Category: Economic Policy

Child Tax Credit Not a Hit With Voters

The Daily Escape:

Cranberry season, Cape Cod, MA – August 2021 photo by Sharon Pilcher Castrichini

The American Rescue Plan included a fully refundable child tax credit. The credit provides $3,600 per year for children under 6, and $3,000 per year for children between 6 and 17. The credit is temporary, for 2021 only. It is paid monthly and phases out for single parents who earn more than $112,500 and married couples earning more than $150,000. The IRS began sending out the monthly Child Tax Credit payments on July 15.

This marks a sea change in government policy towards poor children. For years, the poorest children have been excluded from income support by eligibility rules that made assistance available primarily as a tax credit to families with sufficient income to pay taxes. This new credit, in contrast, is unconditional.

From the WaMo:

“The policy is winning rave reviews from think tanks. The Urban Institute…estimated that this year’s poverty rate will be cut from its 2018 level by 45%….And the Niskanen Center predicted that the credit will boost consumer spending by $27.6 billion and ‘deliver a substantial boost to rural economies across the country.’”

But as with many new policies in this pandemic, reality brings a few hiccups. Roughly 60 million children have already started receiving payments. These kids are in families that filed tax returns with the IRS in 2019 or 2020.

But there are two design flaws. The first is that many of the poorest families do not file tax returns, and hence will not automatically get checks. Approximately 4 million children who are eligible for the payments are falling through the cracks, including 2.3 million whose parents do not file a return. Immigrant parents may be hesitant to the sign-up process because they fear that their personal information would be shared with DHS or Border Patrol.

A second problem is that due to the combination of means-testing and receiving payments in advance, some families will be subject to a nasty year-end surprise when the IRS says they owe more taxes because of these payments.

This leads to two political problems. First, the Dems plan on running in the 2022 mid-terms partly on a message that the child tax credit has done something important for poor people, and that if elected, they plan to make the tax credit permanent.

The problem is, a mid-July Morning Consult poll showed that only 35% of voters said the expansion should “definitely” or “probably” be made permanent, while 52% said the opposite. A YouGov poll from around the same time found only 30% of voters favored permanent expansion, with 46% opposed to it. In both the Morning Consult and YouGov polls, a majority supported the expanded child tax credit for the current year, but not when they were asked whether the extension should be permanent.

This makes it difficult for Dems to find a message that will work if they plan on running on the child tax credit.

The second problem is the price of a permanent program. It will cost the Treasury about $100 billion annually through 2025, and about $190 billion annually after that. A permanent extension of the expanded child tax credit would cost $1.6 trillion over 10 years. Republicans are sure to bring this up when any Democrat says they want to make it permanent.

Passing a permanent child tax credit would also make passing many of the other progressive priorities impossible.

As unpleasant as it is to consider, the recent polling tells us that most voters may not be as in favor of slashing poverty as much as progressive Democrats are. They may have accepted it as a temporary fix to help people (children) survive an economic crisis, rather than as permanent economic policy.

Not every voter is moved by moral appeals to eradicate poverty. Not every voter feels sympathy for the poor. Most voters prioritize their own financial situation above all else. That’s where the Niskanen report can be most helpful, showing that local economies will benefit from the expanded child tax credit, with more consumer spending.

Income inequality is a top problem facing America today and one of the most destabilizing. The expanded child tax credit may be effective (and maybe good policy), but it doesn’t yet seem to be good politics.

The hope that a near-universal policy would forge an allegiance between middle-class, working-class, and poor voters seems as far away as when the bill was passed.

To boost those poll numbers, Democrats must impress voters outside of their political base about the economic gains from the policy.

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Why Won’t Manchin Help Keep Jobs in West Virginia?

The Daily Escape:

Grand Canyon NP at golden hour – photo by indieaz

Viatris is a new pharmaceutical company formed by the merger of Mylan and Upjohn late last year. Their strategy for improving profits post-merger was as is usual, to restructure and cut $1 billion in costs. One victim of the cost-cutting is the Viatris plant in Morgantown, West Virginia. The company announced the plant would close last December.

The Morgantown plant has been in operation since 1965. It employs between 1,500 and 2,000, whose jobs will be offshored to India and Australia. These are well-paying jobs in one of America’s poorer states. The bulk of the layoffs will occur on July 31, when 1,246 people will be let go, including 764 union workers and 482 nonunion staff. Complete closure will happen by March 2022.

