Huzzah to Vaccines, but We’re a Ways from Normal: Economic Update – Tue Nov 10

The week began with the welcome news that Pfizer’s coronavirus vaccine has, in early trials, proven to be more than 90 percent effective. At the earliest, the general population will start receiving vaccinations around April, and the soonest things will start to feel “back to normal” is roughly this time next year, if we are vigilant. At the same time, infection numbers are skyrocketing — and the week ended with Washington announcing sweeping new restrictions on gatherings and businesses.

All this is to say that even though a vaccine might be on the way, the pandemic isn’t over, and its economic repercussions will stay with us for a long time to come. We’re continuing these emails because millions of Americans are out of work, millions more are at risk of losing their homes, and a whole generation is at risk of losing the economic security that every living American has previously enjoyed.

We’re still in need of big, bold solutions that meet the size of this unprecedented crisis. If science can find a cure for coronavirus, surely our political leaders can assemble a cure for the economic downturn that has accompanied the pandemic.

It’s time for our local leaders to stop waiting on the Federal government and get to work.

Here’s what we are watching this week:

  • The latest numbers on the scope of the economic crisis
  • The local reaction to the economic crisis
  • The public response as measured by public opinion research

I’ll continue to share what we are thinking, reading, and talking about in short, occasional updates like this.

The regional economic update is from Zach Silk of Civic Ventures, sent regularly each week and posted with permission.  You can find more content by the team at Civic Ventures at their blog, Civic Skunkworks.


The Latest on the Impacts of Covid-19

  • Washington unemployment insurance claims increased significantly during the week of November 1-7:

    • 25,201 Washington workers filed new regular unemployment insurance claims.
    • 10,608 workers filed new Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation claims.
    • 2,683,281 initial claims have been filed since the start of the pandemic from 1,417,156 unique individuals.
  • “Washington saw more new claims for unemployment benefits last week than any other U.S. state,” reports Paul Roberts at the Seattle Times.

  • Nationally, another 1 million Americans filed new unemployment insurance claims last week. That’s 709,000 new regular unemployment claims and 298,000 new Pandemic Unemployment Assistance claims. For reference, the peak of weekly jobless claims during the Great Recession was in March of 2009, when numbers topped out at 674,000.

    • This marks 33 consecutive weeks where new single-week jobless claims were higher than any week during the Great Recession.
    • More than 21 million Americans are receiving unemployment insurance.
  • At Bloomberg Opinion, Tim Duy argues that the Biden administration is poised to adopt an economy that will quickly rebound from the pandemic. Duy says that unlike the incoming Obama administration’s efforts to fight the Great Recession, which was directly caused by rampant deregulation of the banking industry, he believes Biden will have a good launching pad for recovery. Duy’s outlook is definitely on the rose-colored glasses side of the economic commentary spectrum, but it does suggest the possibility that Biden might have an opportunity to address economic inequality during the recovery without having to fix the foundations of the economy at the same time.

  

  • On the other hand, writers at Axios warn that the economy is on track to deteriorate even faster than we thought, now that another stimulus package is almost certainly not coming before the end of the year. Without that additional consumer spending that a stimulus would provide, President-elect Biden will almost certainly face an unprecedented challenge on his first day in office.

  • As cases surge around the country, credit card spending is dropping too — indicating that the only path to economic recovery requires controlling the virus, so that consumers feel secure enough to spend and participate in the economy again.

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  • This Brookings report on America’s growing economic rift offers some striking county-by-county economic analysis of the election: “Biden’s winning base in 477 counties encompasses fully 70% of America’s economic activity, while Trump’s losing base of 2,497 counties represents just 29% of the economy.”

  • Linda Poon at Bloomberg CityLab offers an overview of the local ballot measures that passed and failed. If you look closely at the results, you can see that progressive economic issues such as the $15 minimum wage and taxing untapped wealth did quite well at the ballot box around the country.

  • The Center on Budget and Policy Priorities makes a compelling case that more relief is needed immediately to address the weakening economy and distressed communities.

  • Some 13 million Americans will be left high and dry after emergency unemployment programs end on December 31st, reports the New York Times: “Many families have depleted any savings they built when the $600 supplement was available. A partial federal eviction moratorium is scheduled to expire at the end of the year, although it could be extended. And benefits checks won’t just shrink, as they did over the summer — they will disappear.”

