Written by rjs, MarketWatch 666
News posted last week about economic effects related to the coronavirus 2019-nCoV (aka SARS-CoV-2), which produces COVID-19 disease, has been surveyed and some articles are summarized here. We cover the latest economic data, especially the new coronavirus relief bill and stimulus checks, government funding, the latest employment data, housing market reports, mortgage delinquencies & forbearance, layoffs, lockdowns, and schools, as well as GDP. The bulk of the news is from the U.S., with a few more articles from overseas at the end. (Picture below is morning rush hour in downtown Chicago, 20 March 2020.) News items about epidemiology and other medical news for the virus are reported in a companion article.
Please share this article – Go to very top of page, right hand side, for social media buttons.
This week there are many articles on housing, jobs, and schools. I have not covered infrastructure and the Archegos blow up, because I could not see any tie to the virus in them:
QE During the “Everything Mania”: Fed’s Assets at $7.7 Trillion, Up $3.5 Trillion in 13 months – (graphs) The Fed has shut down or put on ice nearly the entire alphabet soup of bailout programs designed to prop up the markets during their tantrum a year ago, including the Special Purpose Vehicles (SPVs) that bought corporate bonds, corporate bond ETFs, commercial mortgage-backed securities, asset-backed securities, municipal bonds, etc. Its repos faded into nothing last summer. And foreign central bank dollar swaps have nearly zeroed out. What the Fed is still buying are large amounts of Treasury securities and residential MBS, though no one can figure out why the Fed is still buying them, given the crazy Everything Mania in the markets. But for the week, total assets on the Fed’s weekly balance sheet through Wednesday, March 31, fell by $31 billion from the record level in the prior week, to $7.69 trillion. Over the past 13 months of this miracle money-printing show, the Fed has added $3.5 trillion in assets to its balance sheet: One of the purposes of QE is to force down long-term interest rates and long-term mortgage rates. But long-term Treasury yields started rising last summer. The 10-year Treasury has more than tripled since then and closed today at 1.72%. Mortgage rates started rising in early January. Bond prices fall as yields rise, and the crybabies on Wall Street want the Fed to do something about those rising long-term yields and the bloodbath they have created in the prices of long-term Treasury securities and high-grade corporate bonds. But instead, the Fed has said in monotonous uniformity that rising long-term yields despite $120 billion of QE a month are a welcome sign of rising inflation expectations and a growing economy: To put that $30 billion dip this week into perspective, here is the detailed view of the Fed’s total assets since early 2020: After the initial blast a year ago, the Fed has continued to add around $80 billion a month in Treasury securities to its balance sheet, bringing the 13-month total addition to $2.47 trillion, which more than doubled its Treasury holdings over the period to $4.94 trillion: Holders of mortgage-backed securities receive pass-through principal payments as the underlying mortgages are paid down or are paid off. The Fed buys MBS in the “To Be Announced” (TBA) market to replace the pass-through principal payments and to increase its balance. But trades in the TBA market take months to settle, and timing differences create the zig-zags. The pace of the increase of the balance has steepened a little this year as pass-through principal payments slowed down due to the slowdown in mortgage refis caused by rising mortgage rates. This $2.18 trillion of MBS include the Fed’s purchases of commercial mortgage-backed securities, a program it announced during the crisis. It was going to be a huge program, according to media hoopla. But in effect, it purchased only $10 billion of CMBS, mostly during April and May last year. This program is now shut down, and the Fed has ceased buying CMBS as of last week. Principal payments that the Fed receives will reduce the balance going forward. The Fed continues to offer repos, but after it had raised the bid rate last June, making its repos unattractive, there have been no takers. The remaining repos matured and were unwound last summer: The Fed offered dollars to 14 other central banks in exchange for their currency. Nearly all these “central bank liquidity swaps” matured and were unwound. Just $2.5 billion remain, split between the ECB, the Swiss National Bank, and the Bank of Mexico – down from $450 billion during the peak: The Fed created these Special Purpose Vehicles (SPVs) as legal entities that can buy assets that the Fed is not allowed to buy otherwise, such as corporate bonds, junk bonds, bond ETFs including junk bond ETFs, auto-loan backed securities, municipal bonds, corporate paper, etc. The Fed lent to the SPVs, and the Treasury Department provided equity funding that would take the first loss. These SPVs are now on ice and have expired with exception of the PPP liquidity facility (red), which the Fed extended for another three months through June. It buys PPP loans from banks and is the only SPV that is growing. All others are either frozen or declining:
Fed’s Waller says the central bank isn’t keeping rates low to finance government debt – The Federal Reserve is not keeping monetary policy easy to enable the government to rung up debts and deficits, Fed Governor Christopher Waller said Monday.Defending the Fed’s independence from the fiscal authorities in Congress, Waller rejected notions that the central bank is holding borrowing costs low to help service the debt or that it is conducting asset purchases to finance the debt-laden federal government.”My goal today is to definitively put that narrative to rest. It is simply wrong,” Waller said in prepared remarks to the Peterson Institute for International Economics. “Monetary policy has not and will not be conducted for these purposes.”As part of its Covid crisis response, the Fed cut short-term borrowing rates to near zero and has been buying at least $80 billion of Treasurys each month, along with $40 billion of mortgage-backed securities.At the same time, total government debt has soared by $4.5 trillion, or nearly 20%, since early March 2020, and the deficit for fiscal 2020 was more than $3.1 trillion. The Congressional Budget Office has projected the fiscal 2021 shortfall to be $2.3 trillion, and that doesn’t include the nearly $1.9 trillion stimulus package approved recently. Fed critics say the central bank has been charged with keeping rates low so the government can continue borrowing. Though Fed officials have largely applauded the aggressive fiscal policy, Waller said monetary policy is not set with keeping borrowing costs low in mind.He further stressed the importance of Fed independence from Congress so monetary policy is not designed with political objectives in mind.”There are sizable costs if cooperation turns into fiscal control,” Waller said.”The Congress was fully aware of the potential misuse of monetary policy for political reasons, and it purposefully created the Federal Reserve as an independent central bank,” he added. “The design features of the Federal Reserve minimize political influence over monetary policy while still maintaining accountability to the Congress and to the electorate for its policy actions.” Waller is the most recent addition to the board of governors, gaining confirmation in December after having been nominated by former President Donald Trump. These are his first public remarks.
Podcast Rightsizing the Fed’s emergency lending powers – Below is a lightly edited transcript of the podcast: “24 Min Read”
Seven High Frequency Indicators for the Economy –These indicators are mostly for travel and entertainment. The TSA is providing daily travel numbers. This data shows the seven day average of daily total traveler throughput from the TSA for 2019 (Light Blue), 2020 (Blue) and 2021 (Red). This data is as of March 28th. The seven day average is down 42.6% from the same week in 2019 (57.4% of last year). The second graph shows the 7 day average of the year-over-year change in diners as tabulated by OpenTable for the US and several selected cities.This data is updated through March 27, 2021. This data is “a sample of restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins. Dining picked up during the holidays, then slumped with the huge winter surge in cases. Dining is picking up again – and is close to 2019 in Texas and Florida. This data shows domestic box office for each week and the median for the years 2016 through 2019 (dashed light blue). The data is from BoxOfficeMojo through Mar 25th. Note that the data is usually noisy week-to-week and depends on when blockbusters are released.Movie ticket sales were at $22 million last week, down about 88% from the median for the week.This graph shows the seasonal pattern for the hotel occupancy rate using the four week average. This data is through March 20th. Hotel occupancy is currently down 15.4% compared to same week in 2019). Note: Occupancy was up year-over-year, since occupancy declined sharply at the onset of the pandemic. However, occupancy is still be down significantly from normal levels. . This graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline supplied compared to the same week of 2019. Blue is for 2020. Red is for 2021. As of March 19th, gasoline supplied was off about 5.6% (about 94.4% of the same week in 2019). This graph is from Apple mobility. From Apple: “This data is generated by counting the number of requests made to Apple Maps for directions in select countries/regions, sub-regions, and cities.” This is just a general guide – people that regularly commute probably don’t ask for directions. There is also some great data on mobility from the Dallas Fed Mobility and Engagement Index. This data is through March 27th for the United States and several selected cities. The graph is the running 7 day average to remove the impact of weekends. According to the Apple data directions requests, public transit in the 7 day average for the US is at 62% of the January 2020 level. It is at 55% in Chicago, and 61% in Houston (the Houston dip was a weather related decline) – and moving up recently. Here is some interesting data on New York subway usage. This graph is from Todd W Schneider. This is weekly data since 2015. Most weeks are between 30 and 35 million entries, and currently there close to 10 million subway turnstile entries per week.
Business Cycle Indicators at the Beginning of April – Menzie Chinn – The Bloomberg consensus is for an increase of 674 thousand jobs in March. That’s heady news, offsetting the somewhat less upbeat news from the estimate of February monthly GDP released by IHS Markit today – a decrease of 0.9% after upward revision in January’s figure by 0.3% (not annualized). Even if expectations are met, employment will still be 5.8% below that recorded at the NBER peak in February 2020. In the context of key macro indicators followed by the NBER Business Cycle Dating Committee: Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus as of 3/3 for February nonfarm payroll employment (light blue square), industrial production (red), personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), consumption in Ch.2012$ (light blue), and monthly GDP in Ch.2012$ (pink), all log normalized to 2020M02=0. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (3/1/2021 release), NBER, and author’s calculations. Atlanta Fed GDPNow (4/1) is for 6% in Q1; NY Fed (3/26) is at 6.1%. IHS Markit nowcast as of today is 5.2% (all figures SAAR).
Democrats Prepare To Push Biden For A $10 Trillion, Decade-Long Green Infrastructure Plan –As President Joe Biden gears up to press Congress for a $3 trillion overhaul of the nation’s infrastructure, Republicans have started trying to narrow the package’s ambitions to just roads, bridges and ports.On Monday, Biden will face some new pressure on the package, but from the left. Much of the Congressional Progressive Caucus is set to unveil the THRIVE Act, which would provide $10 trillion in federal infrastructure spending over the next decade, including massive investments in renewable energy, zero-emissions buildings and economic development in some of the worst-polluted parts of the country.”The THRIVE Act is the agenda that establishes the pillars for economic renewal in our country,” Sen. Ed Markey (D-Mass.), a lead sponsor of the Senate version of the bill, told HuffPost by phone. “This bill lays out a plan for massive job creation within the United States, so that a younger generation of Americans can think of these jobs as careers.”It seems likely that Democrats will be able to get some level of infrastructure through both chambers; even Sen. Joe Manchin (D-W.Va.), the most conservative Democrat in the Senate and a powerful swing vote, has signaled willingness to pass an infrastructure bill without Republican support. And Biden appears to be warming to calls to reform or scrap the filibuster, the Senate procedure requiring a 60-vote majority to pass most legislation. But the THRIVE Act ― a version of which former Rep. Deb Haaland (D-N.M.), who now serves as Biden’s interior secretary, introduced last year ― offers a broad progressive consensus on what an ambitious package should include. The bill is light on specifics but sets out a general framework for directing at least $1 trillion per year over the next decade to rapidly weaning the United States off fossil fuels and replacing corroded water systems, increasing benefits for home care workers, remediating toxic industrial sites, and propping up new, localized food producers, among other things. The bill lays out an expansive vision of how to slash the nation’s planet-heating emissions in half and balance the racial and regional gaps in wealth and health, issues that have animated the party’s base and inflected once-sleepy debates over roads and rail funding with the energy of a new-wave civil rights movement.
U.S. Infrastructure, Climate and Health Crises Deserve $10 Trillion Investment, Says AOC – Members of the Congressional Progressive Caucus made clear Wednesday that while President Joe Biden’s roughly $2.3 trillion infrastructure proposal is a welcome start, they believe the final package must be far more ambitious if it is to truly transform America’s fossil fuel-dominated energy system and bring the country into line with crucial climate targets.Rep. Alexandria Ocasio-Cortez (D-N.Y.) said in an appearance on MSNBC late Wednesday that ideally the top-line number would be around $10 trillion in spending on core infrastructure, renewable energy, healthcare improvements, and other key priorities over the next decade, a level of investment the New York Democrat presented as necessary to match the scale of the crises facing the country.”That may be an eye-popping figure for some people,” said Ocasio-Cortez, a leading Green New Deal advocate. “But we need to understand that we are in a devastating economic moment, millions of people in the United States are unemployed, we have a truly crippled healthcare system, and a planetary crisis on our hands – and we’re the wealthiest nation in the history of the world. So, we can do $10 trillion.” The chair of the Congressional Progressive Caucus, Rep. Pramila Jayapal (D-Wash.), issued a similar message in a statement released just ahead of Biden’s speech in Pittsburgh, where he sketched the broad outlines of his plan and promised “transformational progress in our effort to tackle climate change with American jobs and American ingenuity.””We believe this package can and should be substantially larger in size and scope,” said Jayapal. “During his campaign, President Biden committed to a ‘$2 trillion accelerated investment’ over four years on climate-focused infrastructure alone… Today’s proposal, which includes many other priorities such as care jobs, will invest half that amount – roughly $2 trillion over eight years – or 1% of GDP. It makes little sense to narrow his previous ambition on infrastructure or compromise with the physical realities of climate change.”The Washington Democrat went on to voice her caucus’ preference for a single, sweeping package encompassing infrastructure spending and health insurance expansions, child care and long-term care, and other measures, rather than two separate pieces of legislation. Biden is expected to unveil the healthcare-focused portion of his package – titled the American Families Plan – some time this month. “We believe that our country is ready for an even bolder, more comprehensive, and integrated plan that demonstrates the size, scope, and speed required to aggressively slash carbon pollution and avoid climate catastrophe; create millions of good, family-sustaining, union jobs; improve Americans’ health and safety; reduce racial and gender disparities; and curb income inequality by making the wealthy and large corporations finally pay their fair share in taxes,” said Jayapal.
Biden Convenes Cabinet for First Meeting, Tapping 5 Secretaries With Selling His Infrastructure Plan -President Biden held his first cabinet meeting on Thursday, a day after rolling out his $2 trillion infrastructure plan, with the socially distanced participants gathering in the East Room of the White House – a less cramped space than the Cabinet Room.The afternoon meeting came just over 10 weeks into Mr. Biden’s presidency, a period in which the Senate confirmed all of his cabinet secretaries and almost all of his nominees to other cabinet-level positions. Mr. Biden began by designating five cabinet secretaries – Secretary of Transportation Pete Buttigieg; Marcia L. Fudge, the housing secretary; Secretary of Commerce Gina Raimondo; Secretary of Energy Jennifer M. Granholm; and Martin J. Walsh, the labor secretary – to serve as his emissaries on infrastructure. “These cabinet members will represent me in dealing with Congress, engage the public in selling the plan and help work out the details as we refine it and move forward,” Mr. Biden said, perched at a rectangle of white-clothed tables that occupied much of the cavernous room.Mr. Biden, seeking to cement the inroads he made among voters in the industrial Midwest last fall, reiterated his intention to strengthen “Buy American” rules to encourage the use of domestic goods in federal projects. The president told his cabinet members “to take a hard look at their agency’s spending” to ensure taxpayer money was going to American workers and companies. After that, members of the news media were ushered out of the room. The gathering struck a different tone from the stilted cabinet meetings during President Donald J. Trump’s administration, when attendees showered him with praise. Mr. Biden, by contrast, was the only one who spoke during the brief period the news media was allowed in the room on Thursday. The sprawling setting, necessitated by the pandemic, gave the meeting the air of a formal diplomatic summit rather than an intimate huddle of advisers. The meeting lasted for about two hours, the White House said. Mr. Biden’s infrastructure proposal calls for spending in a variety of areas – including transportation, energy and housing – making a number of his cabinet members well positioned to help sell the plan in the coming months.