Mylan reported $3.9 billion in profits in 2019. Naturally, local union president Joe Gouzd had harsh words for Viatris:

“This is the last generic pharmaceutical manufacturing giant in the US, and executives are offshoring our jobs to India for more profits. What is this going to do to us if we have another pandemic?”

The local union represents about 900 workers. Gouzd said:

“…we’re going to rid ourselves of 2,000 high-paying jobs in north central West Virginia, taking out $150m to $200m out of the local economy…”

The West Virginia legislature passed a bill calling on Governor Jim Justice and Joe Biden to save the jobs. Biden has proposed taxing companies that offshore jobs, but it remains to be seen whether he will be successful.

Senators Elizabeth Warren and Marco Rubio introduced the Pharmaceutical Supply Chain Review Act to study America’s over-reliance on foreign countries in pharmaceutical industry, but neither West Virginia Senator has sponsored the bill.

The Guardian reports that Republican Senator Shelley Moore Capito has ignored pleas to work with Biden officials to save the plant. Democrat Joe Manchin, whose daughter Heather Bresch served as Mylan’s chief executive until she retired in 2020, didn’t fully ignore their requests to get involved; he held a Zoom meeting in December that might as well have focused on “thoughts and prayers.”

Isn’t it curious that the state’s two Senators aren’t trying hard to keep jobs in their state?

You probably hadn’t heard that Bresch collected $37.6 million when she stepped down from Mylan. You also missed that under her leadership, Mylan recently undertook what’s called a “tax inversion”, changing its headquarters for tax purposes from Pittsburgh, PA to the Netherlands, reaping big tax breaks. So, less tax revenue for America.

Earlier, Mylan disclosed that it is in an ongoing lawsuit by the Public Employees Retirement System of Mississippi that alleges misconduct by the company. The suit alleges “misrepresentation and concealment of violations of FDA regulations governing pharmaceutical product quality and safety.” In 2016 and in 2018, the FDA found documentation, record-keeping, quality-control and cleaning issues. The plant was shut down temporarily after the 2018 findings. It then reduced production volume by about two thirds, and “right sized” plant staff.

But we initially heard about Ms. Bresch during Mylan’s EpiPen pricing controversy. They had been hiking prices for years on their epinephrine injector to the point where many people could no longer pay for it. Along with the EpiPen fiasco, Mylan paid $465 million to the federal government to settle claims it underpaid Medicaid rebates.

Understandably, the town and the state are looking for ways to head off the layoffs. Last week, members of the union and others rallied outside the state capitol in Charleston to urge Republican governor Jim Justice to help save the facility. According to the union, Justice said his administration was trying to find an alternative to closure, including holding talks with two companies that have expressed an interest in buying the plant.

But Justice said that Viatris was not cooperating:

“We’ve talked with Viatris, and we continue to struggle with them….They’re difficult to work with. The least they could do …is be cooperative.”

So, Viatris isn’t the best of corporate citizens. That doesn’t make them different from most multinationals. That means political pressure is the only leverage that will keep these jobs in America.

Yet, when you see these two “bipartisan” Senators not lift a finger to help the soon-to-be unemployed citizens of their own state, you have to ask: Why haven’t they done more?

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Senate Authorizes New Industrial Policy

The Daily Escape:

Oro Valley, AZ – 2021 photo by PoohBear512

On June 8, the Senate passed a major industrial policy bill that would direct government investment toward critical technological sectors. The bill is intended to reinvigorate the manufacturing segment of the US technology sector, providing alternatives to supply chains dependent on Chinese microchips. Some argue that it also lays the foundation for long-term economic and technological competition with China. The bill passed with a filibuster-proof 68 votes.

The debate over industrial policy is politically charged because it goes to the heart of a deeper, long-standing controversy over the role of free markets and the role of the government in the economy.

Proponents of a state-directed and funded industrial policy argue that the government has the duty to structure the economy in the national interest, since the free market may fail to do so. We know that manufacturing provides stable, well-paid employment, but that isn’t factored into an individual firm’s decision-making. We can look at American firm’s offshoring of production even though it has cost jobs domestically while also offshoring manufacturing know-how.