  •  In Congress,  Democrats are still seeking a sweeping stimulus package, even as Republicans call for an anemic “targeted relief” program.

  • This week, the Supreme Court heard a case that puts the future of the Affordable Care Act in doubt. The Center for American Progress reports that repealing the ACA would have disastrous effects on rural communities that are being hit hardest by coronavirus.


Local Reaction to the Crisis

  • Inslee announced today sweeping restrictions on gatherings, restaurants, gyms and other points of contact. His announcement comes as Washington’s cases rise to the highest level yet.

  • As part of Crosscut’s post-election package of six editorials exploring the possibilities of an incoming Biden administration, Katie Wilson sees a series of “unsatisfying compromises” for progressives on the economic front, unless the pandemic worsens the economy. If that happens, Wilson writes, “it could spark overwhelming public demands for action, perhaps even the kind of mass organizing and strikes that spurred the transformations of the 1930s.”

  • At Publicola, Erica C. Barnett notes that the eviction moratorium is not protecting all renters from being evicted. Experts tell Barnett that the evictions are happening because lawmakers are adding a growing list of exemptions to the moratorium.

  • Luna Reyna writes about the work that Seattle Public Schools is doing to build more educational justice and digital equity into its pandemic plans. Her article at the South Seattle Emerald also includes a list of resources for families that need assistance getting digital access or other resources for at-home learning.


Real-time Analysis of the Economic Crisis

We are providing regular commentary on our content channels including analysis of the trickle-down policies that fueled the disastrous federal pandemic response, explorations of the system-wide economic fragility that the downturn has exposed, and explanations of policies that will build a stronger and more inclusive economy.

  • On Facebook Live, Jessyn and I discuss how Democrats can reclaim the center by moving aggressively to tackle economic inequality. We also explain why we’re excited about President-Elect Biden’s new chief of staff, Ron Klain.

  • In our Pitchfork Economics podcast this week, Nick and Goldy interview New Jersey Governor Phil Murphy about the millionaires tax that he shepherded into law earlier this year to combat the coronavirus economic downturn by empowering the middle class.

  • And in a bonus Pitchfork Economics episode, we’re re-issuing Nick’s conversation with Ron Klain from April. In the episode, Klain had a lot to say about leadership failure and government unpreparedness in a time of pandemic. Now that he’s been named President-elect Biden’s chief of staff, the conversation offers some insights to the Biden-Harris administration’s pandemic response and economic recovery plan.

  • And in his Business Insider column, Paul Constant writes about the dilemma that state leaders face as the federal government continues to fail to lead on coronavirus: The only way to get through the pandemic is to invest in people and small businesses, but state governments lack the federal government’s power to create money. That’s going to require state leaders to get inventive as they search for revenue.

 


Public Opinion

We also wanted to share with you some recent polling and research.

  • U.S. consumer confidence, as tracked by Ipsos, dipped slightly at the end of last week while American media audiences were still waiting for the presidential race to be called by major networks, though confidence remains slightly above pandemic averages.

  • Perhaps more indicative of Americans’ outlooks on the economy, however, 49 percent say it’s likely they, a family member or friend will love their job in the next six months duer to the economic crisis.


Closing Thoughts

I was heartened this week by this (paywalled) Financial Times piece by Martin Sandbu, which argues that minimum-wage increases are gaining popularity with economists and politicians who used to bristle at increases. Seattle was at the forefront of the $15 movement—we helped formulate the then-daring proposition that when restaurant workers could afford to eat in restaurants, that was good for everyone. Now, as recent $15 wins on the ballot in Florida and Portland, Maine prove, this is received wisdom.

The widespread acceptance of this idea gives me hope that we are not as far away from a meaningful coronavirus stimulus package as it feels right now. Thanks in part to the fight for $15, people understand that ordinary Americans are the real job creators, and that we can’t have a healthy economy unless everyone can participate.

Those same universally accepted principles should guide recovery efforts at the city, state, and national levels. The hard part of communication has already been done; it’s just a matter now of holding our leaders accountable to their own words.

Be kind. Be brave. Stay distant. Mask up.

Zach Silk

President
Civic Ventures
civicskunk.works

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