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Our Governors Are the Only Way Out of Our Economic Disaster

Charles N. Steele - May 22, 2020

There is a growing danger that the shutdown of the economy will inflict more harm than the coronavirus if the shutdown is not managed carefully. Unemployment is increasing. The risk of permanent business closures and bankruptcies is rising, and it will be increasingly difficult to avoid a long and painful stagnation, which will include increases in the death rate. It might not be too late to escape this, but it will require an immediate change of policy from governors.

The latest figures from the U.S. Department of Labor show that the unemployment rate on May 21 was 17.2%, the highest ever recorded in the current seasonally adjusted series, exceeding the previous high from May 1975. But this number almost certainly understates the unemployment disaster, because it only takes into account unemployment claims filed up to now. 

Trade Barriers Stand in the Way of Defeating COVID-19

Philip Stevens - May 22, 2020

Five Facts About Proposed New Aid to State & Local Governments

No Labels - May 21, 2020

Congress will soon consider bipartisan legislation intended to help states, counties and municipalities cope with tax revenue losses caused by the coronavirus pandemic. 

No Labels

  1. The bill would direct $500 billion to state and local governments that received relatively modest shares of previous aid.

Civil Society Was Made for Moments Like This

Ryan Streeter & David Wilde - May 20, 2020

The spirit of American volunteerism has been on display from the very beginning of the coronavirus crisis: Medical workers have flocked to virus hotspots to help; scientists are volunteering to battle the virus; students are providing childcare for health workers; community volunteers are delivering food to the elderly and vulnerable and sewing thousands of protective masks for hospital workers. The list goes on.

The provision of these services is no doubt vital. But the social capital produced by such civic activity also plays an important role, by protecting against the ills of isolation, such as anxiety and depression, and mitigating financial hardship. In short, if you entered this crisis already embedded in strong personal and social relationships, you are very likely faring better than those who did not.

Paying for the Catastrophe

On March 27, the Congress passed and the President signed a $2.2 trillion economic stabilization bill. It was by far the largest money bill ever enacted into US law. That bill followed two previous, smaller — but hardly inconsequential — bills for the same purpose, and was itself followed by a fourth bill. On top of those bills, the Federal Reserve will facilitate trillions of dollars of new lending; but noting the issues not yet addressed, the Congress has begun — via the press only, by all appearances — arguing over a fifth bill.

Nobody is counting all that money. Nor should they. You don’t worry about your cellphone bill when your stalled boat starts taking water just out of sight of shore. Likewise, you don’t dawdle on shoring up an economy that would otherwise be in free-fall.

Big Government is Back. What Does it Mean for Industry?

Steve Pociask - May 19, 2020

The COVID-19 crisis has rekindled America’s episodic and sometimes misguided love affair with massive government.

U.S. lawmakers thus far have spent $3 trillion (and counting) on emergency stimulus measures in response to the unprecedented economic shutdown. Still, despite the price tag and deficit impact, pollsters note that Americans are supportive of even more activism. A recent USA Today/Suffolk University poll found that 45 percent of respondents thought that government was doing too little. That is a margin of more than the 10% of respondents who felt government was doing too much.

In Michigan’s COVID-19 Branch-War, the Legislature is Right

Adam Carrington - May 19, 2020

A branch-war has erupted in the state of Michigan. The conflict pits Michigan’s Governor, Democrat Gretchen Whitmer, against the GOP-controlled state legislature. The conflict concerns two elements of Michigan’s response to COVID-19.

The first pertains to what to do next. Whitmer wishes to extend most of the restrictions she implemented since March at least through the month of May. A number of legislators desire a more aggressive re-opening, especially in areas less affected by the virus.

Why the Feds Need to Set Up Business Interruption Insurance

R.J. Lehmann - May 18, 2020

About once a generation, the U.S. insurance market encounters a crisis that demands a federal response. In the 1960s, it was severe uninsured flooding. In more recent memory, it was the catastrophic terrorism of September 11th. Yet another protection gap has been revealed in recent weeks, as the COVID-19 pandemic shutters thousands of businesses across the country.

Business owners have responded to the unexpected — and, in many cases, mandated —interruption in business by filing claims on their business insurance policies. However, most of these have been denied, as existing policies simply don’t include coverage for cases like this.