As we discovered with Covid, it is very important to produce critical goods domestically. Industrial policy can help a country determine what critical goods it needs to produce domestically, such as medical supplies, or military equipment, for national security reasons. We learned about the automotive chip shortage, which is part of the greater issue of foreign control of global computer chip production.

There is also an argument that the government should fund R&D because the societal benefits go far beyond what companies will ever invest in.

Industrial policy fell out of favor in the US during the 1980s and 1990s with the development of the Washington Consensus, that defined economic development as the result of free-market policies such as the privatization of state enterprises and promotion of free trade.

But because of our competition with China, there’s a renewed interest among DC politicians across the aisle with again doing what Republicans have castigated Democrats for doing: “Betting on winners and losers”.

The bill authorizes the lion’s share of the money, totaling $190 billion, for a major rethinking of federal science, technology and research spending. It creates a new technology division within the National Science Foundation to focus on emerging areas including artificial intelligence. It also gives $10 billion for the Commerce Department to invest in new technology hubs so that other regions and cities across the country can attract the same sort of economic opportunities as Silicon Valley.

If some version of the bill eventually passes both Houses and is signed into law by Biden, it represents a major shift in how the US government manages its relations with the tech sector.

Both Republican and Democrats now suddenly seem interested in government intervention in domestic markets. It turns out that bipartisanship is on the menu whenever the issue is socialism for corporations. We can easily pass legislation that sends $ billions to corporations, but money for voting rights, people’s domestic lives, and infrastructure? Not now, maybe not ever.

China has invested in R&D while the lion’s share of American firms have squandered their money on share buybacks. Shame on us for supporting tax cuts for corporations! If only we had the foresight to know how stupid those things were. Here’s a chart:

Source: Council on Foreign Relations

Oh wait. Many of us had that foresight.

We did this with Japan back in the late 1970s. Earlier, we outspent the Russians in the space race.

This time we will probably give $ billions to the some of the same companies that decided to move their factories to China in the first place. Oversight will be crucially important.

Nothing we do will prevent China from educating its people, building new infrastructure, and focusing on STEM. But we can keep our edge over the Chinese by focusing on education, basic research, infrastructure upgrades, and STEM.

And the Chinese won’t be an easy target.

While we debate whether intelligent design and Critical Race Theory should be taught in our schools, the Chinese will be colonizing the Moon. While we fight about the 2nd Amendment, the Chinese are moving to dominate the global economy.

Most of the bill funds domestic investments to remain technologically competitive and reduce dependence on our economic adversaries. This seems like sound policy.

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The Covid Recession and American Capitalism

The Daily Escape:

Upper Buttermilk Falls, Ithaca NY – June 2021 iPhone photo by Wrongo

The following chart appeared in the NYT on Tuesday in an article claiming that the recession is over. The unfortunate reality is that the COVID recession was artificially induced by a shutdown of the economy. But it may now be transitioning into a longer, systemic recession caused by poor economic policy. Take a look at the chart:

While economists say that, by traditional definitions, the Covid recession didn’t last very long, we are still down 7 million jobs from pre-pandemic levels, even while personal income is back to pre-Pandemic levels. So, how can the recession be over?

And why are lawmakers in Republican states calling for an end to unemployment benefits when so many remain out of work? Zandar says we should start by looking at Tennessee’s official job posting website:

“There are more than 250,000 jobs available in Tennessee right now, but….Only 3% of the jobs posted — about 8,500 as of Friday evening — pay $20,000 [per year] or more. The federal poverty line for a family of three is just under $22,000.”

Of the 8,500 jobs on the state of Tennessee’s official job board, about 8,250 pay $10 an hour or less, which is a poverty level wage even in Tennessee. But Tennessee’s governor Lee has decided to stop accepting CARES Act money in July, saying he didn’t want to pay people to sit at home.

As Ezra Klein said in the NYT: America doesn’t fight poverty, it runs on it.

“The American economy runs on poverty, or at least the constant threat of it. Americans like their goods cheap and their services plentiful and the two of them, together, require a sprawling labor force willing to work tough jobs at crummy wages. On the right, the barest glimmer of worker power is treated as a policy emergency, and the whip of poverty, not the lure of higher wages, is the appropriate response…”

More from Klein:

“Vast numbers of Americans are kept poor for a reason. Any whiff of labor organization, or worker solidarity is ruthlessly annihilated in order to maintain millions of Americans working for single-digit hourly wages, or slightly higher wages, but no benefits whatsoever. We demand it, because we know corporations will just break our backs with higher prices if we give in. Either way, we’re the ones who pay, and it’s never the billionaires.”

