Category Archives: Economy

Animals Being Euthanized

So wasteful

RALEIGH, N.C. — Coronavirus outbreaks at meat processing plants are forcing North Carolina farmers to euthanize 1.5 million chickens, according to a state official.

Assistant Agriculture Commissioner Joe Reardon told The News & Observer that this is the first time during the pandemic that farmers in the state have had to euthanize their animals. Roughly a third of the 1.5 million chickens already had been killed, Reardon said.

Chicken and hog farmers in other states also have been euthanizing millions of animals during the COVID-19 pandemic. North Carolina hog farmers have not taken steps to euthanize their animals, Reardon said.

Wisconsin DWD Fails Unemployed Wisconsinites

It has been two months since Governor Evers shut down the state and should have anticipated the wave of unemployment. His incompetence is showing.

Across Wisconsin, almost a third of weekly unemployment claims (675,563 out of 2,121,906 claims) made between March 15 and May 16 are still unpaid, according to the overwhelmed Department of Workforce Development. And millions of phone calls from the thousands of people still waiting for their unemployment insurance have been consistently overloading DWD’s phone lines.

The state Department of Workforce Development on Wednesday reported that Wisconsin lost 385,900 private-sector jobs from March to April, and the unemployment rate shot up from 3.1% to 14.1%. Wisconsin is still doing slightly better than the nation as a whole. The national unemployment rate is 14.7%, while its labor participation rate, 60.2%, is 6.4 percentage points lower than Wisconsin’s.

Like thousands of other out-of-work Wisconsinites, Avila has spent days calling the DWD without ever speaking to an operator. By networking through Facebook groups like “Wisconsin Unemployment support group,” which was founded on May 1 and already has more than 1,400 members, she’s been able to call some DWD employees directly.

Lockdowns Destroy Livelihoods and Kill More People, Study Shows

Interesting. Follow the science.

Coronavirus lockdowns have ‘destroyed millions of livelihoods’ but failed to alter the course of the pandemic given many US states have seen lower infection rates after easing restrictions, a JP Morgan study has claimed.

The statistical analysis has raised questions about the effectiveness of the lockdowns put in place across much of the United States two months ago to stop the spread of COVID-19.

It suggests that the lockdown measures have not only resulted in economic devastation but could have also resulted in more COVID-19 deaths.

The strict stay-at-home measures put in place by the governors of most states in mid-March has so far seen nearly 39 million American lose their jobs and forced businesses to close.

[…]

Many states, including Alabama, Wisconsin and Colorado, have seen lower infection reproduction rates (R rates) after lockdown measures were lifted, according to the report.

Meanwhile, Nevada, Rhode Island, Texas, North Dakota and Pennsylvannia are the states where infection rates increased after lockdowns ended, according to the report.

Infection rates have continued to decline even once a lag period for new infections to become visible is factored in, according to the report.

A chart included in the report shows that many US states have seen a lower rate of transmission (R rate) after full-scale lockdowns were ended.

Real Estate – Sales Down, Prices Up

Interesting data here. It’s hard to tell if the decline in sales is a result of fewer buyers or the lack of inventory to buy. It is probably some of both. In any case, if you are selling a house, this looks like a great time to do it before the foreclosures hit the market, flood the inventory, and lower prices.

Sales of existing homes fell 17.8% month-to-month, and were 17.2% lower than April 2019, seasonally adjusted, according to the National Association of Realtors. That puts the annualized pace at 4.33 million units, the slowest sales pace since September 2011.

These numbers are based on closed sales, not signed contracts, so they represent contracts signed in late February and March. The April drop in closings is the largest one-month decline since July 2010, when the homebuyer tax credit, a federal stimulus resulting from the subprime mortgage crash, expired.

[…]

The supply of homes for sale fell 19.7% annually to 1.47 million units for sale at the end of April. That is the lowest April inventory figure ever. Not only did potential sellers decide not to list their homes, as job losses mounted and the economy shut down, but some sellers already on the market pulled their listings.

That drop in inventory pushed prices to a new record high. The median price of an existing home sold in April rose 7.4% annually to $286,800. That record does not account for inflation, but is a nominal record-high.

The thing about real estate is that it is time sensitive. Many people are buying because of a life change – move, new job, new kid, etc. That demand is relatively inelastic with economic fluctuations. The elastic part of the demand are investment buyers. This is the wild card. Some investment buyers are likely sitting this one out because their net worth has been hammered. But another group of investment buyers might be more active in real estate in anticipation of inflation and a decline in the equity markets. Inflation always drives up the prices of hard assets, so real estate is a good hedge. But many of these investors are probably going to wait until the foreclosures hit and prices are better.