Democrats look to impose capital gains tax at death – Several Senate Democrats are pushing to boost federal revenue by taxing certain capital gains that are passed down after death. Traditionally, unrealized capital gains have not been taxed, allowing wealthy individuals to transfer stocks, bonds and real estate investments to their children and grandchildren without the recipients being taxed. Under current law, heirs don’t have to pay tax on the capital gains that were accrued by an asset or investment before they received it. They only have to pay capital gains taxes on an inherited asset after they sell it, and they only have to do so for the amount the asset or investment appreciated after it came into their possession. Democrats, led by Sens. Chris Van Hollen (D-Md.), say it’s time for that to change. Van Hollen has joined with Sens. Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.), Cory Booker (D-N.J.) and Sheldon Whitehouse (D-R.I.) to introduce a proposal to close what they call the “stepped-up basis loophole by taxing the unrealized capital gains of fortunes on which the original owner never paid income or capital gains taxes.” “The stepped-up basis loophole is one of the biggest tax breaks on the books, providing an unfair advantage to the wealthy heirs every year. This proposal will eliminate that loophole once and for all. It’s time to stop subsidizing massive inheritances for the rich and start investing in everyday Americans,” Van Hollen said in a statement Monday afternoon. Warren said it would close a loophole “on huge, inherited fortunes for the wealthiest Americans” and get “the wealthy and well-connected to pay their fair share.” The proposal would exempt $1 million in unrealized gains per individual or $2 million per couple from taxes. Currently, wealth that is passed on after death is only subject to the estate tax, for which there is a large exemption of more than $11 million per person or $22 million per couple. Under Van Hollen’s plan, a $1 million stock purchase made by a deceased individual in the year 2000 that had increased to $5 million by the year 2021, and thereby enjoyed a gain in value of $4 million, would be subject to a 23.8-percent tax on $3 million in unrealized capital gains. Such an amount would be subject to the top capital gains rate of 20 percent and the 3.8 percent net investment income tax that was enacted as part of the Affordable Care Act. If the asset were jointly held by a deceased couple, the tax would fall on $2 million in unrealized gains, with the other $2 million being exempt. “The exclusion applies to the deceased, not the heir. Each decedent gets $1 million exemption for unrealized capital gains,” said a Senate aide familiar with the proposal. Jim Kessler, executive vice president for policy at Third Way, a centrist Democratic think tank, said higher taxes on unrealized capital gains is likely to be a core component of the Democratic agenda under President Biden. “It is inevitable that Democrats are going to do something on unrealized gains, and stepped-up basis is a prime suspect for action,” he said. The White House is circulating a plan to raise $3.5 trillion in tax revenue over the next year to offset the cost of a potentially $4 trillion infrastructure plan.
How Britain’s ‘build back better’ plan went very, very wrong – Retrofitting homes is a key pillar of Joe Biden’s $2 trillion American Jobs Plan to “build back better” from the COVID-19 recession. The president urged Congress on Wednesday to mobilize $213 billion to “produce, preserve, and retrofit” more than a million homes for affordability and efficiency. In addition to creating jobs, energy efficiency measures like insulating roofs and walls and installing electric heating will save people money on their utility bills and reduce carbon emissions from the nation’s buildings.But the Biden administration would be wise to look across the pond for a cautionary tale before rolling out any such program too quickly.Last summer, U.K. Prime Minister Boris Johnson’s administration unveiled its own “build back better” economic stimulus package, which centered around a $2 billion program to retrofit England’s homes. The program was supposed to fund energy efficiency and clean heat upgrades in 600,000 homes, getting the country closer to net-zero emissions while creating 100,000 jobs, but it was canceled last week after a shambolic six-month run that may have killed more jobs than it spurred. “When it comes down to improving the energy efficiency of our homes, this is about the worst thing the government could have done,” Andrew McCausland, the director of a British contracting company, told the i, a daily newspaper. “It has destroyed confidence in the building business in taking on this work in the future.” Through Johnson’s Green Homes Grants program, or GHG, most U.K. homeowners and landlords could receive up to about $6,900 to help pay for insulation, electric heating systems, and various other energy-efficient fixes like new windows, doors, and heating controls. Low-income homeowners were eligible for up to nearly $14,000. The trouble began shortly after the grants became available at the end of September. In order to apply, building owners had to obtain a quote from an accredited installer, but few existed. Installers said they were reluctant to go through the time-consuming and expensive process of getting accredited without a longer-term assurance that there would be work. McCausland told the Guardian he spent $8,200 and an estimated 160 hours of unpaid work to get his employees accredited. Others said that navigating the process, which involved multiple certifications, was overly complicated, making it especially difficult for small companies with no administrative staff. Building professionals’ wariness was understandable – they had been burned before. In 2015, the U.K. government canceled a similar energy efficiency retrofit program after just two years, resulting in a steep drop in demand for this kind of work.
Biden address to Congress to be decided by Capitol physician: Pelosi – House Speaker Nancy Pelosi on Thursday said she’s waiting for the advice of the Capitol physician and the sergeant-at-arms before inviting President Biden to give his first address to a joint session of Congress.The California Democrat was asked about the timing of Biden’s initial address to Congress duringher weekly news conference.”That will be soon I hope,” Pelosi told reporters.Part of the decision, she said, depends on Dr. Brian Monahan, the current attending physician for Congress, and Maj. Gen. William Walker, the newly-named House sergeant-at-arms.They will be deciding how the address can be held safely amid the coronavirus pandemic, and how many people would be able to attend, Pelosi said.”We’ll await the advice of the Capitol physician, of the sergeant-at-arms, about how many people can be accommodated,” she said.”But whatever the number,” Pelosi added, “we’ll be ready whenever the president is ready to come. We’ll extend that invitation, which is the tradition.”Presidents typically make the speech in the first few weeks after entering the White House, but it is not called a “State of the Union” speech, which comes in the second year of the term.Biden, however, still has not set a date for the address. The date is picked in coordination with the White House, Pelosi said.She noted that this would be the first joint address to Congress since the coronavirus emerged, as former President Donald Trump’s last State of the Union was last February, before the pandemic hit.Pelosi also reminded reporters about how she dramatically ripped up a copy of Trump’s SOTU address at the end of that speech.
Thousands of migrant children remain detained in overflowing detention camps along southern US border – As of Tuesday, 4,100 migrants, most of whom are unaccompanied children, were being held in a Department of Homeland Security (DHS) holding facility in Donna, Texas that only has a capacity for 250 people. The conditions, which have been exposed by a recent visit by reporters sanctioned by the Biden administration, can only be described as a crime against humanity. Images of children lying side by side under foil blankets with only inches between them could be seen in a video taken within the camp. Children are being kept in eight “pods” consisting of 500 children each, crowded into cages lined with see-through plastic sheets. The pods only measure around 3,200 square feet and are housed in tents on hard floors with some mattresses. For reference, the average single-family home in the United States in 2019 was 2,301 square feet, according to the Census Bureau. Children, who are 14 years and older, are processed in an intake building, fingerprinted, photos taken, and then moved to another room where they are given notices to appear for immigration court. No testing for COVID-19 is being done in the camps except on symptomatic individuals. Illustrating the dire conditions in the camps, all shoelaces were removed by prison officials from child detainees in order to prevent self-harm, as is practiced regularly in US adult prisons. Immigrant advocates have said that there is no adequate access to soap or food. The horrific images emerging from the camps set up along the US-Mexico border come following the Biden administration’s preparations for the escalation of deportations, utilizing “Title 42” rules to claim concern for public health to push immigrants back south of the border. A DHS spokesman told the website Axios that the DHS is “working with our partners in Mexico to increase their capacity.” DHS Secretary Alejandro Mayorkas declared on March 21 that the “border is closed.” The first pictures from inside the camps during the Biden administration were leaked on March 22 following a visit by Texas Representative Henry Cuellar to the Donna camp. When Chuck Todd of NBC’s “Meet the Press” directly asked Mayorkas whether there was a block on media accessing DHS facilities, Mayorkas denied it, claiming, “We are also working on providing access so the American public can in a safe way, without jeopardizing our operations, see what is going on. We’re working on that.” When Mayorkas speaks of reporters “jeopardizing” DHS “operations,” he is speaking of the exposure of the systematic imprisonment and deportation of men, women and children fleeing poverty, war and dictatorship, much of which comes as a direct result of US imperialism’s operations in South and Central American countries pursued through Democratic and Republican administrations.
Asylum Is Not an Open Question – FOR WEEKS NOW, panels of pundits and teams of talking heads have vigorously debated whether permitting access to the United States’ asylum system is the right political choice for President Joe Biden; if it’s sensible to let desperate migrants fleeing the specter of death to be allowed to so much as apply for protections; if perhaps allowing asylum to effectively exist at all is just not smart. Mainstream journalists have for the most part nodded along, concurring implicitly or explicitly with the premise that these are difficult questions worth asking.In a representative example, Bush-era war fetishist and current Atlantic editor David Frum uncritically tweeted out “research” from the SPLC-designated hate group Center for Immigration Studies, claiming that asylum had “evolved into an immigration system for those the US would ordinarily refuse,” a statement so absurdly fatuous that it may be one of Frum’s greatest hits, along with his Iraq-WMD filth. He lamented that asylum provided a path for “ultra-low-skilled immigrants from Central American and Caribbean,” as if the purpose of humanitarian protections was economic gain, not to mention that many of these arrivals are literal children and that the U.S. economy would collapse overnight without supposedly low-skilled immigration.Discussions of asylum are often littered with such basic factual errors – Biden did not, for example, begin allowing unaccompanied minors to avoid expulsion; a court order mandated it with Trump still in office, and the new administration decided to voluntarily continue to observe that policy – but their purpose has never really been to inform. Instead, it’s to build and latch on to cyclical narratives, and the narrative du jour is one of crisis, how to “solve” the problem of non-citizens asking for help.This has been a bizarre conversation on a number of levels, not least because many interlocutors proceed from the assumption that permitting humanitarian migration is even a choice that the president gets to make. It is not: U.S. law lays out that any “alien . . . who arrives in the United States . . . irrespective of such alien’s status, may apply for asylum.” The statute enumerates certain exceptions, such as adults applying more than one year after entry and the existence of specific “safe third country” agreements (which formed another front in Trump’s efforts to gut asylum).
Honduras, Guatemala break up migrant caravan at behest of Biden administration – Hours after beginning its journey to the United States on Tuesday, a new caravan of Honduran refugees was broken up by Honduran and Guatemalan state forces. About 300 Honduran asylum seekers had joined the caravan, organized spontaneously on social media and by word of mouth, when the Honduran police set up roadblocks demanding negative COVID-19 tests and identification papers before ultimately dispersing the caravan. About 32 of the asylum seekers reached the Guatemalan border, where they were immediately turned back by the security forces. This is the third migrant caravan formed in Honduras since two major hurricanes devastated much of the country last November. Honduran police dissolved the first one in December, while the second caravan in late January was brutally repressed by Guatemalan troops with beatings, tear gas canisters and the use of other antiriot gear. The repression has not stopped smaller groups and families from reaching the US border, with the US Border Patrol apprehe-nding nearly 100,000 migrants in February alone. This is the biggest migrant surge in two decades, according to the US Department of Homeland Security. The Democratic administration of President Joe Biden has detained more than 16,000 unaccompanied refugee children in crowded and inhuman conditions, while it has continued the Trump policy of summarily deporting the vast majority of asylum-seekers, using the pretext of the COVID-19 pandemic. This has only served to scapegoat those fleeing a humanitarian disaster for the health care and social crisis within the United States itself. In the background of the assault on the latest caravan, US Vice President Kamala Harris, who was recently appointed by Biden to lead the response to the migration crisis, called Guatemalan President Alejandro Giammattei on Tuesday to effectively deliver marching orders for the crackdown on the refugees. The White House readout of the conversation speaks of US “efforts to increase humanitarian assistance” and “explore innovative opportunities to create jobs and to improve the conditions” in the region. It concludes with the true purpose of the call: “The Vice President also thanked President Giammattei for his efforts to secure Guatemala’s southern border.”
Did the Lockdown Cause More Suicides? – Menzie Chinn – A common assertion made by those opposed to public health measures such as lockdowns was that suicides were rising markedly – see e.g., Carney/Washington Examiner via AEI, Arthur Laffer and Stephen Moore, and blog commenters like sammy. The data are in. This article indicates suicides actually went down in 2020, 5.6% relative to 2019. Figure 1 shows a longer time series – raw statistics (on left log scale) and per million (on right scale). Figure 1: US Suicides (blue, left log scale), 1999-2016 log linear estimated trend (gray, left log scale), suicides per million (red, right scale). 2020 data is provisional. Source: CDC, Ahmed and Anderson (JAMA, 2021), BEA via FRED (POPTHM) for population, and author’s calculations. Suicides fall in 2020. Using a recursive 1-step ahead Chow test on growth rate of the suicide rate, there is a statistically significant (at greater than 1% MSL) decrease in 2020. Interestingly, suicides rise above log linear trend (estimated over 1999-2016) in 2017-18.
Is Dr. Fauci Trying to Steal the Credit for All the Vaccines Delivered by Operation Warp Speed? -by Lambert Strether – On Sunday Night, CNN ran a special, “Covid War: The Pandemic Doctors Speak Out ” (“Covid War”) which gave rise to the narrative embodied in the following headlines (which cross the political spectrum, from the Independent to the Daily Mail):
- Dr Fauci says it was him and not Trump who pioneered historic vaccine project Independent
- Fauci claims credit for COVID vaccines: ‘Best decision I’ve ever made’ New York Post
- Fauci says COVID-19 vaccine push could be ‘best decision’ he’s made FOXFauci gives Trump NO credit for Covid vaccine and claims jab was ‘best decision I’ve ever made’ Irish Sun
- After Downplaying Vaccine Prospect, Fauci Now Brags All Credit Goes to Him International Business Times
- ‘It was the best decision I ever made’: Dr. Fauci says it was him and NOT Trump who started the ball rolling to develop COVID vaccine and gives no credit to Operation Warp Speed Daily Mail
All these stories are basically wrappers for a Fauci quote from “Covid War,” which I’ll get to, and if you look carefully, the headlines are pretty vague. What does “pioneered” mean, and is OWS “the project”? What “decision” did Fauci make? What does “started the ball rolling” mean? So how much credit should we give Fauci? How much credit should we give to Operation Warp Speed? And what is the over-arching narrative that the Biden administration, through Fauci, and with the help of CNN, is trying to construct? First, let’s get the question Fauci’s role in Operation Warp Speed (OWS) out of the way. He had none. Here is the OWS organizational chart: Fauci appears nowhere on it, nor does his institutional base, the National Institute of Allergy and Infectious Diseases, of which he is Director. Of course, that doesn’t mean that Fauci did not interface or liaison with OWS. But he played no role within it. If you will look at the bottom middle of the chart, you will see the vaccine developers involved: Johnson and Johnson (Jannsen), Merck, Moderna, Novavax, Sanofi, AstraZenaca, and Pfizer (the agreement with Pfizer was for purchase only). Now let’s see what Fauci actually said on CNN. There are no clips up on the Internet yet, but here is a CNN transcript. The interview is Sanjay Gupta, chief medical correspondent for CNN:
The ‘COVID-industrial complex’ – a web of Big Pharma, Big Tech, and politicians – are profiting off the pandemic at the expense of the public – It has been over a year since the World Health Organization declared the coronavirus pandemic a public health emergency of international concern. The pandemic has left in its wake fear, death, and economic ruin to millions of people worldwide. However, for Big Pharma, Big Tech, outsourced corporates, management consultants, military outfits, politicians and their cronies, and a select number of scientists, life has been good. These individuals and organizations benefiting from the pandemic constitute what I call the COVID-industrial complex (CIC). The COVID-industrial complex is a transnational multi-billion dollar public-private partnership. It is a well-oiled machine, hence why it is only appropriate to add it to the select list of industrial complexes where “Businesses become entwined in social or political systems or institutions, creating or bolstering a profit economy from these systems.” Under this industrial complex, the government, which sits at the top of the food chain, uses its financial power to create an enabling environment that rewards other participants in the CIC. Some may justify the existence of the COVID-industrial complex because overspending and waste are permissible if it results in saved lives. Others may argue that capitalism rewards those who produce things that are rare and valuable. While there is nothing wrong with making a profit, there is something morally wrong when the excessive gain is made on the back of people’s misery, primarily when characterized by secrecy, overpricing, cronyism, inefficiency, and unfairness. Several COVID contracts have been awarded without a proper competitive tendering process. An investigation by USA Today on 15 of the states most impacted by the pandemic revealed over 1,600 COVID contracts with no competitive bids.Some of the contracts even went to vendors engaged in tax fraud. According to the National Audit Office, between March 2020 and July 2020, the British government awarded Pound Sterling10.5 billion (roughly $14.4 billion) in COVID contracts without a competitive tender process. NPR identified 250 companies that got COVID deals worth more than $1 million without going through a fully competitive bidding process. These companies included a company that imported vodka. In some instances, funds for COVID emergencies have been utilized for other uses, as in the case of the Pentagon, which diverted some of the $1 billion funds meant to build up the country’s supplies of medical equipment. Instead, the fund was channelled to defense contractors and used to produce jet engines, body armor, and uniforms.