Klein mentioned a report, “A Guaranteed Income for the 21st Century,” that would guarantee a $12,500 annual income for every adult and a $4,500 allowance for every child. It’s what wonks call a “negative income tax” plan — unlike a universal basic income, it phases out as households rise into the middle class.

The team estimates that its proposal would eliminate poverty while costing $876 billion annually.

To give a sense of scale, total federal spending in 2019 was about $4.4 trillion, with $1 trillion of that financing Social Security payments and $1.1 trillion supporting Medicaid, Medicare, the Affordable Care Act and the Children’s Health Insurance Program. As Paul Campos says:

“$876 billion represents less than the growth in the personal fortunes of America’s 651 billionaires over the course of the 16 months of the COVID pandemic. Not, mind you, anything like those fortunes themselves, but merely the growth in the personal fortunes of 651 people over the past year and a third.”

A simple annual wealth tax on the incremental gain in wealth of obscenely rich Americans would by itself pay for somewhere between a third and half of the cost of eliminating poverty in this country, via straightforward wealth redistribution.

So why don’t we get rid of poverty by giving people without money, money? Because we haven’t adjusted psychologically and politically to the fact that the developed economies produce so much wealth that getting rid of poverty could be a minor problem of distribution, one that merely requires a social commitment to doing it.

Instead, we tell the people at the bottom of wage distribution: “This is America. If you don’t like being poor, you can always do something about it, like not being poor.” And many of us go back to eating our dollar menu cheeseburgers and thinking to ourselves “I don’t know anybody *that* poor”.

Except that if you think about it, you know plenty of people who ARE that poor. And apparently, many of us want to keep it that way, just in case we end up rich someday.

America’s $21 trillion American economy has been captured by its oligarchs and their political servants who say we can’t eliminate poverty because that would be socialism, and socialism makes the baby Jesus cry.

So, 50 million Americans continue to wake up dirt poor every day.

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Yellen Says Higher Interest Rates Are OK

The Daily Escape:

La Jolla, CA – photo by Russ Harris photography

Janet Yellen made news for a second time, announcing on Sunday, in an interview with Bloomberg, that higher interest rates would be a “plus” for America. She probably has a fairly good idea of how the Federal Reserve is thinking, since she was its Chair prior to becoming Treasury Secretary.

The issue in her interview was whether inflation would continue growing if Biden’s infrastructure bill is passed, and we spend an additional $4 trillion over the next 10 years. Yellen said that it wouldn’t create enough inflation to cause economic concern. She said that the current spurt in prices powered in part by the Covid stimulus, is just temporary, and would fade next year.

But Yellen also said that if current price increases turned out not to be temporary, and it triggered more persistent inflation, the concomitant higher interest rates wouldn’t be a bad thing:

“We’ve been fighting inflation that’s too low and interest rates that are too low now for a decade….We want them to go back to a normal interest rate environment, and if this helps a little bit to alleviate things then that’s not a bad thing – that’s a good thing.”

Current Fed Chair Jerome Powell must surely see this as political cover for any near-term rate hikes, but opinions differ today on whether we’re in for a new run of inflation. We have some data that’s worrisome. Economic theory explains why we probably should be worried. And yet, we have plausible-sounding explanations as to why things are actually okay.

The younger generations may have trouble believing how dark things seemed in 1979 when President Carter appointed Paul Volcker Fed chairman. Some of us remember inflation that hit 14% in 1980. Unemployment trended up to 9.7% in 1982. Oil prices had jumped off the charts.

Volcker took dramatic steps to rein in the runaway inflation by tightening the money supply, which drove the Prime Rate to 21%. His actions led to not one, but two recessions before prices finally stabilized.

Nobody wants to see that type of inflation recur now, but low interest rates have increased wealth inequality in the US. Soaring stock and housing prices are a direct consequence of interest rates that remain reliably low. When this happens, people can borrow money for less than they can make by investing, and newly printed dollars that continue to pour into the markets ensure that prices will continue to rise.

And this low-rate scenario benefits those who already have lots of stock and real estate.

How could Elon Musk make $142 billion in 2020 when total revenues (not profits) at Tesla and SpaceX were less than half that number? Share prices in both companies rose with demand from investors with too much cash in their pockets. The growth in Musk’s fortune is based on the inflated share prices of both firms.