JC Penney Considers Spinning off Real Estate

One wonders if owning retail space will be any more profitable than operating in it.

A piece of J.C. Penney’s proposal to emerge from bankruptcy includes spinning its real estate into a publicly traded real estate investment trust.

As part of a plan filed with the bankruptcy court, Penney would reorganize into a new retailer (“JCP”), along with a REIT that would collect rent checks from the retail business. Court documents say as much as a 35% stake in the newly created REIT could be sold to a third-party investor to raise cash, or to provide additional funding for the REIT.

Weighed down by a heavy debt load of more than $4 billion and hit hard by the coronavirus pandemic, Penney filed for Chapter 11 bankruptcy protection Friday evening. Some are now questioning if the department store chain, which has been around for more than a century, should still operate. It has been stuck in a sales slump for years. The department store industry as a whole has also been on the demise, with people shifting their spending away from the mall. When Penney filed, it still operated roughly 850 locations at malls across the country.

“Why Weren’t You Prepared for a Downturn?”

I am seeing comments here and elsewhere from liberals, mostly, who snootily ask why all businesses don’t have cash reserves to survive multiple months with no income. The attitude is equally stupid and condescending. Very few businesses carry enough ash reserves to survive months with zero revenue. This is particularly true for small businesses that survive on cash flow. They may have a line of credit, but that usually requires it to be secured by the owner(s) personal assets. But before accessing that line of credit, which is a loan, the business owner must decide if they are willing to risk their house and other assets when the government might just shut them down again – or business might never return to its previous level.

This attitude drips with the undertone that the businesses that go bankrupt because of the government enforced recession deserved to go under. You see, they weren’t prudent and had months of expenses set aside in cash. Never mind that these same liberals gripe when companies hoard cash because they are not spending it on employee wages or community projects. These companies deserve it.

What about government?

With government revenue collapsing, shouldn’t government have been prepared? Some states and local governments have a rainy day fund. Is it enough? Do they have one at all? If these governments weren’t prepared for an economic downturn, why should the taxpayers bail them out through higher taxes or more debt? As mayors and governors bemoan the lack of tax revenue, shouldn’t liberals demand the same level of foresightedness and prudent fiscal management that they are demanding of the local tavern owner?

Nobody could have reasonably anticipated that the government would shove us from a booming economy into a depression overnight. Businesses will go under through o fault of their own. Some governments might have to do the same. The difference is that government caused this depression. The business owners did not. This is not a normal economic cycle. This is an artificial depression caused by the totalitarian actions of government.

Cases in Georgia Continue to Decline After Opening

Remember when Georgia largely opened their economy three weeks ago and some people predicted an explosion in cases and deaths? Yeah, not so much.

Public sector must share burden of economic ruin

My column for the Washington County Daily News is online. Here’s a sample:

The decline in tax revenue is also cascading to all other levels of government. County, municipal, and school governments are also facing a future with a lot less money to spend. The gravy train has skidded off the rails. So far, the governor and local government leaders have done very little to restrain spending. Perhaps accustomed to having someone bail out their bad decisions, they have been very slow to act.

All this means that state and local governments will have to make some big, difficult, and necessary decisions in the coming months to bring spending in line with what the people can afford. Everything must be on the table including employee benefits, pensions, entire departments, buildings, staff for elected officials, the governor’s mansion, schools, universities, and, yes, entitlements.

When this must happen, government employees and beneficiaries are sure to forcefully object, but it must happen. There just isn’t enough money. Just like private businesses and citizens must adapt to the new normal of smaller economy, so must our government.

Worst Unemployment Rate Since Great Depression

We’ve been watching the numbers add up for over a month. Open. The. Economy. Now.

With much of the American economy in self-imposed shutdown to prevent the spread of coronavirus, April’s colossal surge in unemployment delivered a historic blow to workers.

The US economy lost 20.5 million jobs in April, the Bureau of Labor Statistics said Friday — by far the most sudden and largest decline since the government began tracking the data in 1939.
Those losses follow steep cutbacks in March as well, when employers slashed 870,000 jobs. Those two months amount to layoffs so severe, they more than double the 8.7 million jobs lost during the financial crisis.
For many Americans who lost their jobs and their homes in the 2008 financial crisis, this moment reopens old wounds. It took years to rebound from those setbacks. When the economy eventually did crawl back, US employers added 22.8 million jobs over 10 years — a victory for all those who had weathered the Great Recession.
Now, the coronavirus pandemic stings not only because of the public health crisis it has inflicted — but also because it wiped out nearly that whole decade of job gains in just two months.

