Avoiding the Thousand Cuts: Economic Update – Fri Oct 9

This week, 90 Washington State political candidates signed the “Economic Recovery Pledge,” which calls on leaders “to oppose calls for knee-jerk budget cuts that will only worsen our economic crisis.”

The pledge was sponsored by the Civic Alliance for a Progressive Economy (CAPE) — a political organization sponsored by Civic Ventures, Working Washington, and OneAmerica Votes. The overwhelming response to the Pledge is a great sign that leaders understand we can’t cut our way to economic growth, and that we won’t be able to recover from this economic crisis without real investments in our people so that they can jumpstart the economy by spending money in their neighborhoods. Strikingly, over half of the 90 leaders who signed the pledge are incumbents, which means our leaders understand the severity of this crisis, and the scope of the measures that we need to resolve it.

At a time when our federal leaders continue to disappoint and shock us, it’s heartening to see that the state is in the hands of people who know how the economy works and what it needs to come roaring back.

I’ll continue to share what we here at Civic Ventures 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 during the week of September 27 – October 3:

    • 15,496 Washington workers filed new regular unemployment insurance claims (down).
    • 13,365 workers filed new Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation claims (down).
    • 2,580,868 initial claims have been filed since the start of the pandemic from 1,384,517 unique individuals.
  • Initial regular unemployment claims in Washington remain 157 percent higher than last year’s weekly new claims.

  • Nationally, another 1.3 million Americans filed for *new* unemployment benefits last week – that’s 840,000 for regular unemployment and 464,000 for PUA.

    • REMINDER: if you see an outlet reporting that only 840,000 Americans applied for unemployment last week, they’re separating regular UI from the PUA program for self-employed and gig workers.
    • This marks 28 consecutive weeks where new single-week jobless claims were higher than any week during the Great Recession.
    • More than 25 million Americans are currently receiving unemployment insurance, many of those long-term.

  • While the larger stimulus talks have been sidelined by presidential diktat on Twitter, there are still  discussions between the adults in the room for a stand-alone airline bill and the president is floating the idea of more $1200 stimulus checks. Reports have varied wildly since then, with some insiders saying the talks are back on and others saying they’re definitely over until after the election.

  • No matter what happens in the future, “Washington’s failure to put together a new stimulus package will disproportionately hurt the low-wage, front-line workers, most of them Black or Hispanic, who have borne the brunt of this entire pandemic,” writes Axios’s Sam Baker.

  • Whenever the public conversation turns to taxing the wealthy to increase state revenue, devil’s advocates always sprout up to warn that millionaires and billionaires will just move somewhere else. At the New York Times, Paul Sullivan talks to some millionaires about why that’s just not true: Families, communities, and quality of life issues keep the wealthy rooted to their homes.

  • Experts seem to be coalescing around the idea that the Biden campaign’s economic plans will be better for the economy. Harvard economist Jason Furman endorsed Biden’s tax plan in the Wall Street Journal, saying it will spur economic growth. Both Moody’sGoldman Sachs agree that a Biden recovery would likely be stronger than a second Trump term’s recovery. And at Vox, Matthew Yglesias explains how a potential President Biden administration could win major economic gains for the nation, even if they face politically divisive obstruction from Republicans in Congress.

  • While the stock market continues to climb, notes Politico, only the wealthiest Americans are seeing real gains. And a new study revealed that billionaires around the world have for the first time amassed over $10 trillion dollars thanks to the coronavirus pandemic. That wealth is growing at “its fastest rate over any period over the past decade.”

Local Reaction to the Crisis

  • Governor Inslee on Tuesday announced the loosening of a few restrictions on businesses including restaurants, bars, and movie theaters, reports the Seattle Times. The Stranger’s Jasmyne Keimig confirms that the vast majority of Seattle’s independent cinemas will likely not reopen for a variety of reasons, including a failure to make a profit at 25 percent capacity and an inability to physically meet safe distancing guidelines.

  • Washington state is stepping in to protect utilities like heat and gas, writes Ben Adlin at the South Seattle Emerald: “A new order by the Washington Utilities and Transportation Commission (UTC) prevents the utilities from disconnecting customers for nonpayment until April 30, 2021. Late fees and deposits for new customers will be waived through Oct. 27, 2021.”

  • We know that nationally, the economy is suffering from a K-shaped recovery, with the wealthiest people at about the same levels or higher than before coronavirus hit and the middle and lower ends of the economic spectrum suffering. Charles Mudede at The Stranger says the K-shaped recovery has taken hold in Seattle, with more construction cranes than any other American city and other signs of economic strength returning in the wealthiest parts of the region, while less wealthy neighborhoods suffer.

  • The News Tribune’s Alexis Krell highlights the Department of Commerce’s new Economic Recovery Dashboard, which is a handy tool that tracks state data like employment figures, tax revenue, consumer behavior, and TANF recipients.


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 the news that 1 million Americans fell out of the workforce last month—and that 800,000 of those workers were women. It’s a striking piece of data that was buried in an avalanche of presidential campaign news, but it has alarming implications for the future of our economy.

  • The Pitchfork Economics podcast had an Ask Nick Anything episode this week, in which Nick and Goldy answered listener questions from around the world, including: What’s the opposite of neoliberal economics? What would the manifesto of the perfect political party look like? How much money do corporations spend lobbying against taxes, and is it even worth it?

  • And at Business Insider, Paul Constant addresses the idea that to broadly improve the economy for everyone, policies should aim to improve outcomes specifically for Black women.

Closing Thoughts

When President Trump pulled out of stimulus talks this week, news outlets were quick to report that the stock market dropped precipitously. But as we’re fond of saying at Civic Ventures, the stock market is just a mood ring for rich people; it doesn’t reflect the reality of what’s happening to most people in America today. I’d encourage you to read this Washington Post article, which talks to real Americans—not just Trump voters in diners—about what the lack of a new stimulus package means to their lives. These are small business owners who were betting their livelihoods and those of their employees that the Trump administration would do the right thing and pass a second stimulus package to help them make it through the winter. This is where the next wave of job losses, business closures, and economic hardship will begin, and these are the people behind the numbers. We can’t treat these developments like a game; this is a story that’s unfolding in every neighborhood around the country.

Be kind. Be brave. Wash your hands. Mask up.

Zach Silk
Civic Ventures

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