Yellen’s underlying message is that if the Fed maintains its low interest rate policy, more cheap money will flow into the pockets of people who really don’t need it. She’s correct when she says rates have been too low for a decade. It’s created an asset bubble, particularly in stocks and real estate. Today’s prices are no longer grounded in reality.

As for how to unwind the bubble? Good luck: Very few people will be happy if the stock market drops, or if the value of their home drops, say, just before retirement.

And like all things, inflation is political. House Republicans are working to undermine Biden’s economic agenda by zeroing in on voters’ latent fear of inflation. They are circulating a memo with the subject line: “Tie Biden Agenda to Inflation.” It tells members to “explain to voters how inflation is Democrats’ hidden tax on the Middle Class.”

The GOP is attempting to stir up fear of an impending economic downturn just as businesses are beginning to reopen after a year of being impeded by Coronavirus restrictions. They’re also saying that taxpayer dollars being put toward Covid relief and unemployment benefits will tank the economy.

The GOP is also using a WaPo op-ed by Larry Summers. Summers was Clinton’s Treasury secretary, and he was a former director of the National Economic Council for Obama. The article warns of the risk of sharply rising inflation expectations.

Ultimately, we’ll see if the inflation scare-mongering by Larry Summers is real.

What should we believe about inflation and interest rates? It doesn’t matter what we believe. What matters is what the market thinks. And if the market suddenly stops believing the explanation as to why these inflationary pressures are temporary, we’ll see rates rise bigly.

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US Banks Want Another Bailout

The Daily Escape:

Beach near Avon Fishing Pier, NC – April 2021 photo by Greg Kiser

Many of you know that Wrongo spent many years as a banker for one of the top-three US banks. Banks have several challenges when trying to make a buck. They must first find a borrower. The borrower must be able to afford and repay the loan, and when the loan is repaid, the banker must find another borrower. That summarizes the raison d’etre for loan officers and banks in general. Full disclosure: Wrongo receives a pension from the big bank.

That background may help with the following story from the NYT:

“The Biden administration’s efforts to provide $4 billion in debt relief to minority farmers is encountering stiff resistance from banks, which are complaining that the government initiative to pay off the loans of borrowers who have faced decades of financial discrimination will cut into their profits and hurt investors.”

This debt relief is part of the $1.9 trillion stimulus package that Congress passed in March. It is intended to make amends for the discrimination that Black and other farmers of color have faced from lenders and the United States Department of Agriculture (USDA). More from the NYT:

“But no money has yet gone out the door. Instead, the program has become mired in controversy and lawsuits. In April, white farmers who claim that they are victims of reverse discrimination sued the USDA over the initiative.

Now, three of the biggest banking groups — the American Bankers Association, the Independent Community Bankers of America and National Rural Lenders Association — are complaining about the cost of being repaid early.”

The impacted banks will receive 120% of the outstanding loan balances. They are getting that additional amount to help cover their costs and taxes. Their complaint is that 120% isn’t enough, that they have been short changed because they won’t receive future interest on a loan that will no longer exist.

What has happened to corporate America if this is really a legitimate issue?

When a bank loan is repaid early, the bank now has that money available to lend again. The bank isn’t losing money, they’re losing the ability to earn the total return they projected when they originally made the loan. Most loans have a right of prepayment, usually without penalty. So, once repaid, the bank has an opportunity to create new loans and a new earnings stream with a new borrower.

Where’s the problem unless Wall Street requires another bail-out because they can no longer operate profitably under their basic business model?

A glitch is that the banks do not always hold the loans they originate to maturity. Instead, they package them and sell them to other investors. The bank lobbying groups have been asking the USDA to step in and make the loan repayments on behalf of the borrower. Of course, this makes what was a loan to a Black (or other minority) farmer a riskless US government security.

The USDA says that obliging the banks would put an undue burden on taxpayers and that the law doesn’t allow the agency to pay interest costs or reimburse secondary market investors. This quote from Bill Bridgeforth, a farmer in Alabama who is on the board of the National Black Growers Council says it all: (brackets by Wrongo)

“Look at the two groups: You have the Black men and women who have gone through racism and discrimination and [some] have lost their land and their livelihood….And then you have the American Bankers Association, which represents the wealthiest folks in the land, and they’re whining about the money they could potentially lose.”