Obscene global vaccine profiteering by pharmaceutical companies – Last week, British Prime Minister Boris Johnson told a private Zoom meeting of backbench Tory MPs, “The reason we have the vaccine success is because of capitalism, because of greed my friends … It was giant corporations that wanted to give good returns to shareholders. It was driven by big pharma.” His obscene comments sum up the response of the ruling elite to the pandemic – an opportunity for profiteering on a huge scale, aided and abetted by imperialist governments that have protected Big Pharma’s monopoly profits. The reality is that the pharmaceutical companies were initially not interested in vaccine development. Zain Rizvi of the advocacy group Public Citizen told the Financial Times that the “immense scarcity” of vaccines was directly attributable to Big Pharma being “missing in action” as the coronavirus pandemic took off. The drug companies had years ago cut back on vaccine research and development in favour of blockbuster drugs to treat cancer and rare diseases, though the likelihood of a pandemic had long been discussed. Even after the World Health Organisation (WHO) declared COVID-19 a pandemic on March 11 last year, three of the largest corporations, GSK, Sanofi and Merck, that dominated the vaccine market, were reluctant to get involved. They calculated that the pandemic would have run its course before a vaccine was ready and demonstrating once again the degree to which public health needs take second place to profits. As the BBC reported in December, “Initially firms didn’t rush in to fund vaccine projects. Creating vaccines, especially in the teeth of an acute health emergency, hasn’t proved very profitable in the past.” It was only after the governments of the European Union (EU), UK and US and agencies offered funding, including the main cost of running the “Phase 3” trials, assuming most of the risk in the process, that the industry started work on vaccine development, making rapid progress. The profit gouging also began in earnest. The US alone poured in an unprecedented $14 billion via Operation Warp Speed even though six of the Big Pharma, excluding Moderna, had combined revenues last year of $266 billion and profits of $46 billion, an 18 percent profit margin, and could easily have funded it themselves. While GSK, Sanofi and Merck received over $2 billion from the US government to support the production of vaccines, Merck pulled out after disappointing early test results. GSK and Sanofi are working jointly on a vaccine. According to the People’s Vaccine Alliance, they are largely sitting on the sidelines, planning to produce Covid-19 vaccines for only 1.5 per cent of the global population in 2021. Of the major vaccine producers, only Pfizer has a successful vaccine, produced jointly with the German company BioNTech using the new messenger RNA technology that requires storage at ultralow temperatures. The other major producers are new entrants to the field, the US-based biotech companies Moderna, whose vaccine also uses the RNA technology, and Novavax, whose vaccine can be stored in a normal refrigerator. Moderna, the most expensive vaccine, received $2.5 billion from the US government. The campaigning group Public Citizen argues that this means, “Taxpayers are paying for 100 percent of Moderna’s COVID-19 vaccine development. All of it.” With the US government subsequently buying or reserving up to 500 million doses, Moderna is likely to make a whopping $8 billion profit.
The rich-poor gap in America is obscene: the two richest people in America, Jeff Bezos and Elon Musk, now own more wealth than the bottom 40% of Americans combined. – The United States cannot prosper and remain a vigorous democracy when so few have so much and so many have so little. While many of my congressional colleagues choose to ignore it, the issue of income and wealth inequality is one of the great moral, economic and political crises that we face – and it must be dealt with. The unfortunate reality is that we are moving rapidly toward an oligarchic form of society, where a handful of billionaires have enormous wealth and power while working families have been struggling in a way we have not seen since the Great Depression. This situation has been exacerbated by the pandemic. Today, half of our people are living paycheck to paycheck, 500,000 of the very poorest among us are homeless, millions are worried about evictions, 92 million are uninsured or underinsured, and families all across the country are worried about how they are going to feed their kids. Today, an entire generation of young people carry an outrageous level of student debt and face the reality that their standard of living will be lower than their parents’. And, most obscenely, low-income Americans now have a life expectancy that is about 15 years lower than the wealthy. Poverty in America has become a death sentence. Meanwhile, the people on top have never had it so good. The top 1% now own more wealth than the bottom 92%, and the 50 wealthiest Americans own more wealth than the bottom half of American society – 165 million people. While millions of Americans have lost their jobs and incomes during the pandemic, over the past year 650 billionaires have seen their wealth increase by $1.3tn. The growing gap between the very rich and everyone else is nothing new. Over the past 40 years there has been a massive transfer of wealth from the middle class and working families to the very wealthiest people in America. In 1978, the top 0.1% owned about 7% of the nation’s wealth. In 2019, the latest year of data available, they own nearly 20%. Unbelievably, the two richest people in America, Jeff Bezos and Elon Musk, now own more wealth than the bottom 40% of Americans combined. If income inequality had not skyrocketed over the past four decades and had simply stayed static, the average worker in America would be earning $42,000 more in income each year. Instead, as corporate chief executives now make over 300 times more than their average employees, the average American worker now earns $32 a week less than he or she did 48 years ago – after adjusting for inflation. In other words, despite huge increases in technology and productivity, ordinary workers are actually losing ground.
GOP lawmakers ask Biden administration for guidance on reopening cruise industry — A group of Republican lawmakers led by Sen. Rick Scott (Fla.) sent a letter to White House Coronavirus Response Coordinator Jeffrey Zients last week asking that guidance be issued for the cruise industry to resume operations. In the letter, the lawmakers note that the Centers for Disease Control and Prevention (CDC) had issued a Framework for Conditional Sailing in October and last year, and said it would release detailed phases to reopen. “To-date, however, the CDC has still not issued Phase II requirements. We are disappointed that the CDC has been neither transparent nor forthright with the cruise industry, leaving a sector that is a significant economic driver for our states at a standstill, and affecting jobs in all major ports and surrounding cities,” the letter read. “The cruise industry has faced unique challenges amid this pandemic, and is one of the only industries that is completely precluded from resuming normal operations,” the letter continued. “This has created a dramatic negative ripple effect on the Florida and Alaskan families, businesses, ports and communities that rely on the cruise industry.” On Sunday, it was reported that the CDC had rejected an appeal from the Cruise Lines International Association to lift restrictions that would allow ships to start sailing again in July. The CDC maintained that the current plan to lift restrictions in November would remain in place, with a spokesperson adding that the next phases are currently under review. The Republican lawmakers who signed the letter included Sens. Marco Rubio (Fla.), Lisa Murkowski (Alaska) and Dan Sullivan (Alaska) along with Reps. Gus Bilirakis (Fla.), Mario Diaz-Balart (Fla.) and Carlos Gimenez (Fla.) among others. They requested that more details on the Framework for Conditional Sailing as well as an expected timeline for the cruise industry reopening. They also inquired about what conditions the CDC the administration was looking for in order for the cruise industry to resume business.
Biden extends PPP through May 31 –President Biden this week signed legislation extending the period small businesses have to apply for forgivable loans to help offset costs of the coronavirus pandemic, hailing it as a “bipartisan accomplishment.” Biden, in a brief Oval Office ceremony, said that he was proud to sign the legislation and that without it people would lose jobs. The legislation will extend the deadline for the Paycheck Protection Program to May 31 from March 31, giving businesses two additional months to apply. The legislation also provides the Small Business Administration an additional 30 days to process loans, in a bid to address longer wait times after the government began more strictly screening applications to prevent fraud. The program, established during the Trump administration, provides small businesses with fee-free federally backed loans. Expenses related to payroll, rent and operations expenditures can be forgiven, meaning many of the loans will convert into grants from the federal government. The SBA says it has approved more than 8.7 million loans valued at over $734 billion. Some $194.5 billion has already been forgiven by the government, according to the agency’s data. Earlier this year the Biden administration announced tweaks to the program, including a two-week exclusive application window for businesses with fewer than 20 employees and a new calculation formula for sole proprietors. The White House said those changes would help those who struggled to secure loans during early days of the program.
Q1 2021 Update: Unofficial Problem Bank list Increased to 67 Institutions — The FDIC’s official problem bank list is comprised of banks with a CAMELS rating of 4 or 5, and the list is not made public (just the number of banks and assets every quarter). Note: Bank CAMELS ratings are also not made public.CAMELS is the FDIC rating system, and stands for Capital adequacy, Asset quality, Management, Earnings, Liquidity and Sensitivity to market risk. The scale is from 1 to 5, with 1 being the strongest.As a substitute for the CAMELS ratings, surferdude808 is using publicly announced formal enforcement actions, and also media reports and company announcements that suggest to us an enforcement action is likely, to compile a list of possible problem banks in the public interest. Here is the unofficial problem bank list for Q1 2021. Here are the quarterly changes and a few comments from surferdude808: Update on the Unofficial Problem Bank List through March 26, 2020. Since the last update at the end of December 2020, the list increased by two to 67 institutions after five additions and three removals. Assets increased by $800 million to $59 billion, with the change including a $1.1 billion decrease from updated asset figures through December 31, 2020. A year ago, the list held 65 institutions with assets of $48.6 billion.Additions this month included Bank of the Orient, San Francisco, CA ($927 million); Southwestern National Bank, Houston, TX ($776 million); Lincoln 1st Bank, Lincoln Park, NJ ($314 million); Community First Bank, Maywood, NE ($127 million); and Spectra Bank, Fort Worth, TX ($92 million). Removals included Citizens Savings Bank and Trust Company, Nashville, TN ($112 million); The Morris County National Bank of Naples, Naples, TX ($94 million); and The First National Bank of Fleming, Fleming, CO ($25 million). Another change since year-end was the OCC issuing a Prompt Corrective Action order against The First National Bank and Trust Company of Vinita, Vinita, OK ($285 million).On February 23, 2021, the FDIC released third quarter results and an update on the Official Problem Bank List. In that release, the FDIC said there were 56 institutions with assets of $56 billion on the official list, compared with 56 institutions with assets of $53.9 billion at the third quarter of 2020.With the conclusion of the first quarter, we bring an updated transition matrix to detail how banks are transitioning off the Unofficial Problem Bank List. Since we first published the Unofficial Problem Bank List on August 7, 2009 with 389 institutions, 1,773 institutions have appeared on a weekly or monthly list since then. Only 3.8 percent of the banks that have appeared on a list remain today as 1,706 institutions have transitioned through the list. Departure methods include 1,005 action terminations, 411 failures, 271 mergers, and 19 voluntary liquidations. Of the 389 institutions on the first published list, only 3 or less than 1.0 percent, still have a troubled designation more than ten years later. The 411 failures represent 23.2 percent of the 1,773 institutions that have made an appearance on the list. This failure rate is well above the 10-12 percent rate frequently cited in media reports on the failure rate of banks on the FDIC’s official list.
Wells Fargo Aiming To Have Employees Back To Offices By September 6 — Iit looks as though Americans already have their hearts set on returning to normal life at some point during 2021. The same goes for small businesses, that are cautiously starting to re-open – and major corporations, who are beginning to require that employees start ebbing and flowing back to their respective offices. One such corporate entity is Wells Fargo, who announced on Tuesday this week that it plans on bringing its workers back to its offices after Labor Day, due to the “increasing availability of vaccines”. It’s almost like we have the pandemic under control, though don’t tell our CDC director that. The bank says it is hoping for operations to return to normalcy after September 6, according to Reuters. The bank says it is still evaluating whether or not to allow certain businesses or functional subgroups to return to work before labor day. Wells Fargo says that about 200,000 employees have been working from home, and about 60,000 from offices, during the pandemic. They are following the footsteps of Goldman Sachs, who said early this month that he was hoping to have employees back in their respective offices by the summer. Now might be a great time for businesses to head back into the office, as we pointed out a couple weeks ago that Manhattan office rents have plunged to their lowest levels since 2018. In February the average asking rent fell for an eighth straight month to $73.12 a square foot, the lowest since March 2018. And ensuring that prices will stay low for a long time, at the same time vacant space continues to pile up. The office availability rate rose for a ninth consecutive month to 15.5%, a record in data going back to 2000, the brokerage said; the amount of space listed by tenants for sublease jumped by 1.1 million square feet. In a stark testament to the post-pandemic world, leases were signed for less than 1 million square feet of Manhattan office space last month, a whopping 51% drop from January. Not surprisingly, the five biggest agreements were in Midtown.
Debit’s on a roll. Are small merchants getting rocked- – The dramatic shift to credit and debit card spending that occurred last year was a boon for cards and mobile wallets, but it left merchants paying more to handle payments that had previously been made with cash. It was especially a double-edged sword in Visa’s case; the card brand benefited from this shift, but also lost out on a substantial amount of travel spending once consumers and businesses entered lockdown. Debit fees were already under pressure from the Durbin amendment to 2010’s Dodd-Frank law, which capped swipe fees and instituted a requirement to allow merchants to use more than one network to route debit payments. Now the issue is whether that law has kept up with the times. “The big merchants certainly are using so-called smart routing to use PIN-debit networks when it is advantageous to them, but many smaller merchants don’t have the tech staff or the knowledge of payments to even understand their options,” said Sarah Grotta, director of debit and alternative products advisory service at Mercator Advisory Group. The Justice Department is looking into Visa’s debit card practices. While Visa could technically be in compliance with the Durbin amendment, merchants hope regulatory pressure could motivate Visa – which has the lion’s share of the debit card market – to revise its practices in merchants’ favor. Visa’s global debit volume increased 21% in the three months ended Dec. 31, 2020, over the same period a year earlier, while credit card spending volume declined 3%, Visa CEO Vasant Prabhu told analysts earlier this year. The timing isn’t great for Visa to defend itself against fresh antitrust allegations, just four months after the Justice Department declared Visa a “monopolist” in online debit when it sued the card network, ultimately forcing Visa to abandon its proposed $5.3 billion acquisition of the data aggregator Plaid. “Visa is back on its heels after the debacle that occurred in their attempt to acquire Plaid, in which Visa implicated itself in documents found by the DoJ showing Visa was at least considering some anticompetitive action,” Grotta said. With smaller merchants struggling to recover from the pandemic and online debit transaction volume persisting well above pre-pandemic levels, the Justice Department could pressure Visa to open a path to help small businesses lower their processing costs, Grotta said. It’s not just smaller merchants complaining about Visa misusing its market power to drive more online debit volume to its network. Larger merchants with deeper technical resources have other complaints about how Visa influences debit card routing for both online signature (PINless) debit versus lower-cost debit transactions requiring a PIN. “Visa is pressuring larger card issuers to not enable PINless debit through various routing volume agreements and other incentive contracts,” said Robert Yeakel, director of government relations for the National Grocers Association, a Washington-based nonprofit representing more than 1,500 independent supermarket operators.
