong’s mask ban officially remaining in place, some of the government’s health officials now praise the citizenry for organically putting the coverings on without being told to do so.”

“It’s worth noting that Hong Kong also implemented a strong testing, tracing, and isolation program, in addition to strengthening travel rules and closing bars at the end of March. Those moves, perhaps just as much as masks, have helped keep Hong Kong’s coronavirus death toll low.

But the masks, research shows, are still very important.”

Trump says he’s taking hydroxychloroquine

“On Monday afternoon, President Trump told the press that he’s taking a drug called hydroxychloroquine as a preventative to ward off the coronavirus — a practice for which there is no evidence and that could, in theory, have negative side effects as serious as hallucinations and heart failure.
“I take it,” Trump said. “So far, I seem to be okay.”

Hydroxychloroquine is an anti-malarial drug that a non-randomized study from a French lab, publicized in March, initially suggested could be used as a treatment in fighting the coronavirus. In March, Trump frequently touted the drug, calling it “one of the biggest game changers in the history of medicine.” But further studies have concluded that it is not effective in many cases and should not be routinely used to treat patients.

Trump seems to be taking it not as a treatment for Covid-19 — he’s apparently tested negative — but as a preventive measure to protect himself from contracting it. There’s no medical evidence supporting the idea that this would work, and the risk of potential psychiatric and cardiac side effects, which are serious, would likely strongly outweigh any (hypothetical) benefits.

Nevertheless, Trump claims to be taking the drug anyway.”

“On the one hand, if Trump — a notorious liar — is telling the truth about taking the drug, it’s certainly newsworthy that the president is taking a dangerous medication for no good reason. It would not only speak to his judgment and fitness for office but also suggest a risk to his health and mental competence.

On the other hand, Trump may be trying to goad the media into getting bogged down in an issue that’s less important than the actual outbreak and Trump’s failed response to it. At the press conference, he told reporters, “I was just waiting for your eyes to light up when I said this, when I announced this,” indicating he’s perfectly aware that he’s starting a controversy.”