In addition to the banks, a group of white farmers in Wisconsin, Minnesota, South Dakota, and Ohio are suing the USDA, arguing that offering debt relief on the basis of skin color is discriminatory. The lawsuit was filed by a group led by (who else?) the former Trump administration troll Stephen Miller. Miller’s fear of people of color getting anything is at the diseased heart of America’s economic, justice, and social systems.

Investing involves risk, including the risk of losing money. These banks aren’t going to “lose” money. And they’re ignoring the historical injustices visited on these farmers while focusing on their bottom lines. They’re also ignoring that they were an important part of that systemic racism.

This is another example of a huge flaw in our national ethos: The notion that maximizing business profits must always be a primary consideration when formulating government policy, and that enriching shareholders should take precedence over everything else.

The banks protesting debt relief for Black farmers says plenty about their sense of entitlement, particularly when their profits are soaring. It’s more proof that we need revolutionary change to American capitalism.

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Monday Wake Up Call – May 10, 2021

The Daily Escape:

Lone Juniper, Black Canyon, Gunnison NP, CO – 2020 photo by Mattbnet

Isn’t it time that corporations paid decent wages?

After the Labor Department released its April jobs report, the US Chamber of Commerce blamed last month’s weak employment growth on the $300 weekly supplemental jobless benefit. They then urged lawmakers to eliminate the enhanced unemployment payments that were extended through early September by Biden’s American Rescue Plan.

This, from the dudes who willingly spend $300 on a lunch.

According to the US Chamber’s analysis, the extra $300 unemployment insurance (UI) benefit results in roughly one in four recipients taking home more pay than they earned working. But, if one in four recipients are making more not working than they did working, that’s not an indictment of $300 a week in UI benefits. It’s an indictment of corporations who pay less-than-living wages.

We could blame Asia for this, or we can blame our managerial and ownership class who engineered the outsourcing deals that made it possible. They built factories in Asia as an economic-production-economic-aggression platform to disintermediate American workers by sending higher wage jobs to lower wage locations in the Far East. And in many cases, the same companies who closed the American plants owned the Asian factories.

It’s sickening to hear these big business types complain that raising wages will destroy the economy! That’s the same argument which was used in the South against ending slavery (it would hurt the economy).

The US Chamber isn’t alone. South Carolina is cutting off extended unemployment benefits starting on June 30. From the SC governor:

“South Carolina’s businesses have borne the brunt of the financial impact of the COVID-19 pandemic. Those businesses that have survived — both large and small, and including those in the hospitality, tourism, manufacturing, and healthcare sectors — now face an unprecedented labor shortage,”

South Carolina’s unemployment rate was 12.8% in April of last year. But this March, it was down to 5.1%, significantly below the 6.1% national rate. Still, these Governors (Montana has done this too) are simply acting as shills on behalf of corporations to force workers back into low wage jobs.

Many studies have shown that the employees of big box stores like Walmart and Target cannot meet their basic economic needs on the money they make at their minimum wage job. Many turn to community social services just to feed their families.

It’s not China (or other Asian countries) that are to blame. We demand ever-lower prices, so something had to give. That something was middle-class American jobs. The American public was never part of the discussion about the pros and cons of offshoring manufacturing to lower wage countries, or how that would both lower costs for goods, but also destroy American jobs.

A lot of the people who now shop at Walmart and Target lost their jobs to Mexico, China, or Bangladesh. At which point, they needed some form of welfare, and/or another part time job at Walmart-type wages. And now that they’re on Walmart wages, Walmart prices are all they can afford.

Time to wake up America! We should be asking how can it be that food banks are overwhelmed while the Dow Jones Industrial Average hits an all-time high? Simply, the stock market isn’t the whole economy. The stock market is about corporate profits, while food banks are about minimum wage jobs and unemployment.

We should be asking: Why do these corporations (the small as well as the large) persist with business models that don’t allow them to pay living wages?

We could also ask whether more red states will try to “solve” the employment problem by hurting the unemployed rather than treating the root cause: paying living wages.