CFPB ends Trump-era regulatory relief tied to pandemic – The Consumer Financial Protection Bureau is rescinding seven policy statements issued last year under the Trump administration that gave flexibility to financial institutions dealing with fallout from the coronavirus pandemic. The agency said effective April 1 it would undo relief from resolving credit card billing disputes, flexibility on exams and enforcement, and a reprieve from submitting loan data under the Home Mortgage Disclosure Act, among other policies. “Providing regulatory flexibility to companies should not come at the expense of consumers,” acting CFPB director Dave Uejio said in a news release. “Because many financial institutions have developed more robust remote capabilities and demonstrated improved operations, it is no longer prudent to maintain these flexibilities. The CFPB’s first priority, today and always, is protecting consumers from harm.” The CFPB added in the release that by winding down the seven policy statements, the agency “is providing notice that it intends to exercise the full scope of the supervisory and enforcement authority provided under the Dodd-Frank Act.” The policy decisions made under former CFPB Director Kathy Kraninger were published between March 26 and June 3 of last year and offered supervisory and enforcement relief to institutions in light of the pandemic. Among the policies the agency is walking back is guidance to institutions that the CFPB would take into account any COVID-19-induced staffing shortages or lack or resources in its supervision and enforcement efforts. In that guidance, the CFPB also said it would “be sensitive to good-faith efforts demonstrably designed to assist consumers.” A month later, it conveyed the same message to consumer reporting agencies. It is now rescinding both statements.
CFPB poised to reinstate tough stance on payday lenders – The Consumer Financial Protection Bureau is giving its clearest signal yet that a 2020 regulation easing standards for payday lenders is in jeopardy, despite efforts already in motion by the industry to implement the Trump administration rule. Acting CFPB Director Dave Uejio – appointed by the Biden administration to lead the agency following Kathy Kraninger’s resignation – offered his most forceful comments to date on the 2020 rule, which eliminated underwriting requirements for small-dollar lenders. Uejio stated in a blog post that the bureau’s new leadership supports the “ability-to-repay” standards, originally established in a previous 2017 rule that was unwound by Kraninger, signaling that the agency will reinstate them. But he went even further by suggesting that the CFPB plans to crack down on payday and auto title lenders by using its enforcement authority under the Dodd-Frank Act to punish companies that violate the federal prohibition on “unfair, deceptive or abusive acts or practices.” “The CFPB is acutely aware of consumer harms in the small dollar lending market, and is particularly concerned with any lender’s business model that is dependent on consumers’ inability to repay their loans,” Uejio said. “Years of research by the CFPB found the vast majority of this industry’s revenue came from consumers who could not afford to repay their loans, with most short-term loans in reborrowing chains of 10 or more.” Uejio made the comments last week, just a day after the CFPB filed a motion accompanying a lawsuit challenging the 2020 payday rule. Though the agency appears intent to overturn the rule, the CFPB’s motion argued the plaintiff, the nonprofit National Association for Latino Community Asset Builders, lacks standing to bring the lawsuit because its members are not regulated by the CFPB. In explaining why the CFPB filed the motion to dismiss, Uejio stressed that the bureau continues to push for the ability-to-repay standard in underwriting. “The Bureau had a legal obligation to respond to the lawsuit,” Uejio said. “The Bureau’s filing should not be regarded as an indication that the Bureau is satisfied with the status quo in this market. To the contrary, the Bureau believes that the harms identified by the 2017 rule still exist, and will use the authority provided by Congress to address these harms, including through vigorous market monitoring, supervision, enforcement, and, if appropriate, rulemaking.” Some experts said that until the bureau takes further action, payday and auto lenders can still rely on last year’s rulemaking that rescinded ability-to-repay requirements on small-dollar loans of 45 days or less. “The industry relies on validly adopted regulations, including the 2020 repeal, and is entitled to arrange its affairs in accordance with those regulations and not to be cowed by the blog entries of an interim director,” said Hilary Miller, a Greenwich, Conn., attorney representing payday lenders and past president of the Payday Loan Bar Association. The CFPB also may use its enforcement authority to aggressively pursue UDAAP violations in areas other than underwriting such as marketing, debt collection, or dealing with limited-English-proficiency borrowers.
Mortgage Firms Warned to Prepare for a ‘Tidal Wave’ of Distress – Mortgage companies could face penalties if they don’t take steps to prevent a deluge of foreclosures that threatens to hit the housing market later this year, a U.S. regulator said Thursday. The Consumer Financial Protection Bureau warning is tied to forbearance relief that’s allowed million of borrowers to delay their mortgage payments due to the pandemic. To avoid what the bureau called “avoidable foreclosures” when the relief lapses, mortgage servicers should start reaching out to affected homeowners now to advise them on ways they can modify their loans. “There is a tidal wave of distressed homeowners who will need help,” Dave Uejio, the CFPB’s acting director, said in a statement. “Servicers who put struggling families first have nothing to fear from our oversight, but we will hold accountable those who cause harm to homeowners and families.” In a separate compliance bulletin released Thursday, the CFPB said that companies “that are unable to adequately manage loss mitigation can expect the bureau to take enforcement or supervisory action.” More than 2 million borrowers as of January had either postponed their payments or failed to make them for at least three months, the bureau said. Once government-authorized forbearance plans begin to end in September, hundreds of thousands of people may need assistance getting back on track.
Fannie Mae: Mortgage Serious Delinquency Rate Decreased in February –Fannie Mae reported that the Single-Family Serious Delinquency decreased to 2.76% in February, from 2.80% in January. The serious delinquency rate is up from 0.65% in February 2020. These are mortgage loans that are “three monthly payments or more past due or in foreclosure”.The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59% following the housing bubble, and peaked at 3.32% in August 2020 during the pandemic.By vintage, for loans made in 2004 or earlier (2% of portfolio), 5.90% are seriously delinquent (up from 5.87% in January). For loans made in 2005 through 2008 (2% of portfolio), 10.01% are seriously delinquent (up from 9.98%), For recent loans, originated in 2009 through 2021 (96% of portfolio), 2.29% are seriously delinquent (down from 2.32%). So Fannie is still working through a few poor performing loans from the bubble years.Mortgages in forbearance are counted as delinquent in this monthly report, but they will not be reported to the credit bureaus. This is very different from the increase in delinquencies following the housing bubble. Lending standards have been fairly solid over the last decade, and most of these homeowners have equity in their homes – and they will be able to restructure their loans once they are employed.
MBA Survey: “Share of Mortgage Loans in Forbearance Decreases to 4.96%” –Note: This is as of March 21st. From the MBA: Share of Mortgage Loans in Forbearance Decreases to 4.96%: The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 9 basis points from 5.05% of servicers’ portfolio volume in the prior week to 4.96% as of March 21, 2021. According to MBA’s estimate, 2.5 million homeowners are in forbearance plans….”The share of loans in forbearance decreased for the fourth straight week, dropping below 5 percent for the first time in a year. New forbearance requests remained at their lowest level since last March, and the pace of exits increased,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “More than 17 percent of borrowers in forbearance extensions have now exceeded the 12-month mark.”Fratantoni added, “Many homeowners need this support, even as there are increasing signs that the pace of economic activity is picking up as the vaccine rollout continues. Those who have an ongoing hardship due to the pandemic and want to extend their forbearance beyond the 12-month point need to contact their servicer. Servicers cannot automatically extend forbearance terms without the borrower’s consent.”This graph shows the percent of portfolio in forbearance by investor type over time. Most of the increase was in late March and early April, and has trended down since then.The MBA notes: “Total weekly forbearance requests as a percent of servicing portfolio volume (#) remained flat relative to the prior week at 0.05%, the lowest level since the week ending March 15, 2020.”
Black Knight: Number of Homeowners in COVID-19-Related Forbearance Plans Decreased – Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance.This data is as of March 30th.From Black Knight: Servicers Continue to Work Through Forbearance Plans as U.S. Enters Fifth Consecutive Week of Improvement: The country saw yet another week of forbearance improvement this week, with active plans falling by 33,000 (-1.3%). This marks the fifth consecutive week of improvement and the longest such stretch since September 2020.Weekly declines were seen across investor classes, with GSE plans down 15,000, FHA/VA plans down 12,000, and plan volumes among portfolio/PLS mortgages falling by 6,000 for the week. This week’s improvement has pushed the number of active plans down by 172,000 (-6.3%) from last month, the largest such M/M improvement since November 2020. As of March 30, there are now 2.54 million active forbearance plans, representing 4.8% of all active mortgages. As anticipated, these improvements were driven by the large volume of forbearance plan reviews taking place in recent weeks. Entering March, 1.2 million plans were scheduled for review for removal/extension during the month; as of March 30, some 300,000 such scheduled expirations remain, with another 655,000 on tap for April. These numbers suggest we could see continued improvement in coming weeks as servicers continue to review plans with scheduled expirations for removal or extension.We’ll have another forbearance update published here on this blog next Friday, April 9. The number of loans in forbearance has slowly declined over the last few months.
MBA: Mortgage Applications Decrease in Latest Weekly Survey From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey: Mortgage applications decreased 2.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 26, 2021. … The Refinance Index decreased 3 percent from the previous week and was 32 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 39 percent higher than the same week one year ago. “After seven consecutive weeks of increasing mortgage rates, the 30-year fixed rate declined 3 basis points to 3.33 percent, which is still almost half a percentage point higher than the start of this year. Mortgage applications for refinances and home purchases both declined, but purchase activity was still convincingly higher than the pandemic-induced drop seen a year ago, as well as up 6 percent from the same week in March 2019,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Many prospective homebuyers this spring are feeling the effects of higher rates and rapidly accelerating home prices. Record-low inventory is pushing home-price growth at double the rate from a year ago, and even above the 10 percent growth rates seen in 2005. The housing market is in desperate need of more inventory to cool price growth and preserve affordability.” Added Kan, “Higher mortgage rates continue to shut down refinance activity, as the pool of borrowers who can benefit from a refinance further shrinks.”… The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.33 percent from 3.36 percent, with points decreasing to 0.39 from 0.42 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.The first graph shows the refinance index since 1990. With low rates, the index remains elevated, but falling as rates rise. The second graph shows the MBA mortgage purchase index
CDC extends coronavirus eviction ban through June 30 –The Centers for Disease and Control and Prevention (CDC) on Monday announced that it has extended a federal ban on coronavirus-related evictions through June 30, three days before it was set to expire. “The COVID-19 pandemic has presented a historic threat to the nation’s public health. Keeping people in their homes and out of crowded or congregate settings – like homeless shelters – by preventing evictions is a key step in helping to stop the spread of COVID-19,” said CDC Director Rochelle Walensky in a Monday statement. Walensky on Sunday signed an order to postpone the March 31 expiration of the CDC eviction ban, the agency announced Monday. The CDC in September prohibited evictions of renters – individuals who expected to make less than $99,000 in 2020 and couples filing jointly looking at less than $198,000 – if they failed to pay rent due to a pandemic-related job loss or expense. Housing advocates had urged the Biden administration to extend the eviction ban with the U.S. still at least several months away from containing the COVID-19 pandemic. More than 10 million Americans are facing housing insecurity, 5.4 million expect to face eviction or foreclosure soon, and more than 78 million said they’re having trouble covering basic expenses, according to a Census Bureau survey conducted earlier this month. While inconsistent legal interpretations by state judges and logistical challenges have limited the reach of the CDC ban, experts say it has prevented millions of Americans from homelessness during the pandemic. The 90-day extension could give struggling households sorely needed time to find work and begin digging out from the financial hole created by the pandemic. Those protected by the ban are still responsible for paying rent and fees that accrued on it during the moratorium, and many will likely need federal assistance to cover those costs. The Biden administration has been racing to disburse nearly $40 billion in aid to cover rent and utilities payments owed by struggling households. Treasury Secretary Janet Yellen told lawmakers last week that the department has distributed rental aid to state, local and tribal grantees, and would work on new guidelines to clear up confusion about the relief program’s rules.
FHFA House Price Index: Up 1.0% in January The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for January. Here is the opening of the press release: House prices rose nationwide in January, up 1.0 percent from the previous month, according to the latest Federal Housing Finance Agency House Price Index (FHFA HPI). House prices rose 12.0 percent from January 2020 to January 2021. The previously reported 1.1 percent price change for December 2020 was revised upward to 1.2 percent. For the nine census divisions, seasonally adjusted monthly house price changes from December 2020 to January 2021 ranged from -0.2 percent in the East South Central division to +1.5 percent in the Mountain division. The 12-month changes ranged from +10.2 percent in the West South Central division to +14.8 percent in the Mountain division. “While house prices experienced historic growth rates in 2020 and into the new year, the monthly gains appear to be moderating” said Dr. Lynn Fisher, FHFA’s Deputy Director of the Division of Research and Statistics. “House prices increased by 1.0 percent in January, which is relatively still high, but represents the smallest month-over-month gain since June 2020.” The chart below illustrates the monthly HPI series, which is not adjusted for inflation, along with a real (inflation-adjusted) series using the Consumer Price Index: All Items Less Shelter. In the chart above we see that the nominal HPI index has exceeded its pre-recession peak of what’s generally regarded to have been a housing bubble. Adjusted for inflation, the index is now at 174.9, also at its all-time high.
Case-Shiller: National House Price Index increased 11.2% year-over-year in January – S&P/Case-Shiller released the monthly Home Price Indices for January (“January” is a 3 month average of November, December and January prices). This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index. From S&P: S&P Corelogic Case-Shiller Index Reports 11.2% Annual Home Price Gain to Start 2021 The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported an 11.2% annual gain in January, up from 10.4% in the previous month. The 10-City Composite annual increase came in at 10.9%, up from 9.9% in the previous month. The 20-City Composite posted an 11.1% year-over-year gain, up from 10.2% in the previous month.Phoenix, Seattle, and San Diego continued to report the highest year-over-year gains among the 20 cities in January. Phoenix led the way with a 15.8% year-over-year price increase, followed by Seattle with a 14.3% increase and San Diego with a 14.2% increase. All 20 cities reported higher price increases in the year ending January 2021 versus the year ending December 2020….Before seasonal adjustment, the U.S. National Index posted a 0.8% month-over-month increase, while the 10-City and 20-City Composites both posted increases of 0.8% and 0.9% respectively in January. After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.2%, and the 10-City and 20-City Composites both posted increases of 1.2% as well. In January, 19 of 20 cities reported increases before seasonal adjustment, and all 20 cities reported increases after seasonal adjustment. The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000).The National index is 28% above the bubble peak (SA), and up 1.2% (SA) in January. The National index is up 75% from the post-bubble low set in December 2011 (SA). The second graph shows the year-over-year change in all three indices. Note: According to the data, prices increased in 20 cities month-over-month seasonally adjusted. Price increases were above expectations.
NAR: Pending Home Sales Decrease 10.6% in February –From the NAR: Pending Home Sales Slip 10.6% in February — Pending home sales dipped for a second straight month in February, according to the National Association of Realtors. Each of the four major U.S. regions witnessed month-over-month declines in February, while results were mixed in the four regions year-over-year. The Pending Home Sales Index (PHSI), a forward-looking indicator of home sales based on contract signings, dropped 10.6% to 110.3 in February. Year-over-year, contract signings fell 0.5%. An index of 100 is equal to the level of contract activity in 2001. … The Northeast PHSI fell 9.2% to 92.3 in February, a 3.9% dip from a year ago. In the Midwest, the index dropped 9.5% to 102.4 last month, down 6.1% from February 2020. Pending home sales transactions in the South declined 13.0% to an index of 133.2 in February, up 2.9% from February 2020. The index in the West fell 7.4% in February to 96.9, up 1.9% from a year prior. This was well below expectations for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in March and April.