On Public Health and Private Incentives

James C. Capretta - May 15, 2020

The COVID-19 pandemic is in its early stages but that has not stopped some commentators from claiming the U.S.’s unsteady early response proves they were right all along about what is wrong with health care in this country. The tendency to see the crisis as validating a pre-determined agenda can be found among both advocates and detractors of stronger governmental control over the health system but it appears to be more pronounced among the former. As an example, an opinion writer at the New York Times recently pinned the blame for the U.S.’s stumbles on a profit-seeking medical-care system that is driven by market incentives.

It’s a weak argument. What has occurred so far is mainly a story about how effectively governments acted in response to a public health threat. The capacities of health systems to take care of sick patients is important, of course, but the primary reason some countries have fared better than others is because they deployed virus containment strategies aggressively and quickly. No country with widespread infection rates has avoided a high level of mortality. The U.S.’s response was not strong initially, which needs to be remedied, and is discussed below. But “market incentives” had nothing to do with these problems and may be instrumental in getting the country, and the world, out of its current mess.


Five Facts about the Pandemic's Impact on Food Supplies

No Labels - May 15, 2020

Images of farmers dumping milk and destroying ripe vegetables, coupled with long lines at food banks, have raised concerns about America’s food supply. The nation still produces enough food, experts say, but the coronavirus pandemic has disrupted supply chains and distribution patterns.No Labels

  1. Food producers can’t quickly switch from supplying restaurants to supplying grocery stores and food banks.

Farmers and other providers who traditionally sold to restaurants suddenly found their buyers shuttered. They couldn’t quickly shift their distribution operations to cater to new customers, such as grocers, and often had to destroy perishable goods. “Making the change from processing and packaging items for foodservice clients to preparing food for retail sales has proven to be a long and difficult process,” a MarketWatch article explains. For instance, it notes, “lots of items going through the foodservice supply chains are at a jumbo size,” which is too large even for warehouse retailers like Costco.

  1. Panic buying, high demand and lost volunteers are squeezing food banks.

What To Do About the Fall's Looming School Personnel Crisis

John P. Bailey & Jessica Schurz - May 14, 2020

Everyone was taken by surprise when schools closed their doors to over 55 million students this spring. When schools reopen, there will be important accommodations to protect students and staff. But some teachers and school personnel — as many as half a million — may not be able to return to school building due to being more at risk for contracting COVID-19. 

Although much about COVID-19 remains unknown, it has become increasingly clear that older populations are most at risk. One study by the World Health Organization shows that individuals over age 40 are more vulnerable to contracting the disease and those over age 60 are at the highest risk. Similar findings appear elsewhere throughout the medical research. Analyzing data from cases in China, a study published in the Lancet Infectious Diseases journal showed that the fatality rate jumped from 1.4 percent to 4.5 percent for those over age 60. A CDC analysis released in March examining US patients found similar results; those over age 65 made up 31 percent of cases, 45 percent of hospitalizations, 53 percent of admissions to intensive care, and 80 percent of deaths associated with COVID-19. 

President Trump Channels His Inner Reagan

Frank J. Gaffney Jr. - May 14, 2020

Yesterday, President Donald Trump struck what is arguably the single most important blow for freedom since Ronald Reagan took down the Soviet Union. Interestingly, one of the architects of the latter victory played an indispensable role in informing and encouraging the former.

Roger Robinson served as the Senior Director for International Economic Affairs on the Reagan National Security Council during four critically important years, from 1981-1985. In that role, Robinson drew upon his previous career as an international banker with Chase Manhattan Bank, which included serving for several years as a special assistant to its chairman, David Rockefeller, and as the vice president responsible for lending to the Soviet bloc. In short, he knew where the proverbial “bodies were buried” in the USSR and deftly exploited his understanding of the Kremlin’s limited sources of cash-flow to help President Reagan knock the pegs out from under its Communist regime.

The New Consensus on Worker Safety

Brent Orrell - May 13, 2020

As the weeks of quarantining have stretched into months, the slow rumblings of reopening the economy have recently turned into a roar. More than half the states have begun taking steps to reopen, or have plans to begin the process soon, meaning millions of people are likely to return to work soon. As the spread of COVID-19 has stabilized, employee anxiety about the return to work has spiked.

Many are able to avoid their workplaces entirely via telecommuting. As I’ve written elsewhere, the benefits of working from home are growing increasingly obvious as companies find it simultaneously protects employee health, improves productivity, and potentially reduces overhead costs. COVID-19 may be accelerating a workforce diffusion that was already underway before the pandemic.