To help you wake up, listen to Rag’n’Bone Man and P!nk on Rag’n’Bone Man’s new release, “Anywhere Away from Here”. We often feature music to have fun with, or to dance to. And then there are tunes like this, music for the heart and soul:

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Sunday Cartoon Blogging – May 9, 2021

The Department of Labor released its employment statistics for April on Friday, and it was a big disappointment. Many economists thought the economy would create around a million jobs for the month, but the actual figure was only 266,000 jobs. That total would be acceptable if America had a healthy economy, but it falls far short of what is needed to recover from the Covid-created recession.

The increase in the civilian workforce was 430,000 in April. The net result was a rise in the number of unemployed workers. This caused the unemployment rate for April to tick up by 0.1% to 6.1%.

The media are filled with reports that employers say they can’t find enough workers for the jobs they have available. Leaving aside the devastating loss of childcare that occurred during the pandemic which is keeping many women at home, more workers will return if employers do two things: First, make sure the workplace is safe for returning workers. Second, PAY A LIVABLE WAGE. Enough ranting. On to cartoons.

What’s with the vaccine hesitancy?

“Incentives” are the new solution:

GOP tells Cheney it isn’t personal, it’s just business:

Two-faced Mitch:

 

The GOP is showing it intends to control the government, no matter what:

Happy Mother’s Day:

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Monday Wake Up Call – Infrastructure Edition, March 15, 2021

The Daily Escape:

Ruby Beach Overlook, Olympic NP, WA – 2021 photo by Erwin Buske

Back in pre-history or as Wrongo likes to call it, 2004, John Edwards said that there were two Americas. He was talking about social stratification and its pernicious impact on social cohesion in America.

Biden and Congress have just passed the American Recovery Plan into law. It provides a temporary assistance to many Americans, particularly for those in the two Americas who are struggling in our economy. As Wrongo said yesterday, although total wages are now at the level they were before the Covid recession, almost 10 million fewer Americans are working! If we are to be a healthy society, these people need jobs.

Listening to Republicans, there’s no money left in the piggy bank to fund the rest of what America needs to do. They say our debt is too high, and that it would be a terrible mistake to raise taxes on corporations or the wealthy to fund our needs.

Yet, something must be done about the disaster that is America’s infrastructure. Biden has said that improving and modernizing our infrastructure is a high priority for his administration. He campaigned on a $2 trillion infrastructure plan to create a:

“modern, sustainable infrastructure and an equitable clean energy future.”

But there is a huge chasm between where we are and where we need to go. From the WaPo: (parenthesis by Wrongo)

“America can put a rover on Mars, but it can’t keep the lights on and water running in the city that birthed the modern space program (Houston). It can develop vaccines….to combat a world-altering illness but suffers one of the developed world’s highest death rates due to lack of prevention and care.”

America’s recent historic breakthroughs in science, medicine and technology coexist alongside monumental failures of infrastructure, public health, and education. More from the WaPo: (emphasis by Wrongo)

“The disparities reflect a multitude of factors…but primarily stem from a few big ones: Compared with other well-to-do nations, the US has tended to prioritize private wealth over public resources, individualism over equity and the shiny new thing over the dull but necessary task of maintaining its infrastructure, much of which is fast becoming a 20th century relic.”

One of our two Americas pays a heavier price for our politicians’ unwillingness to build new infrastructure. Yet politicians kick the can down the road, since higher taxes to fix things is rarely a winning political strategy.

From highways to airports, from internet access to schools, to the electric grid, our infrastructure isn’t distributed equally. Even in richer zip codes, infrastructure quality is uneven. The myth that America treats everyone equally regardless of race, color, or creed is as decrepit as our bridges and highways.

Americans used to be proud of their infrastructure. But since Reagan, Republicans have believed that government spending is a problem. Loving new roads, bridges and tunnels changed to outright suspicion when austerity became the Republican religion.

They are always willing to cut taxes by $trillions to further enrich wealthy people. But they scoff at building a high-speed rail network, a high-speed internet network, or an integrated electric grid. If you’ve ever traveled through a Chinese airport, or traveled by rail in Europe, you have experienced awesome infrastructure projects, things that are normal in most developed nations.

Yet in America, we’re far behind, mostly because Republicans put growing personal wealth ahead of supporting the public good. Much of this hurts the bottom half of the US population more than the top half. It hurts rural America more than urban and suburban America. Most suburbs are as modern and safe as any major city in Europe or Asia. Their public schools are modern and largely well-equipped.

None of these are true in rural or inner-city America.