Construction Spending decreased 0.8% in February –From the Census Bureau reported that overall construction spending decreased: Construction spending during February 2021 was estimated at a seasonally adjusted annual rate of $1,516.9 billion, 0.8 percent below the revised January estimate of $1,529.0 billion. Both private and public spending decreased: Spending on private construction was at a seasonally adjusted annual rate of $1,165.7 billion, 0.5 percent below the revised January estimate of $1,171.6 billion. … In February, the estimated seasonally adjusted annual rate of public construction spending was $351.2 billion, 1.7 percent below the revised January estimate of $357.4 billion. This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted. Residential spending is 6% above the bubble peak (in nominal terms – not adjusted for inflation).Non-residential spending is 8% above the previous peak in January 2008 (nominal dollars), but has been weak recently. Public construction spending is 8% above the previous peak in March 2009, and 34% above the austerity low in February 2014. The second graph shows the year-over-year change in construction spending.On a year-over-year basis, private residential construction spending is up 21.1%. Non-residential spending is down 9.7% year-over-year. Public spending is down slightly year-over-year. Construction was considered an essential service in most areas and did not decline sharply like many other sectors, but it seems likely that non-residential will be under pressure. For example, lodging is down 24% YoY, multi-retail down 33% YoY, and office down 5% YoY. This was slightly above consensus expectations of a 0.9% decrease in spending, and construction spending for the previous two months was revised up.
Hotels: Occupancy Rate Down 17% Compared to Same Week in 2019 — Note: Starting last week, the year-over-year comparisons are easy – since occupancy declined sharply at the onset of the pandemic – but occupancy is still down significantly from normal levels. The occupancy rate is down 16.7% compared to the same week in 2019. From CoStar: STR: US Hotels Achieve 83% of 2019 Occupancy for Week of March 27: U.S. weekly hotel occupancy fell one point from the previous week, according to STR’s latest data through March 27.
March 21-27, 2021:
Occupancy: 57.9%
Average daily rate (ADR): US$108.31
Revenue per available room (RevPAR): US$62.68
The 57.9% absolute occupancy was a 160.8% increase from the comparable, pandemic-affected week last year, but more importantly, represented more than 83% of occupancy regained from the 2019 benchmark. More than 21 million rooms were sold for the second week in a row, however, it was the first time in four weeks that the metric fell week over week, which is indicative of softening in the spring break demand that had boosted levels previously.The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average. The red line is for 2021, black is 2020, blue is the median, and dashed light blue is for 2009 (the worst year since the Great Depression for hotels prior to 2020). Even when occupancy increases to 2009 levels, hotels will still be hurting.
Consumer Confidence Highest in a Year — The headline number of 109.7 was an increase of 19.3 from the final reading of 90.4 for February. This was above theInvesting.com consensus of 96.9. “Consumer Confidence increased to its highest level since the onset of the pandemic in March 2020,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions and their short-term outlook improved significantly, an indication that economic growth is likely to strengthen further in the coming months. Consumers’ renewed optimism boosted their purchasing intentions for homes, autos and several big-ticket items. However, concerns of inflation in the short-term rose, most likely due to rising prices at the pump, and may temper spending intentions in the months ahead.” Read more The chart below is another attempt to evaluate the historical context for this index as a coincident indicator of the economy. Toward this end, we have highlighted recessions and included GDP. The regression through the index data shows the long-term trend and highlights the extreme volatility of this indicator. Statisticians may assign little significance to a regression through this sort of data. But the slope resembles the regression trend for real GDP shown below, and it is a more revealing gauge of relative confidence than the 1985 level of 100 that the Conference Board cites as a point of reference.
ISM Manufacturing index Increased to 64.7% in March – The ISM manufacturing index indicated expansion in March. The PMI was at 64.7% in March, up from 60.8% in February. The employment index was at 59.6%, up from 54.4% last month, and the new orders index was at 68.0%, up from 63.2%.From ISM: Manufacturing PMI at 64.7%; March 2021 Manufacturing ISM Report On Business “The March Manufacturing PMI registered 64.7 percent, an increase of 3.9 percentage points from the February reading of 60.8 percent. This figure indicates expansion in the overall economy for the 10th month in a row after contraction in April. The New Orders Index registered 68 percent, up 3.2 percentage points from the February reading of 64.8 percent. The Production Index registered 68.1 percent, an increase of 4.9 percentage points compared to the February reading of 63.2 percent. The Backlog of Orders Index registered 67.5 percent, 3.5 percentage points above the February reading of 64 percent. The Employment Index registered 59.6 percent, 5.2 percentage points higher than the February reading of 54.4 percent. The Supplier Deliveries Index registered 76.6 percent, up 4.6 percentage points from the February figure of 72 percent. The Inventories Index registered 50.8 percent, 1.1 percentage points higher than the February reading of 49.7 percent. The Prices Index registered 85.6 percent, down 0.4 percentage point compared to the February reading of 86 percent. The New Export Orders Index registered 54.5 percent, a decrease of 2.7 percentage points compared to the February reading of 57.2 percent. The Imports Index registered 56.7 percent, a 0.6-percentage point increase from the February reading of 56.1 percent.” This was above expectations.This suggests manufacturing expanded at a faster pace in March than in February.
March Markit Manufacturing: “March PMI at second-highest on record amid marked new order growth and supply chain disruptions” — The March US Manufacturing Purchasing Managers’ Index conducted by Markit came in at 59.1, up 0.5 from the 58.6 final February figure. Here is an excerpt from Chris Williamson, Chief Business Economist at IHS Markit in their latest press release: “March saw manufacturers struggle to cope with surging inflows of new orders. Although output continued to rise at a solid pace, capacity is being severely strained by the combination of soaring demand and supply chain disruptions: supply chain delays and backlogs of uncompleted orders are growing at rates unprecedented in the survey’s 14-year history, meaning inventories of finished goods are falling at a steep rate.“Pricing power has risen accordingly as demand outstrips supply: raw material prices are increasing at the sharpest rate for a decade and factory gate selling prices have risen to a degree not seen since at least 2007.“The fastest rates of increasefor both new orders and prices was reported among producers of consumer goods, as the arrival of stimulus cheques in the post added fuel to a marked upswing in demand as the economy continued to pull out of the malaise caused by the pandemic.“With business expectations becoming even more optimistic in March, further strong production growth looks likely in the second quarter, but the big question will be whether rising price pressures also become more entrenched.” [Press Release] Here is a snapshot of the series since mid-2012.
ISM manufacturing at multi-decade highs in March, while construction chilled in the February Big Texas Freeze – Two months ago I wrote that both the manufacturing and housing sectors were “on fire.” Then last month I wrote that they had “turned white hot,” with both construction spending and ISM manufacturing data at levels not seen in years. While construction backed off, manufacturing is even … well, hotter than white hot? The overall ISM manufacturing reading rose from 60.8 to 64.7, the highest reading since 1984! The even more leading new orders subindex also rose from 64.8 to 68.0, the highest reading since 2004: Turning to construction, the Big Texas Freeze showed up in February spending for residential construction, which declined -0.2% for the month, while total construction spending declined -0.8%:Taking into account inflation – deflating by the PPI for construction materials – neither residential construction spending nor overall construction spending is anywhere near their housing bubble levels of 2005: While I am concerned about 2022, as I described yesterday, this year is likely going to be absolutely gangbusters for residential construction spending, which means lots more money flowing through the economy as a whole. In short, this morning’s two reports together show that manufacturing and housing, the two most important leading sectors of the real economy, remain likely to power very strong GDP gains this year.
Dallas Fed: “Texas Manufacturing Activity Accelerates Sharply” in March –From the Dallas Fed: Texas Manufacturing Activity Accelerates Sharply: Texas factory activity expanded at a markedly faster pace in March, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, surged 28 points to 48.0, its highest reading in the survey’s 17-year history. Other measures of manufacturing activity also pointed to sharply faster growth this month. The new orders index rose 18 points to 30.5, and the growth rate of orders index rose 11 points to 22.7. The capacity utilization index rocketed from 16.5 to 46.1, an all-time high. The shipments index rose 17 points to 33.1.Perceptions of broader business conditions improved markedly in March. The general business activity index posted another double-digit increase, rising 12 points to 28.9. The company outlook index shot up 15 points to 25.8, its highest reading since mid-2018. The outlook uncertainty index edged down to 5.5.Labor market measures indicated robust growth in employment and work hours. The employment index came in at 18.8, up from 12.7 and well above average.This was the last of the regional Fed surveys for March.Here is a graph comparing the regional Fed surveys and the ISM manufacturing index: The New York and Philly Fed surveys are averaged together (yellow, through March), and five Fed surveys are averaged (blue, through March) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through February (right axis).The ISM manufacturing index for March will be released on Thursday, April 1st. Based on these regional surveys, the ISM manufacturing index will likely increase from the February level (the consensus is for an increase to 61.2 from 60.8 in February).
Chicago PMI Highest Since July 2018 – The Chicago Business Barometer, also known as the Chicago Purchasing Manager’s Index, is similar to the national ISM Manufacturing indicator but at a regional level and is seen by many as an indicator of the larger US economy. It is a composite diffusion indicator, made up of production, new orders, order backlogs, employment, and supplier deliveries compiled through surveys. Values above 50.0 indicate expanding manufacturing activity.The latest Chicago Purchasing Manager’s Index, or the Chicago Business Barometer, jumped to 66.3 in March from 59.5 in February, which is in expansion territory and its highest since July 2018. Values above 50.0 indicate expanding manufacturing activity.Here is an excerpt from the press release:The Chicago Business BarometerTM, produced with MNI, rose to 66.3 in March, the highest level since July 2018. Through Q1 the index gained 4.4 points to 63.2, the strongest reading since Q3 2018. Among the main five indicators, Production saw the largest gain, while Order Backlogs saw the biggest drop. [Source] Let’s take a look at the Chicago PMI since its inception.
March Regional Fed Manufacturing Overview – Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. Regional manufacturing surveys are a measure of local economic health and are used as a representative for the larger national manufacturing health. They have been used as a signal for business uncertainty and economic activity as a whole. Manufacturing makes up 12% of the country’s GDP.The other 6 Federal Reserve Districts do not publish manufacturing data. For these, the Federal Reserve’s Beige Book offers a short summary of each districts’ manufacturing health. The Chicago Fed published their Midwest Manufacturing Index from July 1996 through December of 2013. According to their website, “The Chicago Fed Midwest Manufacturing Index (CFMMI) is undergoing a process of data and methodology revision. Significant revisions in the history of the CFMMI are anticipated.”Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. The latest average of the five for March is 28.2, up from the previous month’s 18.1. The average is currently at its all-time high.
Weekly Initial Unemployment Claims increased to 719,000 –The DOL reported:In the week ending March 27, the advance figure for seasonally adjusted initial claims was 719,000, an increase of 61,000 from the previous week’s revised level. The previous week’s level was revised down by 26,000 from 684,000 to 658,000. The 4-week moving average was 719,000, a decrease of 10,500 from the previous week’s revised average. This is the lowest level for this average since March 14, 2020 when it was 225,500. The previous week’s average was revised down by 6,500 from 736,000 to 729,500.This does not include the 237,025 initial claims for Pandemic Unemployment Assistance (PUA) that was down from 241,137 the previous week. The following graph shows the 4-week moving average of weekly claims since 1971. The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 719,000.The previous week was revised down.Regular state continued claims decreased to 3,794,000 (SA) from 3,840,000 (SA) the previous week.Note: There are an additional 7,349,663 receiving Pandemic Unemployment Assistance (PUA) that increased from 7,844,867 the previous week (there are questions about these numbers). This is a special program for business owners, self-employed, independent contractors or gig workers not receiving other unemployment insurance. And an additional 5,515,355 receiving Pandemic Emergency Unemployment Compensation (PEUC) down from 6,220,492. Weekly claims were higher than the consensus forecast.
US weekly combined unemployment claims spike above 950,000 – The latest Department of Labor first-time unemployment claims report revealed an increase of 61,000 state claims compared to the prior week, bringing the weekly total to over 719,000.In addition to the 719,000 state claims, the report also revealed another 237,025 initial claims were filed under the Pandemic Unemployment Assistance program (PUA), created under the CARES Act. This brought the combined state and federal claims to 951,548, nearly four times the pre-pandemic average of 225,000 claims. The PUA program, designed for self-employed, contract, and so-called “gig” workers, along with the Pandemic Emergency Unemployment Compensation (PEUC) program, will both expire in September, barring congressional action. Out of the 18.2 million workers that were claiming some form of unemployment assistance in mid-March, nearly 7,350,000 of those continuing claims were filed under PUA, while roughly 5,515,000 claims were for the PEUC program.Despite efforts from Republican and Democratic governors alike to abandon limited lockdowns and health and safety measures in the interests of “reopening the economy” and generating profits for the ruling class, the stubbornly high claims showed that millions are struggling to find permanent, steady and well-paying work.After limited lockdowns were implemented and then abandoned last spring, some 22 million jobs were lost. One year later, roughly 9 million have yet to return. While trillions of dollars have been made available for Wall Street speculators, large multinational corporations and the politically well-connected, millions of jobless workers and their families remain on the brink of destitution and homelessness. For those that have found work, it has generally been part-time and transitory, such as rideshare, grocery shopping and food delivery services, which also lack steady wages and benefits compared to “traditional” employment.While millions remain out of work, April’s job report is expected to show an increase in employment upwards of 500,000. However, the majority of these jobs are centered in the low-paying service, restaurant, travel and hospitality industries, which have been decimated due to COVID-19 induced lockdowns. A February report from McKinsey & Company illustrated the character of the unequal “recovery” in the US. Their research found that the total unemployment rate among those who make under $30,000 a year was at 17.34 percent as of February 2021, compared to only 3 percent for those who reported earning above $150,000.For workers earning between $30,000 and $50,000 total unemployment was at 9.32 percent, while those who made between $99,000 and $150,000 were recorded at only 3.24 percent. The increased employment rate for the working class tracks with statistics provided by the Federal Reserve last month which estimated that the real jobless rate was between 9 and 10 percent. While the DOL report found that the overall total of 18.2 million workers claiming unemployment decreased by over 1.5 million from the week prior, this was not an indication that over a million workers found jobs. Instead, state benefits continue to expire, forcing the unemployed to apply for assistance through federal programs. In addition to expiring eligibility requirements, several state governments are reimposing job search requirements in an attempt to blackmail workers back into dangerous job sites.
ADP: Private Employment increased 517,000 in March — From ADP: Private sector employment increased by 517,000 jobs from February to March according to the March ADP National Employment ReportTM. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by the ADP Research Institute in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis “We saw marked improvement in March’s labor market data, reporting the strongest gain since September 2020,” said Nela Richardson, chief economist, ADP. “Job growth in the service sector significantly outpaced its recent monthly average, led with notable increase by the leisure and hospitality industry. This sector has the most opportunity to improve as the economy continues to gradually reopen and the vaccine is made more widely available. We are continuing to keep a close watch on the hardest hit sectors but the groundwork is being laid for a further boost in the monthly pace of hiring in the months ahead.” This was below the consensus forecast of 550,000 for this report. The BLS report will be released Friday, and the consensus is for 565 thousand non-farm payroll jobs added in March. The ADP report has not been very useful in predicting the BLS report.