3.169 Million More People Are Unemployed this Week

To put this in perspective, 3.169 million people is more than the entire workforce of Wisconsin. Imagine if every single worker in Wisconsin was laid off in a single week. There’s nobody to stock the grocery stores. There is nobody to repair the power grid. There’s nobody to process that insurance claim. There’s nobody to repair that car. 3.169 people just sent home to collect a government check that’s being paid for by our grandchildren. That is the economic damage that these government lockdowns are forcing on us.

Another 3.169 million Americans filed for unemployment benefits in the week ending May 2, exceeding economists expectations for 3 million initial jobless claims. The prior week’s figure was revised higher to 3.846 million from the previously reported 3.839 million. So far over the past seven weeks, more than 33 million Americans have filed unemployment insurance claims.

People Dying At Home

More predictable, if unintentional, consequences.

While no reliable statistics are available on how many Americans with non-Covid-related illnesses are avoiding the health system, doctors responding to an informal Twitter poll reported a 40% reduction in heart attack patients. Cigna, the insurance company, said patients were not actively seeking care for urgent health needs, citing significant reductions in hospitalizations for GI bleeds, seizures and appendicitis.

Though it is not known how many people with chronic disease have died in recent weeks, some may be driving up the number of suspected Covid deaths – a grey area of the data that includes people who have died of related health issues.

State Sees 43% Drop in Tax Collections Vs. 2019

It’s about to get real for government. Evers’ pretend 5% reduction ain’t gonna cut it.

Tax collections in the month of April, 2020, were $1,145 million. This is $870 million below collections of April, 2019. And, for the 10 months of the current fiscal year, collections are $313 million below those over the same 10 months of 2018-19.

Open Wisconsin now

My column for the Washington County Daily News is online and in print. Go pick up a copy!

This week, the Wisconsin Supreme Court is hearing arguments about whether or not to end Governor Tony Evers’ dictatorial rule and re-establish the Legislature as a co-equal branch of government. Hopefully the court will side with self-governance and strike down Evers’ unconstitutional power grab. When they do, the governor and Legislature will be left to wrangle over the best plan to reopen the state’s economy. What should the plan be? Get out of the way and let Wisconsinites get to work.

As other states go about opening their economies, they are doing so with a variety of plans. Some are very detailed plans with a strict metrics. Some are looser plans with a schedule of gradual opening. Some, like Governor Evers’ plan, are utterly unworkable and rely on arbitrary decisions made in the governor’s mansion. All of them are based on the incorrect presumption that some politician sitting in a leather chair in a faraway capital is better informed on how to safely open factories, retail stores, processing plants, and offices than the people who own and work in them.

Wisconsin’s experience is the perfect example. Evers closed the state without much of a plan. From the first day, confusion reigned as people tried to comply with the rules, but since the rules were vague and incomplete, Evers resorted to issuing various clarifications every few days. There was never any way that Evers, or his staff of lifer government bureaucrats, were equipped to fully understand the full consequences of the orders they were issuing. They were never going to be able to anticipate and respond to the way their orders rolled through society.

While Evers and his staff may be uniquely and especially bad, no small group of politicians and advisers would be experienced and smart enough to micromanage something on the scale of stopping or restarting an entire state’s economy. The reason Evers failed so badly is the same reason that socialism fails: central planning does not work.

That is why Wisconsin should not go down the failed path of central planning when reopening the economy. Instead, our state and local governments should assume the role of a humble government that uses its granted powers to support the people — not oppress them.

When the coronavirus crisis began, we were facing a very scary unknown danger. The early projections showed that the virus may kill millions, incapacitate many more, and overwhelm our health care system. Based on those projections, our governments responded with draconian measures. With the benefit of hindsight, we can argue about whether that response was warranted, but we have more information as we move forward.

While we are a long way from completely controlling or stopping the spread of coronavirus, we know a lot more about it and its spread. It is not as deadly as we thought. We have plenty of capacity in our health care system. The spread can be greatly mitigated by social distancing, washing hands, covering coughs, sanitizing surfaces, and staying home if you are sick. And the people who are at most risk of serious complications or death are the elderly and those with serious underlying conditions.