The time has come to address infrastructure. At least some of it must be paid for by new taxes, even if that means zero Republican political support.

Time to wake up America! We can do better for both Americas by investing in education, infrastructure, and people. And we can give some of those 10 million long-term unemployed workers a new opportunity to succeed in a growing US economy.

To help you wake up, let’s go back to the 1980s, and listen to the Eurythmics do a live version of “Would I Lie to You”. High energy and lots of fun:

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Our New Normal

The Daily Escape:

Abyss Pool, West Thumb Geyser, Yellowstone NP – 2020 photo by eTeT

The “New Normal” is here. Tuesday was the first day for school buses on the streets of Wrongtown, CT since March. Until the buses rolled, we could keep lying to ourselves about the pandemic. But now that school has started up for kids in K-12, the new normal is here. We’re soaking in it.

It’s a patchwork of online and in-person formats. Here in Wrongtown, we’re following a hybrid formula of kids physically in class for some days, and participating remotely on the rest. But confusion reigns. One parent asked on the town’s Facebook page whether her kid had to log on to the class website on the days when they were at home:

“He is in school on Thursdays and Fridays but do we need to log on every day Monday thru Wednesday considering those are the days he is home? Any advice would be greatly appreciated. Thanks.”

Or, this one:

“Hi does anyone know how to sign in to distant learning?”

Ok, the new normal hasn’t been completely reduced to practice, and with respect to getting our kids an education, we’ve still got lots of learning to do.

But other things also dominate our new reality. First, despite the happy talk about the economy, many jobs aren’t coming back. Temporary layoffs are now starting to look permanent. From Barron’s: (emphasis by Wrongo)

“Before the pandemic, a temporarily unemployed worker had a roughly 60% chance of finding a job in the next month. Lately, that probability has fallen to about 40%, while the chance for a permanently unemployed worker to find a job in a given month is about 20%.”

The US workforce is becoming increasingly divided into two groups: Those who are confident in keeping their jobs, and those who are pessimistic that they will ever return to their old jobs. The question for them is how will they cover their expenses as federal jobless benefits decrease or expire.

And we’re still more than 11 million jobs down from where we were in February.

Even if there is some GDP and jobs growth in the September report (the last one before the election), it won’t be enough to bail out the unemployed. The pandemic disproportionately hit workers in the leisure and hospitality sector (restaurants, hotels and travel); employment in that sector is still down around 25%.

Trump and the Republicans didn’t create the problems faced by low-wage Americans, but they made them worse by not dealing promptly with the pandemic, and then, by stressing the economy over the pandemic, which allowed Covid to roar back. And what economic recovery we have is bypassing those who most need to recover!

Finally, our new COVID reality: About 30,000 Americans died of Covid-19 in August.  And the number of new coronavirus cases has plateaued. Between Labor Day fun, and school re-openings, there’s a pretty good chance that America’s virus situation is about to take another turn for the worse.

Hundreds of colleges that had planned on having their students on campus have reversed their stances and decided on a virtual semester. The NYT reports that colleges have seen 51,000 cases since schools opened.

Kevin Drum reports that from August 2nd to September 2nd, the US recorded 1.4 million new cases of COVID-19. And according to a new study, 19% of those cases (266,000) were caused by the Sturgis Motorcycle Rally in South Dakota.

The riders refused to mask up, just like the college kids. People are tired of wearing masks, and they are tired of being cooped up. Apparently, six months of compliance is all that Americans can do. They want normalcy, but there’s a new normal that’s already here.

Until we have a safe and effective vaccine, there is no alternative to wearing a mask and staying physically distant whenever possible. We’re nearing 200,000 deaths and the flu season is coming. Think for a minute about that possible vaccine:

  • It needs to be approved, and 600M doses have to be manufactured and distributed.
  • We need 600M doses because the best guess now is that people will need to get two shots.
  • And we’re not sure how much time is required between shots.

Only when all people mask up, will most companies hire again. Only then will most kids be physically in school. Only then will most people be able to pay their bills with money earned in a paycheck. Or we can wait for the vaccine.

We have just 54 days until the election.

People shouldn’t get distracted from surviving the new normal by BS from the Trump campaign about Nancy Pelosi’s salon visit, or Biden’s supposed cognitive issues.

The new normal is the only issue that matters.

Vote to turn that into a non-toxic normal. And get your friends to vote for a non-toxic person.

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