Five Facts About the Pandemic's Impact On State & Local Services, Budgets

No Labels - May 13, 2020

Coronavirus has dealt a huge budgetary blow to states, counties and cities. Many are struggling to provide vital services even as their tax revenues shrink because of the pandemic-spurred economic collapse.

No Labels

  1. States and municipalities desperately seek ways to plug budget gaps.

The Forgotten Essential Workers: Women of Color in Child Care

As politicians and pundits rightfully praise essential workers during this pandemic, rarely does anyone mention another group of genuine heroes: those who care for the children of other essential workers. Could it be that because these workers are disproportionately women of color, their service is overlooked and undervalued? While women of color represent only 20% of the American population, they comprise 40% of the roughly 1.5 million child care workers in the United States.

This pandemic has exacerbated the existing inequities in the child care system. The average wage in 2018 for those employed in child care centers was $11.17 per hour, according to the Bureau of Labor Statistics, hardly a living wage. Nearly 15% of child care workers live below the artificially low “official” poverty line, more than double the rate of other industries, and 85% do not have health insurance

Government-Owned Internet Can't Be Counted on to Help the Underserved

Krisztina Pusok & Ana Diaz - May 12, 2020

On March 21st, the Maine Legislature announced the approval of $15 million in broadband Internet funding for rural and underserved areas. The intention is to expand broadband infrastructure, which will ultimately lead to economic development, and provide benefits like telemedicine to underserved communities.

But the proposal is only a mere tactic that uses the current pandemic to preempt state laws in order to provide funding to government-owned networks (GONs). In reality, they will only crowd out private options, leaving consumers with less choice.

Getting Colleges Out of the Law Enforcement Business

Frederick M. Hess & RJ Martin - May 11, 2020

Last week, Secretary of Education Betsy DeVos issued new regulations for Title IX, which governs how colleges investigate and punish sexual misconduct. DeVos reversed troubling Obama-era guidance which had stripped the accused of the right to an attorney, the right to have a representative question the accuser, and the right to even be informed of the evidence in question.

As we explained last Thursday, DeVos’s new regulations are a necessary step, restoring due process rights to the accused. But it’s worth asking if future efforts should go further, shifting responsibility for addressing campus sexual misconduct from colleges to law enforcement.

In the Trump Administration, Good Intentions are No Excuse

James Durso - May 11, 2020

Last month, President Donald Trump removed Glenn Fine, the acting Inspector General (IG) of the Department of Defense (DoD). Despite media reports that Mr. Fine had been “fired” he  just returned to his previous position as Principal Deputy Inspector General, the #2.

President Trump then appointed Sean O’Donnell, the IG of the Environmental Protection Agency, to serve as acting DoD IG until the Senate acts on his nominee for the position, Jason Abend, from U.S. Customs and Border Protection.

Schools Risk Drowning in Red Ink

Max Eden - May 8, 2020

Schools across America are struggling to regain their footing after the educational earthquake caused by COVID 19. Before they’ve fully recovered, they’ll face an unprecedented tsunami of red ink.

Schools are funded by a combination of local, state, and federal dollars. In an effort to decrease financial inequities across school districts of disparate means, state policymakers in the last decade substantially increased the share of school funding that comes from state income and sales taxes. With unemployment claims at 22 million and rising, retail sales currently illegal, and a major recession on the horizon, school districts are, to borrow a phrase from President Obama, going to take a shellacking.

Flavor Ban Was No Deterrent for E-Cig Use

Elizabeth Sheld - May 8, 2020

Anti-vaping advocates have claimed that nicotine addiction among teens has been driven by the seductive flavorings offered by e-cigarette companies. Public campaigns were launched nationwide agitating for flavor bans and after the U.S. was hit with an onslaught of high profile e-cigarette or vaping product use-associated lung injury (EVALI) and deaths, the states along with federal government pounced on the opportunity to regulate the nascent industry.

The panic began when former head of the Food and Drug Administration (FDA) Dr. Scott Gottlieb proclaimed teenage use of e-cigarettes to be an “epidemic.” Anti-vape advocates were empowered and well-funded to lobby states and the federal government with their claims about the dangerously delicious flavored nicotine pods addicting middle and high school students around the country.