A Closer Look at Today’s ADP Employment Report -In this morning’s ADP employment report we got the March estimate of 517K nonfarm private employment jobs gained from ADP, an increase over February’s revised 176K. The popular spin on this indicator is as a preview to the monthly jobs report from the Bureau of Labor Statistics. Here is a snapshot of the monthly change in the ADP headline number since the company’s earliest published data in April 2002. This is quite a volatile series, so we’ve plotted the monthly data points as dots along with a six-month moving average, which gives us a clearer sense of the trend. As we see in the chart above, the trend peaked 20 months before the last recession and went negative around the time that the NBER subsequently declared as the recession start. The COVID-19 pandemic has brought employment numbers down to levels we have never seen this century. ADP also gives us a breakdown of Total Nonfarm Private Employment into two categories: Goods Producing and Services. Here is the same chart style illustrating the two. The US is predominantly a services economy, so it comes as no surprise that Services employment has shown stronger jobs growth. The trend in Goods Producing jobs went negative over a year before the last recession. It makes sense that service-producing employment has plummeted during the pandemic for a couple of reasons – our economy is mostly supported by service-producing jobs, and during the pandemic, those same services were brought to a halt.For a sense of the relative size of Services over Goods Producing employment, the next chart shows the percentage of Services Jobs across the entire series. The latest data point is below the record high. There are a number of factors behind this trend. In addition to our increasing dependence on Services, Goods Production employment continues to be impacted by automation and offshoring. For a better sense of the components of the two Goods Producing and Service Providing cohorts, here is a snapshot of the five select industries tracked by ADP. The two things to note here are the relative sizes of the industries and the relative trends. Note that Construction and Manufacturing are Production industries whereas the other three are Service Providing. Another view of the relative trends of the five select industries is an overlay of the year-over-year comparison. For a longer-term perspective on the Goods Producing and Service Providing employment, see our monthly analysis, Secular Trends in Employment: Goods Producing Versus Services Providing, which is based on data from the Department of Labor’s monthly jobs report reaching back to 1939.
March Employment Report: 916 Thousand Jobs, 6.0% Unemployment Rate — From the BLS: Total nonfarm payroll employment rose by 916,000 in March, and the unemployment rate edged down to 6.0 percent, the U.S. Bureau of Labor Statistics reported today. These improvements in the labor market reflect the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic. Job growth was widespread in March, led by gains in leisure and hospitality, public and private education, and construction. … The change in total nonfarm payroll employment for January was revised up by 67,000, from +166,000 to +233,000, and the change for February was revised up by 89,000, from +379,000 to +468,000. With these revisions, employment in January and February combined was 156,000 higher than previously reported. The first graph shows the year-over-year change in total non-farm employment since 1968. In March, the year-over-year change was negative 6.720 million jobs. Next month, the YoY change will be up significantly – since employment collapsed in April 2020. Total payrolls increased by 916 thousand in March. Private payrolls increased by 780 thousand. Payrolls for January and February were revised up 156 thousand, combined. The second graph shows the job losses from the start of the employment recession, in percentage terms. The current employment recession was by far the worst recession since WWII in percentage terms, but currently is not as severe as the worst of the “Great Recession”. The third graph shows the employment population ratio and the participation rate. The Labor Force Participation Rate increased to 61.5% in March, from 61.4% in February. This is the percentage of the working age population in the labor force. The Employment-Population ratio increased to 57.8% from 57.6% (black line). The fourth graph shows the unemployment rate. The unemployment rate decreased in March to 6.0% from 6.2% in February. This was well above consensus expectations, and January and February were revised up by 156,000 combined.
Blockbuster March jobs report, but still a long way to go – HEADLINES:
- +916,000 million jobs added. The alternate, and more volatile measure in the household report indicated a gain of 609,000 jobs, which factors into the unemployment and underemployment rates below.
- U3 unemployment rate declined 0.2% to 6.0%, compared with the January 2020 low of 3.5%, and the April 2020 high of 14.8%.
- U6 underemployment rate declined 0.4 to 10.7%, compared with the January 2020 low of 6.9%, and the April 2020 high of 22.9%
- Those on temporary layoff decreased -203,000 to 2,026,000.
- Permanent job losers decreased -65,000 to 3,432,000.
- January was revised upward by 67,000, and February was also revised upward by 89,000, for a net gain of 156,000 jobs compared with previous reports.
- the average manufacturing workweek increased 0.2 hours to 40.5 hours. This is one of the 10 components of the LEI.
- Manufacturing jobs increased by 53,000. Since February 2020 manufacturing has still lost -515,000, or 4% of the total. Over 60% of the total loss of 10.6% has been regained.
- Construction jobs increased by 110,000 This was a big rebound from February’s Big Texas Freeze. Since February 2020 -182,000 construction jobs have been lost, 2.4% of the total. Over 80% of the worst loss of 12.5% has been regained.
- Residential construction jobs, which are even more leading, rose by 10,200. YoY there have been actual job gains, and employment in this sector is at another new 10 year+ high.
- temporary jobs *decreased* by -800. Since February 2020, 175,000 jobs have been lost, or 6% of all temporary help jobs.
- the number of people unemployed for 5 weeks or less decreased by -8,000 to 2.177 million, compared with last April’s total of 14.283 million.
- Professional and business employment rose by 66,000, which is still -685,000, or about 3.2% below its peak in February 2020.
- Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $0.2 to $25.21, which is a 4.4% YoY gain – less than the 5%+ YoY gains we saw in the last few months, which reflected that job losses during the pandemic occurred primarily among lower wage earners.
- the index of aggregate hours worked for non-managerial workers increased by 1.6%, still a loss since February 2020 of about 5%.
- the index of aggregate payrolls for non-managerial workers increased by 1.6%, still a loss of -2.1% from February 2020. On the other hand, over 90% of the loss from last February to April has been made back up.
- Full time jobs increased 935,000 in the household report.
- Part time jobs decreased -31,000 in the household report.
- The number of job holders who were part time for economic reasons decreased by 262,000 to 5.826 million, which is still an increase from February 2020 of 1,428,000.
- The Labor Force Participation Rate increased 0.1% to 61.5%, which is nevertheless down 1.8% from February 2020.
- The Employment to Population Ratio increased 0.2% to 57.8%, which is down 3.3% from February 2020.
- Leisure and hospitality employment increased 280,000.
- Employment in food and drinking jobs increased 176,000.
SUMMARY: This was a blockbuster report, but one that was anticipated by the big declines in the weekly new jobless reports during the reference weeks for March. There were only two negative news: the number of temporary jobs actually declined slightly in March, and average hourly wages for non-supervisory personnel increased an anemic $0.02. There are silver linings in each. Former temporary jobs may be getting converted to permanent jobs; and lower wage service workers have been called back to work in large numbers. Everything else was up sharply, reflecting an economy that is making substantial strides towards returning to pre-pandemic levels. This is partly because of great vaccination progress (for example, over half of all seniors in the US have been fully vaccinated), and partly a result of spring weather opening up great numbers of outdoor venues. Still, even at this rate, it will take the rest of the year to get back to February 2020 levels.
Strong job growth in March as vaccine distribution expands and the American Rescue Plan ramps up — EPI Blog by Elise Gould – A solid 916,000 jobs were added in March, the strongest job growth we’ve seen since the initial bounceback faded last summer. Even with these gains, the labor market is still down 8.4 million jobs from its pre-pandemic level in February 2020. In addition, thousands of jobs would have been added each month over the last year without the pandemic recession. If we count how many jobs may have been created if the recession hadn’t hit – consider average job growth (202,000) over the 12 months before the recession – we are now short 11.0 million jobs since February. Even at this pace, it could take more than a year to dig out of the total jobs shortfall. However, today’s number is certainly a promising sign for the recovery, especially as vaccinations increase and vital provisions in the American Rescue Plan (ARP) have continued to ramp up since the March reference period to today’s data. The benefits of the ARP will continue to be captured in coming months. Key points of note in today’s report:
- The largest jobs gains were in the sector most hurt: leisure and hospitality employment increased by 280,000 in March. Even with this improvement, leisure and hospitality employment – the lowest-paid sector in the U.S. economy – is still down 3.1 million jobs since February 2020.
- Public-sector employment – notably in state and local education jobs – finally saw signs of life in March, likely due at least in part to the impact of the state and local government aid in the ARP. State and local government employment rose 129,000 in March; 97% of that increase (125,600 jobs) were in state and local education employment. Even with these improvements, state and local education employment is still down 863,200 since February 2020. I’m hopeful here again that ARP provisions to state and local governments will provide a necessary boost in coming months.
- About one-fifth (21.0%) of the workforce teleworked because of the coronavirus pandemic. This means the vast majority of workers – disproportionately low-wage workers – are physically going to work. While the ramp up in the distribution of the vaccine is a positive trend, we are still nowhere near herd immunity and need to heed health officials in opening guidelines.
- While the overall unemployment rate fell from 6.2% to 6.0%, the labor participation rate only improved slightly. As it becomes safe to reopen, I expect many more workers to return to the labor market seeking jobs.
- The Black unemployment rate improved last month, but remains at 9.6%, far higher than any other group.
- Long-term unemployment continued to rise in March, with 4.2 million workers unemployed 27 weeks or more.
In addition to the 9.7 million officially unemployed workers in March 2021, we must add four more groups of economically hurt workers:
- First, the 636,000 workers misclassified as “employed, not at work.”
- Second, the 2.7 million undercount of unemployed workers, found even in normal times.
- Third, the 4.8 million workers now out of the labor force and not counted among the unemployed – measured by the differential between the size of the current labor force and what the labor force would be if the labor force participation rate hadn’t dropped over the last year.
- Fourth, the 5.8 million workers who experienced a drop in hours and pay because of the pandemic.
In total, this means that 23.6 million workers are currently harmed in the coronavirus downturn. We include the 5.7 million baseline unemployment level prior to COVID as part of the number hurt right now because job search was made much more difficult by the labor market impacts of the recession. We include the 2.7 million estimated undercount of the unemployed prior to the start of COVID based on Ahn and Hamilton (2021) because again job search was made much more difficult by the labor market impacts of the recession.
Comments on March Employment Report – The headline jobs number in the March employment report was well above expectations, and employment for the previous two months was revised up. Leisure and hospitality gained 280 thousand. In March and April of 2020, leisure and hospitality lost 8.2 million jobs, and then gained about 60% of those jobs back. However, leisure and hospitality lost jobs in December and January due to the winter surge in COVID cases – before gaining jobs in February and March – and are now down 3.1 million jobs since February 2020. Construction added 110 thousand jobs in March, and State and Local education added 126 thousand jobs. Manufacturing added 53 thousand jobs. Earlier: March Employment Report: 916 Thousand Jobs, 6.0% Unemployment Rate. In March, the year-over-year employment change was minus 6.720 million jobs. This will turn positive in April due to the sharp jobs losses in April 2020.This graph shows permanent job losers as a percent of the pre-recession peak in employment through the March report. These jobs will likely be the hardest to recover. This data is only available back to 1994, so there is only data for three recessions. In March, the number of permanent job losers decreased slightly to 3.432 million from 3.497 million in February. Since the overall participation rate has declined due to cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old. The prime working age will be key in the eventual recovery. The 25 to 54 participation rate increased in March to 81.3% from 81.1% in February, and the 25 to 54 employment population ratio increased to 76.8% from 76.5% in February. “The number of persons employed part time for economic reasons, at 5.8 million, changed little in March but is 1.4 million higher than in February 2020. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.” The number of persons working part time for economic reasons decreased in March to 5.826 million from 6.088 million in February. These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 10.7% from 11.1% in February. This is down from the record high in April 22.9% for this measure since 1994. This graph shows the number of workers unemployed for 27 weeks or more. According to the BLS, there are 4.218 million workers who have been unemployed for more than 26 weeks and still want a job. This does not include all the people that left the labor force. This will be a key measure to follow during the recovery. Summary: The headline monthly jobs number was well above expectations, and the previous two months were revised up 156,000 combined. The headline unemployment rate declined to 6.0%. This was a strong report, but there are still 8.4 million fewer jobs than in February 2020, and 3.4 million people have lost jobs permanently.
Amid surging COVID-19 cases, New York Mayor de Blasio orders 80,000 city workers back to offices – In line with the Biden administration’s full-court press to reopen the economy within his first 100 days in office, New York City Mayor Bill de Blasio, a Democrat, ordered 80,000 city workers back to offices starting May 3, despite the steady increase in COVID-19 infections this month and warnings of a “third wave” of infections fueled by more contagious and deadly variants. “This is an important step on the way to the full recovery of New York City,” de Blasio said at a news conference on March 23. “We’re going to make it safe, but we need our city workers back in their offices where they can do the most to help their fellow New Yorkers,” he added. This is a bold-faced lie. The vast majority of the city’s 325,378 full- and part-time municipal employees, including firefighters, paramedics, police officers and Parks and Sanitation workers, have continued working throughout the pandemic in frontline, public-facing positions. Forcing the tens of thousands of office workers in other roles, who have been able to successfully telework for the past year, back to in-person work on this abbreviated schedule is not based on scientific or health considerations. It is motivated purely by a political agenda promoted by the Biden White House, with the full support of Democratic Governor Andrew Cuomo and the Democratic Party as a whole. That agenda is determined by the interests of the corporate-financial oligarchy and is shared in all essentials by both big business parties. It knowingly sacrifices the lives of workers, including educators, to the ravages of the killer virus in order to ensure the profits and personal fortunes of the capitalist ruling class. De Blasio’s aim is to send a message that the home of Wall Street will be fully open for business in short order. Once city offices are open, other businesses will be expected to follow suit, coupled with an accelerated relaxation of remaining restrictions on dining, shopping and other activities. Last week, Cuomo also announced that the Mets’ and Yankees’ baseball stadiums will be open to spectators starting in April. Arts and entertainment venues can also reopen at 33 percent capacity, or a maximum of 100 people indoors and 200 people outdoors. In most cases, the public will be required to show proof of vaccination or a negative test result to enter these venues. How these measures are to be enforced remains unclear.
Democratic governor rules out new restrictions despite surge of COVID-19 in Michigan – Despite the vaccine campaign being pushed throughout the nation, cases of COVID-19 have continued their climb in the United States, up 15 percent from two weeks ago, averaging about 63,000 new cases of COVID-19 each day. Presently, there have been 31.1 million cases of COVID-19, with almost 565,000 deaths attributed to complications from the infection since last March. The situation is currently most dire in Michigan, where the B.1.1.7 variant combined with school reopenings and the relaxation of mitigation measures has seen an explosion of COVID-19 cases and hospitalizations. On March 31, the number of new cases surpassed 7,100. By comparison, the all-time one-day high occurred on November 20, with just over 10,000 cases of COVID-19. The seven-day moving average is now exceeding 5,400 daily cases of COVID-19, up from the February lows of around 1,000 daily cases. The test positivity rate has climbed to 15.6 percent. St. Clair County, Michigan, bordering the west bank of St. Clair River, has seen the highest increase in new cases in the state with a two-week change of 145 percent, nearly ten-fold higher than the national increase. Hospitalizations in the county are up 141 percent over the last 14 days. However, speaking on CNN Wednesday, Democratic Governor Gretchen Whitmer defended her actions to relax restrictions in the state and only proposed that residents wear masks and get vaccinated. Deflecting the question on reinstituting new restrictions, Whitmer spoke in her usual folksy political jargon, “We’re continuing to have robust conversations. Yesterday morning I had a restaurant owner asking if we could lift the curfew because of the Michigan game last night. Unfortunately, Michigan didn’t win, but the point still is that there’s a lot of push and pull. What we need to do is double down on our masking and get more people vaccinated.” Up to 8,000 fans will be allowed to fill the stands at Comerica Park today to watch opening day for the Detroit Tigers baseball team in a city which has been one of the worst hit during the pandemic. Meanwhile, Michigan has vaccinated just 28.6 percent of its population with at least one jab so far. When or if herd immunity will be achieved remains a theoretical debate. .