We have spent weeks learning about this virus and how to protect against it. We have shifted from dealing with a scary unknown risk to a scary known risk. That is why our government should step back and let the citizens manage the risk for themselves. The people all know how dangerous this virus is now and are perfectly capable of managing the risk just like we do for every other risk that confronts each of us every day.

No business owner wants their customers, employees, or themselves to get sick. No customer wants to put himself or herself at undue risk while shopping. No employee wants to work in unsafe conditions. But it is up to each of these groups of people – employers, employees, and customers – to work out how to interact with each other where everybody is comfortable. Those billions of interactions take nuance and understanding to do correctly. Nuance and understanding are not government’s forte.

While government should step back and let a free, self-governing citizenry open their own economy, we do need our government to do what government does well. We need our government to pool resources to be available to swamp any potential outbreaks. We need our government to provide the latest guidance and recommendations. We need our government to provide legal reform to limit liability for people who might be sued because of the virus.

Other than that, we need our government to get out of the way.

Supreme Court Takes Case. Will Hold Hearings on Tuesday.

Ugh.

The Wisconsin Supreme Court on Friday said it would take up a controversial case that could result in the suspension of Gov. Tony Evers’ stay-at-home order, implemented to mitigate the spread of COVID-19.

The 6-1 decision is a setback for the Evers administration, which wanted the court to throw it out. Now, attorneys for the administration and Republican Legislature, which brought the lawsuit, will present their arguments via videoconferencing on Tuesday, after which the court could rule.

It frustrates the hell out of me that the court moves so slow. For most of the court’s business, time is not of the essence. They are deciding on some legal issue about an incident that is long over and the immediate impact of that decision impacts very few. But when there is something going on RIGHT NOW that requires a decision, the people deserve for them to act faster.

In this case, we have a rogue executive branch that is seizing dictatorial powers to usurp the power of the legislature and rule by decree. The governor is violating every Wisconsinite’s civil rights and causing incredible irreparable harm to the economy and lives of millions of citizens. If there was ever a time that required swift action by the court to restore the division of powers and uphold the people’s rights, this is it.

The court showed that they can at swiftly when required. Just a few weeks ago, they acted within hours of Evers’ unconstitutional attempt to move the election. Why can’t they do that here? That’s the wrong question. They can do it here. Why are they choosing to plod along?

Marinette Marine Awarded Navy Contract

Great news for the state!

(WLUK) — The U.S. Navy announced Thursday Fincantieri Marinette Marine was awarded a contract to build the Navy’s new frigate.

The initial contract is worth almost $800 million for one guided missile ship.

If all options are exercised on the contract, Marinette Marine will deliver the first 10 FFG (X) ships for a total of more than $5.5 billion.

Medical Personnel Losing their Jobs

I hope nobody has any medical emergency other than Covid anytime soon.

At a time when medical professionals are putting their lives at risk, tens of thousands of doctors in the United States are taking large pay cuts.

And even as some parts of the US are talking of desperate shortages in nursing staff, elsewhere in the country many nurses are being told to stay at home without pay.

That is because American healthcare companies are looking to cut costs as they struggle to generate revenue during the coronavirus crisis.

“Nurses are being called heroes,” Mariya Buxton says, clearly upset. “But I just really don’t feel like a hero right now because I’m not doing my part.”

Ms Buxton is a paediatric nurse in St Paul, Minnesota, but has been asked to stay at home.

At the unit at which Ms Buxton worked, and at hospitals across most of the country, medical procedures that are not deemed to be urgent have been stopped. That has meant a massive loss of income.

Potential COVID Treatment Found in Remdesivir

Excellent news!

Scientists on Wednesday announced the first effective treatment against the coronavirus — an experimental drug that can speed the recovery of COVID-19 patients — in a major medical advance that came as the economic gloom caused by the scourge deepened in the U.S. and Europe.

The U.S. government said it is working to make the antiviral medication remdesivir available to patients as quickly as possible. Stocks surged around the world on the news, with the Dow Jones Industrial average climbing more than 550 points, or over 2%, in the afternoon.

“What it has proven is that a drug can block this virus,” said Dr. Anthony Fauci, the U.S. government’s top infectious-disease expert. “This will be the standard of care.”

It looks like it would take some ingenuity to ramp up production if this proves to be effective on a wide scale.