Town to resume utility cut-offs for unpaid bills -Front Royal plans to resume charging late fees and disconnections for unpaid town utility accounts this month. The town issued the alert to utility customers Wednesday on its website stating that the Department of Finance would assess late fees and penalties and resume disconnections for unpaid bills beginning April 12. Utility bills and delinquency notices mailed in April will reflect dates in which the department will assess late fees and penalties as well as the town’s plan to disconnect service, the town notice states. The town continued to mail notices to all past-due accounts throughout the pandemic. “The Town of Front Royal understands that some citizens may be faced with economic hardships related to COVID-19,” the town notice states. Customers experiencing economic hardships related to the pandemic and have an account balance of 30 days or more past due may qualify for aid through the town’s COVID-19 Municipal Utility Relief Program. As of Wednesday, the town has 1,081 active delinquent utility accounts with total arrears of $764,956, Director of Finance B.J. Wilson stated in an email Thursday.
Millions At Risk As States Begin To Lift Power Shut-Off Bans : NPR -audio, transcript –During the pandemic, a growing number of utility customers are having their power shut off for lack of payment. This spring, a dozen states lift their winter ban on electric shut-offs. The death toll from February’s brutal winter storm in Texas was revised to 111 this week. That’s double the original estimates. The storm cut power to much of the state and left millions in uninsulated homes. Now millions of people throughout the country are at risk of losing power not because of bad weather, but unpaid electric bills. NPR’s Scott Horsley reports. So much of everyday life depends on electricity, it can be hard to imagine what it’s like to go without. Michael Driskill doesn’t have to imagine. He lived without electricity for much of last year after the power company cut him off. It wasn’t easy.”You can’t take a shower. You can’t cool food. You can’t do laundry. You can’t set an alarm clock. You can’t charge your cell phone. Without electricity, it’s almost impossible to live in today’s society.” Driskill, who lives in a trailer home in Osceola, Iowa, owed the power company $2,000. After he lost his job at a meatpacking plant during the pandemic, there was little chance of catching up. He tried running a generator for a while, but it failed, costing him a refrigerator full of food. He ran an extension cord to his neighbor’s house in exchange for a few bucks, but it was only enough to power a few lights.
Need Amid Plenty: Richest US Counties Are Overwhelmed by Surge in Child Hunger – The financial fallout of covid-19 has pushed child hunger to record levels. The need has been dire since the pandemic began and highlights the gaps in the nation’s safety net. While every U.S. county has seen hunger rates rise, the steepest jumps have been in some of the wealthiest counties, where overall affluence obscures the tenuous finances of low-wage workers. Such sudden and unprecedented surges in hunger have overwhelmed many rich communities, which weren’t nearly as ready to cope as places that have long dealt with poverty and were already equipped with robust, organized charitable food networks. Data from the anti-hunger advocacy group Feeding America and the U.S. Census Bureau shows that counties seeing the largest estimated increases in child food insecurity in 2020 compared with 2018 generally have much higher median household incomes than counties with the smallest increases. In Bergen, where the median household income is $101,144, child hunger is estimated to have risen by 136%, compared with 47% nationally. That doesn’t mean affluent counties have the greatest portion of hungry kids. An estimated 17% of children in Bergen face hunger, compared with a national average of around 25%. But help is often harder to find in wealthier places. Missouri’s affluent St. Charles County, north of St. Louis, population 402,000, has seen child hunger rise by 69% and has 20 sites distributing food from the St. Louis Area Foodbank. The city of St. Louis, pop. 311,000, has seen child hunger rise by 36% and has 100 sites. “There’s a huge variation in how different places are prepared or not prepared to deal with this and how they’ve struggled to address it,” said Erica Kenney, assistant professor of public health nutrition at Harvard University. “The charitable food system has been very strained by this.” Eleni Towns, associate director of the No Kid Hungry campaign, said the pandemic “undid a decade’s worth of progress” on reducing food insecurity, which last year threatened at least 15 million kids. And while President Joe Biden’s covid relief plan, which he signed into law March 11, promises to help with anti-poverty measures such as monthly payments to families of up to $300 per child this year, it’s unclear how far the recently passed legislation will go toward addressing hunger.
The surge of COVID-19 in Florida and the disastrous reality of school reopenings in the US – On March 9, an article was published by the NBC affiliate in south Florida featuring an interview with the superintendents of the Miami-Dade County and Broward County school districts, who spoke in glowing terms about their forced return of children and teachers to brick-and-mortar classrooms last autumn. Using the language of the Biden administration about a new “normalcy,” they declared that if the nation’s fourth and sixth largest school districts can reopen schools “safely,” then every district can.It has now become clear, just three weeks later, that Florida is again becoming a major hot spot for COVID-19 infections, particularly among young people. The mainstream media, led by the New York Times, is referring to Florida as “a bellwether for the nation,” because it is the state that is furthest along in lifting COVID-19 restrictions.Last week, Florida averaged nearly 5,000 new COVID-19 cases each day, which was an increase of eight percent from its average two weeks earlier. This latest increase is largely attributable to the masses of spring break crowds that were openly invited by the state.The median age of COVID-19 cases has dropped since March 1 from 39 to 35, likely as a result of the spring break season, and this has been accompanied by a lower number of COVID-19 related deaths over the past two weeks. However, it is well established that deaths lag behind new infections, so one can expect to see an increase in deaths in the state in April and May. Florida is also the state with the largest number of B.1.1.7 variant cases, originally discovered in the UK, which have been documented as being more contagious and more lethal than the wild type of the virus. Florida has about one-fifteenth of the country’s population but a fifth of the B.1.1.7 cases and a third of the P.1 variant cases, first discovered in Brazil. The results of school reopenings in Florida have been a disaster, with 90,841 officially reported cases of COVID-19 in K-12 schools. Nearly 70,000 of these were students. There have been 11 pediatric deaths in the state since the beginning of the pandemic, and 42 active educators have died from COVID-19 since the reopening order was given last July.
Beloved Maryland math teacher dies of COVID-19 after school reopened – Mary Laurenzano, a math teacher at Bennett Middle School in Fruitland, Maryland, died of COVID-19 on March 22. Laurenzano had returned to her school voluntarily last September, at which point all of her students were still learning remotely. On February 8, some of her students returned for in-person learning under a hybrid model, and on March 9 Laurenzano developed COVID-19 symptoms and went into quarantine. She continued to teach from home right up to the day she succumbed to the virus last week. Laurenzano taught at Bennett Middle School starting in 2004 and earned numerous accolades and praise for her devotion to her students. In 2018, she was a Wicomico County Teacher of the Year semifinalist and a year earlier was honored by a local television station as a “Teacher Who Makes A Difference.” After being honored in 2018, Laurenzano said, “Every student is capable of being successful, but not all are traditional learners. Many come from homes that don’t have the ability to support their child academically.” She added, “Educational systems have to be creative in meeting the needs of every student, give equal opportunity for them to try different programs if they are being unsuccessful in a traditional environment. The community has to work together, put aside all of our differences and see the value in working together to help any child realize their potential.” In the 2017 television profile, she said, “I’m thankful for the staff that I have, the peers that I have, because without them we’re not able to have good instruction. These guys make it fun, because it’s one big family and it’s all of the different personalities that make it great.”
California lawmaker proposes program to cover parents’ out-of-pocket remote learning costs -A California state assemblyman is proposing a privately funded grant program to help parents who have been forced to pay out-of-pocket expenses to keep up with their children’s remote learning. Kevin Kiley, a Republican member of the California State Assembly, is spearheading the initiative to create the “Cal Grant K-12,” Fox News reported on Monday. The bill “incentivizes individuals and businesses to make donations that will provide eligible students scholarship funds they can use for approved expenses to help reduce pandemic-induced learning loss,” Fox News reported, citing Kiley’s office. “Over the past year, school closures have had a devastating impact on the mental health and academic progress of California students,” Kiley told Fox News. “A central part of our state’s strategy for overcoming learning loss should be to give parents greater control over their child’s education.” The donations, which would receive a tax credit from the state, could go toward educational resources including computers, tutors, and instructional materials, Kiley’s office told the network. . “Cal Grant K-12 empowers parents to spend education dollars on the services their kids need,” Kiley added, according to Fox News. According to the assemblyman’s office as cited by the network, distribution priority will go to low-income students “most disproportionately impacted by the COVID-19 pandemic and subsequent shift to distance learning.”
Edinburg Teachers Credit Union placed into conservatorship – The Texas Credit Union Department on Friday took control of Edinburg Teachers Credit Union in Edinburg Texas, naming the National Credit Union Administration as conservator. No details were offered regarding why the $106 million-asset credit union was placed in conservatorship. Edinburg Teachers earned slightly less than $693,000 last year, down from $775,000 in 2020, driven in part by a 12% reduction in lending. Charge-offs totaled about $175,000 at year-end, a 3.1% increase from 2019. The credit union remains well-capitalized with a net worth ratio of nearly 23%. ETCU remains open, with members’ deposits insured by the National Credit Union Share Insurance Fund for up to $250,000 per account. This is the third credit union to be placed into conservatorship in 2021, following Indianapolis Newspaper FCU and CO FCU in January. Edinburg Teachers serves more than 12,500 members, primarily educators.
UK variant discovered at University of Pittsburgh and Penn State campuses – The University of Pittsburgh ordered students to shelter in place after a large outbreak of COVID-19 cases last week. The number of active infections rose to 76 among staff and students, with 72 infections recorded in the last week alone. The total number of infections at the university now stands at over 1,060 for students and 207 for faculty and staff. In a statement last week by the COVID-19 Medical Response Office (CMRO), the university noted that the rise in cases is likely tied to the rise in the surrounding community. The five-day moving average rose to 8.6 per day last week, mirroring the broader community trends in Allegheny County. Both the county and the university are reporting an average of 30 cases per 100,000 each day, one of the highest rates of infection in Pennsylvania. Concern over the sudden rise in cases was heightened over the detection of the B.1.1.7 variant of the virus, more commonly referred to as the UK variant. “With the U.K. variant, B.1.1.7, present on the Pittsburgh campus, we are highly concerned about increased transmission rates and a surge in cases. Forty-two new students testing positive for COVID-19 in three days is worrisome,” said the statement. The UK variant is up to 50 percent more transmissible and has been linked to higher death rates in the United Kingdom. In response, the university issued a shelter-in-place order and moved into “Elevated Risk Posture,” which will enforce additional restrictions on campus activities in an attempt to slow the spread of the virus. The shelter in place had originally been planned for April 16 as a precaution ahead of graduation and will remain in effect until further notice. A tweet by the university informed students that they should “only go out for classes, work if needed, safe exercise, takeout food and essentials.” In a statement on Wednesday, the CMRO said: “This action is being taken to respond to a consistent increase in positive cases among students. With the presence of the U.K. variant, B 1.1.7., on campus and in Allegheny County, the COVID-19 Medical Response Office (CMRO) is concerned that this trend will continue.” Additionally, the statement noted: “Of significant concern is that the increase in positive cases since the end of last week is now among our resident hall students.” The spread of COVID-19 through residence halls is particularly disturbing considering the presence of the UK variant on campus. Given the higher transmissibility of this variant, it is possible that large numbers of students have already been infected and may test positive in the coming days.
Columbia University to striking graduate workers: Starve or take our deal The Columbia University graduate workers strike, now well into its third week, pits graduate student-workers against the wealthy Ivy League university and the political and financial interests it represents. At the latest bargaining session Tuesday, the administration rejected the Graduate Workers of Columbia (GWC) proposal, which made significant concessions to the university, essentially out of hand. The lead Columbia negotiator, lawyer Bernie Plum, estimated that the GWC proposal is “significantly more than $30 million apart” from what Columbia has decided they are willing to spend. He insisted that the GWC select a handful of “priorities” and promised graduate students they would not get all of the already limited demands for which they are striking. Rank-and-file graduate workers have demonstrated immense courage and militancy in their strike for better wages, benefits and working conditions, even as their own bargaining committee has maneuvered behind their backs. The entire experience of the Columbia graduate students up to this point in their struggle with the administration underscores the need for the workers to adopt a political and socialist strategy to advance their struggle. As the World Socialist Web Site has previously shown, the Columbia Board of Trustees amounts to a collection of multi-millionaire and billionaire hedge fund managers and CEOs with deep ties to Wall Street, corporate America, the Democratic Party and the military-industrial complex. In many cases, these are the very figures who make up the ruling class in the United States (among them are TOMS Capital CEO Noam Gottesman and former Secretary of Homeland Security Jeh Johnson). Their attitude toward workers can be summed up by the very fact that they have chosen to dock strikers’ pay in the middle of a pandemic.
Education Department canceling student debt for those with disabilities – – The Education Department announced on Monday that it would be canceling student loan debt for more than 40,000 borrowers who have total and permanent disabilities. In a press release, the department said more than 41,000 people who had their student loan payments reinstated will get their previous disability discharges back and any payments made during the COVID-19 pandemic will be refunded back to them. Another 190,000 borrowers who are still in a 3-year disability discharge monitoring period will not be asked to submit documentation of their earnings. “Borrowers with total and permanent disabilities should focus on their well-being, not put their health on the line to submit earnings information during the COVID-19 emergency,” Education Secretary Miguel Cardona said in the release. “Waiving these requirements will ensure no borrower who is totally and permanently disabled risks having to repay their loans simply because they could not submit paperwork.” The department noted in the release that policy dictates that people who receive discharges are required to send in earning documentation. If their income is found to exceed a certain limit than their loans will be reinstated. However, the Education Department pointed to a 2016 report by the Government Accountability Office that found nearly all of those who had their disability discharges reinstated did not exceed a certain income but instead did not submit the requested documentation. “As of today, the Department will not require borrowers who received a total and permanent disability discharge to submit earnings documentation for the duration of the COVID-19 emergency. This change will be made retroactive to March 13, 2020, the start of the COVID-19 national emergency,” the release said. “Additionally, the Department will reverse any reinstatement of loan repayment requirements that occurred during this period because the borrower did not submit earnings information,” the department added. “Impacted borrowers will not be required to later submit documentation of their income for the period covered by the COVID-19 emergency. Borrowers will begin to see their loans return to a discharge status in the coming weeks, including through follow-up communications from their servicer.”
Biden asks Education Secretary if he can cancel student loan debt – President Biden has asked Education Secretary Miguel Cardona to review whether Biden has the legal authority to cancel student loan debt, White House chief of staff Ron Klain revealed. The revelation came during an interview Klain gave Thursday to Politico, in which he said the commander-in-chief had not yet made a final call on the matter, something he faces enormous pressure from the progressive left to do. “He asked his secretary of education – who’s just been on the job a few weeks – once he got on the job to have his department prepare a memo on the president’s legal authority, and hopefully we’ll see that in the next few weeks,” Klain told the outlet. “He’ll look at that legal authority, he’ll look at the policy issues around that, and then he’ll make a decision. He hasn’t made a decision on that either way. In fact, he hasn’t yet gotten the memos that he needs to start to focus on that decision,” he continued. When then-candidate Biden gained the Democratic nomination in March last year, the presidential hopeful did not believe a chief executive had the authority to cancel any federal debt without Congress. Facing pressure from the progressive wing of the party as the general election race heated up, Biden eventually opted to support canceling $10,000 of student debt, a compromise compared to the $50,000 pushed by Senate Majority Leader Chuck Schumer (D-NY) and Sen. Elizabeth Warren (D-Mass.). In February, the president asked the Justice Department to review his legal authority to cancel $10,000 in student loans. It is not clear what conclusion it returned to him with. It is also not clear what Cardona has found in his Education Department-led review of presidential authority. Asked during Tuesday’s press briefing about the difference between the Senate Democrats’ $50,000 proposal and Biden’s $10,000 cancellation effort, White House press secretary Jen Psaki explained that the president was certainly willing to support canceling $50,000 in debt – just not without Congress. “The president continues to call on Congress to cancel $10,000 in debt for student loan borrowers. That’s something Congress could take an action on, and he’d be happy to sign,” Psaki said. The press secretary went on to say that the administration was “still taking a closer look at” its “options on student loans.”
China’s strong factory growth in March bolsters economic recovery (Reuters) -China’s manufacturing activity expanded at the quickest pace in three months in March as factories cranked up production after a brief lull during the Lunar New Year holidays, with improving global demand adding further momentum to a solid economic recovery. The official manufacturing Purchasing Manager’s Index (PMI) rose to 51.9 from 50.6 in February, data from the National Bureau of Statistics (NBS) showed on Wednesday, remaining above the 50-point mark that separates growth from contraction for the 13th straight month. Analysts had expected it to rise to 51.0. “The latest official PMI surveys suggest that after being hit by virus disruptions earlier in the year, growth bounced back strongly this month,” said Julian Evans-Pritchard, senior China economist at Capital Economics, in a note to clients after the data release. Chinese factory activity normally goes dormant during the Lunar New Year break, but this year millions of workers stayed put due to COVID-19 fears, which led to an earlier-than-usual resumption of business at factories. Authorities successfully curbed the domestic transmission of COVID-19 virus during the winter, leading to quarantine restrictions and testing requirements being scaled back as life once again returns to normal. The official PMI, which largely focuses on big and state-owned firms, showed both the sub-indexes for production and new orders stood at the highest level since December.
Australia: Queensland capital city enters lockdown – For the second time this year, the Australian city of Brisbane has been placed under a three-day lockdown, amid the discovery of thirteen community cases of the COVID B117 variant. Referred to as the “UK” variant, the B117 mutant spreads seventy percent more readily than the original virus. Concerns have been raised that this outbreak may be far larger than is presently known. The first case was identified last Friday. The infection of the 26-year-old man, from the working class suburb of Stafford, was linked via genomic testing of viral samples to an outbreak that occurred two weeks earlier at the Princess Alexandra, a major public hospital in Brisbane. That outbreak, which involved a doctor contracting the virus from an overseas quarantine patient, did not then lead to any lockdown measures, despite the doctor having moved around the community while infectious. B117 was responsible for the massive January resurgence of the pandemic in the UK and Western Europe, which has killed tens of thousands. A second cluster was announced Tuesday, related to a nurse at the Princess Alexandra contracting the B117 variant from a quarantine patient arriving from India. She and her sister travelled to Byron Bay, a popular tourist destination in New South Wales, with five cases, all originating from the infected nurse, resulting from a house party held there. In a sign that the outbreak has likely spread beyond Brisbane, six of the new cases had visited other parts of the country while infectious, including the five in Byron Bay, and also Gladstone, a mining town in northern Queensland. An additional case may be present in the Queensland town of Hervey Bay. Despite a high risk of community transmission, similar to that of Brisbane, no lockdown measures have been instituted in those areas. As with an earlier Brisbane outbreak in January, and cases that have previously emerged in Perth, Sydney, and multiple times in Melbourne, the failure of the quarantine system for international arrivals is largely to blame. A highly privatized and uncoordinated system, run out of poorly ventilated and inadequately equipped hotels, and staffed by untrained and exploited workers, “hotel quarantine” has proven unable to deal with the increasing virulence of new COVID strains, originating not only from the UK, but also from South Africa and Russia. The number of quarantined cases has risen from 5 last month to 78, only increasing the risk of a breach.
Australia population declines for first time since World War I — The number of people in Australia declined in the September quarter last year, the first such occurrence since before 1916. Estimates released last week by the Australia Bureau of Statistics revealed that the country’s population dropped by 4,239 to 25,693,059 in the three months to September 2020. By comparison, in the 19 years to March 2020, Australia’s population grew by an average of 84,165 each quarter. Population growth is typically second-highest in the September quarter, so the year-on-year decline was actually higher, at 111,022. The Centre for Population, established in 2019 under the treasury department, predicts that the nation’s population will grow by just 0.2 percent in the year to July 2021, a dramatic reduction from the annual average of 1.7 percent over the last decade. The immediate cause is the dramatic reduction in immigration as a result of COVID-19 border restrictions. But “natural increase,” defined as the difference between the number of births and the number of deaths in a given period, also fell over the quarter, continuing a decline that has been underway since 2012. Immigration has been the primary driver of Australia’s increasing population for most of the last 20 years and was the source of 64 percent of the country’s growth in the year to March 2020.
IMF chief warns of debt crisis for developing countries The International Monetary Fund has warned that lower-income countries face a debt sustainability crisis as interest rates on bonds start to rise. IMF chief Kristalina Georgieva delivered a speech this week at a virtual meeting, ahead of the spring meetings of the IMF and the World Bank. She said tightening financial conditions resulting from stronger economic growth in the US “could cause a rapid rise in interest rates … and significant capital outflow from emerging and developing economies.” Such a development “would pose major challenges especially to middle-income countries with large external financing needs and elevated debt levels.” The IMF warning follows similar statements from the UN secretary-general Antonio Guterres. In an interview with the Financial Times this week, he said the world faced severe problems of debt sustainability in the wake of the coronavirus crisis that had not been properly understood or addressed. He said the response to COVID-19 and to the financial aspects of the crisis “has been fragmented and geopolitical divides are not helping. It has been too limited in scope and too late.” Guterres said the fact that only six countries – Argentina, Belize, Ecuador, Lebanon, Suriname and Zambia – had so far defaulted on their debts created the “illusion” of stability and a “misperception of the seriousness of the situation.” In failing to address debt sustainability, “the risk is that we compromise the recovery of the economies of the developing world with catastrophic consequences for people’s lives, with an increase in hunger and poverty and dramatic problems with health and education systems, in many cases leading to instability, social unrest and, at the limit, conflict. Everything is now interlinked.” In her remarks, Georgieva said the IMF would upgrade its forecast for global growth from the level of 5.5 percent it had predicted in January as a result of the stimulus measures in the US and fiscal action by other governments. But she said while the overall outlook had improved “prospects are diverging dangerously not only within nations but also across countries and regions.” Compared to pre-COVID projections the cumulative loss in per capita income for advanced economies will be 11 percent by next year. But for emerging and developing economies, excluding China, the loss will be much worse, coming in at 20 percent. “This loss of income means millions of people will face destitution, homelessness, and hunger,” she said.
Tourism in Antigua and Barbuda Is Sending Covid Skyrocketing –In the twin-island nation of Antigua and Barbuda, tourism is responsible for up to 60% of the GDP. According to Prime Minister Gaston Browne, the pandemic resulted in an 18% loss to the country’s GDP in 2020, and sent unemployment from single digits to more than 30%. And while Browne reopened international borders in June, it took until the end of 2020 – when a rash of bookings offered the first meaningful glimpse of tourism recovery – for the consequences to crystallize. Throughout 2020, Antigua and Barbuda’s population of 100,000 saw just 159 confirmed cases of Covid-19 and five related deaths, giving the islands of 365 beaches the appearance of a save haven. Those numbers meant that only 1 out of every 629 residents ever developed the infection in 2020; during the peak of the second wave in July, it would have taken Miami just three days to achieve roughly the same levels of virality across its population of six million.As a result, nearly 15,000 travelers flew or boated to Antigua and Barbuda in December, more than doubling numbers from the month before. (Antigua is a convenient haven for east coast Americans, many of whom can get there via direct flights.) That began a wave of sustained tourism larger than any other throughout the pandemic.But as more visitors arrived, so did the cases of Covid-19. Confirmed positives multiplied nearly sevenfold in 2021, reaching 1,103 as of March 25. Deaths rose to 28. As a result, the U.S. Centers for Disease Control and Prevention increased its risk assessment for the country from Level 2 (moderate) to Level 4 (very high) at the beginning of March. That’s forced Browne and his government to reckon with how closely connected international travel has been to the public health crisis – and to uncover that not all forms of travel are equally problematic. Their findings could take on new urgency as travel professionals are recommending Caribbean trips to clients – newly vaccinated and otherwise – not just for the remainder of the spring season, but even into the typically low-season summer months.
In Brazil, political crisis overshadows Covid-19 – Brazil reported yet another record number of deaths on Tuesday as a surge of Covid-19 infections cripples hospitals across the country. But it’s the political turmoil rocking the government that grabbed headlines on Wednesday. A day after the biggest Cabinet reshuffle since President Jair Bolsonaro took office, the three commanders of Brazil’s armed forces were squeezed out, fueling speculation that Bolsonaro is losing the support of the military and seeking to assert control, amid growing criticism over his handling of the pandemic. “The Military Refuses Political Affiliation and Bolsonaro Replaces the Heads of the Armed Forces,” declared O Globo newspaper. In its headline, Folha de S. Paulo called it the “biggest military crisis since 1977,” when there was a similar institutional rift during the military dictatorship. The military departures have been particularly scrutinized because Bolsonaro, a former captain, has made much of his ties to the armed forces, filling his cabinet with generals and even celebrating the military dictatorship that once ruled the country. Carlos Alberto dos Santos Cruz, a retired Army general and former senior member of Bolsonaro’s administration, told CNN affiliate CNN Brasil that while ministerial changes are normal, “it is not normal to replace the three commanders of the armed forces without a reason, an explanation or any information given to society.” The political crisis comes as Brazil struggles to control the latest and most deadly Covid-19 surge to date. A record 3,780 people died on Tuesday, with ICU occupation at over 90% in 14 of Brazil’s 26 states. Brazilians have increasingly taken their anger out on Bolsonaro, who has downplayed the virus from the beginning.
COVID-19 pandemic triggers social, economic devastation among Canada’s cultural workers – Workers in Canada’s arts and culture sector were some of the country’s most vulnerable, even before the COVID-19 pandemic. In 2019, 450,000 workers laboured to produce music, live theatre, film, television, dance, radio and the visual arts, in many instances for poverty wages and with zero job security. Their average annual income was $32,400 [US$25,776]. The “gig economy” model itself originated to a considerable extent in the performing arts.The pandemic and the refusal of governments at all levels to provide adequate support to the cultural sector have led to the destruction of at least 25 percent of these jobs, according to the Canadian Association for the Performing Arts. Those who remain “employed” are dramatically underemployed, with hours worked in the arts and related industries having plunged by 48.8 percent compared to 2019. These shocking figures in fact understate the crisis, since statistical surveys consider people to be “employed” if they have worked one hour in a month.A survey of the performing arts conducted by Hill Strategies found that 83 percent of workers reported their income had been “severely reduced” by the pandemic. Forty percent reported being “very stressed,” while 32 percent said they were “extremely stressed, to the point of losing sleep.” The survey found that respondents had lost an average of $25,000 of income per year, or 83 percent of average arts income in 2019. In 2019, arts and culture produced 2.7 percent of Canada’s GDP, or $58 billion, which equates to $121,848 for each cultural worker. But this contribution fell by 46 percent from September 2019 to September 2020. As a whole, the Canadian economy declined by 3.9 percent during the same period. Canadian artists are experiencing an unprecedented catastrophe as a result. Before the pandemic, 1.8 percent of the Canadian labour force was employed in the arts. While a small segment of workers, the contribution of these workers to the cultural life in Canada and internationally is immense. Canadian artists produce music in all genres, from rock and pop to classical; they create drama, film, television and visual arts, which enrich cultural life around the world. The same can be said of artists in every country, to a greater or lesser extent. Art is a social practice. Our culture is a world culture. But despite their essential role in human life and happiness, cultural workers are often among the lowest paid and most precariously employed. They are brutally exploited by giant corporations, who treat the arts as a source of surplus value and shareholder payouts, not cultural enlightenment and spiritual satisfaction.
As coronavirus cases explode, French teachers demand closure of schools – While the number of coronavirus cases is rising rapidly in France, and the health care system risks being completely overwhelmed, there is a growing movement among teachers for the closure of schools and the adoption of a lockdown policy opposed by the Macron government. Yesterday, more than 30,000 coronavirus cases were reported across France. The seven-day average for cases is now 33,500, but is rising rapidly. For three days last week, the number of reported cases was between 40,000-45,000. On average, almost 300 people die every day. There is every indication however that the death toll is on the verge of a major increase. The hospital system is already at a critical point. Yesterday, the total number of patients in intensive care surpassed 5,000, eclipsing for the first time the peak set during the second wave in November last year. In the Ile-de-France region around Paris, the number of patients in intensive care units is 1,484. Yesterday, however, the Public Assistance of Paris Hospitals (AP-HP) warned that, based on the accelerating hospitalisation rate, even assuming a strict lockdown is imposed beginning April 1, the number of ICU patients will more than double to 3,470 in the Paris area within three weeks. If the government waits an additional week to order a lockdown, this would rise to 4,466 by April 29. In an interview last week with the Journal du Dimanche, President Macron defended his government’s refusal to impose a lockdown to prevent the spread of the virus. Behind the homicidal policy of allowing the virus to spread through the population stand the interests of the French financial elite, which rejects any restriction on non-essential production or schools that would threaten the flow of corporate profits. Faced with a wave of denunciations by scientists and doctors, Macron is due to deliver a national televised address this evening.
Macron rejects calls for strict lockdown as COVID-19 surges in France – In a nationally-televised address last night, French President Emmanuel Macron rejected desperate calls from medical authorities for a hard lockdown, as the pandemic spins out of control throughout the country. Instead, Macron announced minor social-distancing measures that are totally inadequate as a contagion driven by COVID-19 variants surges across France and Europe. Schools will be closed and classes transitioned online for one week, beginning next Monday, before the holiday break at the end of next week. After the two-week holidays, preschool and primary school-aged children will return to in-person classes, while high school classes are to remain online for an additional week. For the 1 or 2 weeks that classes are online, parents who cannot work from home will receive wage assistance to remain at home. Measures imposed two weeks ago in 20 regions, including Paris, are also to be extended across France. These include closing retail stores selling nonessential items, and limiting people’s movements when not going to work or school to a 10-kilometre radius around homes. Acting with blatant contempt for human life, Macron ignored urgent warnings by medical authorities that anything less than a full lockdown will flood hospitals in Paris and other major cities across France. Thousands of lives will be lost as doctors are forced into the barbaric situation of choosing whom they will treat, and whom they will not treat, for lack of space. Daily new cases in France range between 34,000 and 45,000 – the equivalent of 200,000 daily cases in a country the size of the United States. Less than 5 percent of French people are fully vaccinated against COVID-19. The day before Macron spoke, Patrick Bouet, the head of the National Council of the Order of Doctors, wrote, “we have lost control of the epidemic. Patients are ever younger, infections in schools are so many indicators of the continual degeneration of the situation over the last weeks.” Bouet cited desperate warnings from the Public Association of Paris Hospitals (AP-HP). With 1,484 patients in intensive care, 90 percent of intensive care beds are already occupied. However, AP-HP warned that a failure to enforce a strict lockdown beginning April 1 would mean more than 3,400 patients in intensive care within the Ile-de-France broader Paris region in three weeks. An additional week’s delay, they warned, would mean 1,000 patients more would need intensive care by the end of the month. “Life can tolerate today no arbitrage, no hesitation, no betting,” Bouet wrote, concluding: “I solemnly ask you, Mr President, before we are massively vaccinated, everywhere the situation is serious, you must put us under lockdown.” Instead, Macron signalled that the virus will be allowed to continue spreading throughout the population, in defiance of scientific and medical advice.
.
include(“/home/aleta/public_html/files/ad_openx.htm”); ?>