And when it comes to remdesivir, experts say Gilead might not have been inclined, or even had the time, to make the process as efficient as it could be. Gilead developed the compound during the 2014 Ebola virus outbreak in West Africa and sped it along with the goal of testing it before the outbreak waned. The process likely reflects the anticipated demand for an Ebola treatment: the 2014 Ebola outbreak saw 29,000 cases over 2.5 years; the current coronavirus pandemic is approaching 2.5 million cases in under 5 months.

As the scope of the pandemic widens, Gilead has been open about the challenges of manufacturing the drug. The firm says it typically takes 9 to 12 months to make an antiviral like remdesivir, but that since January it has shrunk the timeline to 6 to 8 months. “We continue to work on optimizing the chemical synthesis processes,” the company states.

In a public communication in early April, CEO Daniel O’Day outlined a series of measures Gilead was taking to increase access to remdesivir. At the time, the company said it had on hand enough active ingredient to create about 1.5 million doses, enough for roughly 140,000 treatment courses, based on a 10-day regimen. The company has been working to increase both internal capacity and external partnerships to generate an additional 500,000 courses by October, 1 million courses by the end of the year, and, if needed, several million courses in 2021.

Some Hartford Businesses Open Despite Insurance Fears

Good for them! For those small businesses who are being threatened by their insurance company if they open, I’d suggest that you take your business elsewhere. These insurance companies are willing to cover the big box stores. If they don’t want your business, then don’t give it to them. Bear in mind that the insurance companies are flush right now because claims are way down. They are still taking your premium checks. They should cover you opening your business.

“It is really hurting business and it will take months to recover. I’ve fielded over 40 calls from customers asking if we’d reopen,” Mallow said. “We’ve been able to pay our bills.

Hattori said she thinks “the whole insurance thing is really poor information.”

“I talked to another business owner and asked them if they had actually talked to their insurance agent. She said no. I feel fear is just perpetuating insurance fears. So there’s no insurance issues whatsoever. As long as you pay your premiums you are insured,” Hattori said.

“If you got to Walmart they are insured. In my shop if you want to buy yarn why would my insurance have anything to do with it? The safety factor is like tenfold more serious in a store like that. In my shop there is no fear. I am a small business owner; why would I want to put my customers at risk, put myself at risk? Without customers I don’t have a business. If I don’t have fear my customers don’t need to have fear. If people are sick I think most people stay home when they are sick anyway.”

Government Coronapanic Causing Cancer Deaths

This is happening in the U.S. too. And it’s harming and killing more than cancer sufferers.

Almost 18,000 more people with cancer in England could die after the coronavirus pandemic led hospitals to suspend treatment and deterred patients from seeking NHS care, research has found.

Cancer experts claim that an extra 6,270 people in England who have been newly diagnosed with the disease could die from it over the next 12 months as a direct result of the disruption caused by coronavirus, and the additional toll taking into account all those living with cancer could be 17,915.

That is an increase of 20% on the 89,576 deaths among cancer patients recorded annually in England, according to the latest available statistics.

Socialists Propose Mass Business Bankruptcies

They have no idea how the economy functions.

Sen. Elizabeth Warren (D-Mass.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) are set to introduce legislation that would put a moratorium on mergers involving large companies during the coronavirus pandemic.

The Pandemic Anti-Monopoly Act would freeze mergers that include companies that have more than $100 million in revenue, are run by hedge funds or private equity firms or that have exclusive patents impacted by the crisis, like key medical equipment.

Additionally all mergers that must be reported to the Federal Trade Commission under current law, which in 2020 is any valued over $94 million, would be frozen as well.

As the economy crumbles, the larger companies are the ones with the most assets and diversification to survive. Many smaller and medium businesses will be harder hit. So let’s imagine that you are a business with some great people, some intellectual property or other hard assets that have value, and some wonderful customers that you are struggling to serve as revenue dries up. What are your choices? You can try to sell your company to another company so that your employees and customers will continue to be supported. You can try to tighten your belt and survive – perhaps with a government handout with strings attached. Or you can declare bankruptcy, fire everyone, and close the business.

What Warren and AOC are proposing is to take the “sell the company” option off the table for the vast majority of struggling companies. The remaining two options are for businesses to accept a bailout with whatever strings come attached (read: ceding control of the company to the government) or shut down. The cruel game that the socialists are setting up are “accept your new government overlords or shut down and go on the dole.” Either way, the socialists take more control and the people are hurt. Win/win, in their eyes.