Another 4.4 million people filed unemployment claims last week, bringing the total unemployed in the US to 26 million and the unemployment rate to around 20%. This is the fifth straight week of record weekly unemployment filings, but the third straight week of declining filings, which is about the only silver lining in economic data today.
For comparison, according to the National Bureau of Economic Research (NBER), it took three years for unemployment to go from 4.7% to over 20% in the Great Depression. (It peaked in 1933 at around 25%.)
It would help if the Trump Administration and the Republicans in Congress would work towards a sensible response to the pandemic, but alas, they can't get past their ideologies or basic stupidity. Political appointees at the Dept of Health and Human Services sidelined Biomedical Advanced Research and Development Authority director Dr Rick Bright, a physician who has studied immunology and molecular pathogenesis for most of his career, because he refused to endorse President Trump's quackery. Bright joins a number of other scientists and experts canned for not following the party line over the past two months, including the head of the director of the National Center for Immunization and Respiratory Diseases. The Centers for Disease Control hasn't had a press conference since March 9th "in part out of a desire not to provoke the president," according to the Washington Post.
Senate Majority Leader Mitch McConnell has taken the opportunity to push his ideology of small government (i.e., everyone for himself) one step further by suggesting states like Illinois could simply go bankrupt rather than get Federal aid to help their governments through the crisis. Note that the reason states like Illinois have a crisis right now looks a lot like the reason the whole world has a crisis right now, but McConnell, who hates government as much as Trump hates women, thinks screwing millions of retirees out of their pension benefits sounds like a great thing to do in a pandemic.
One should note that Illinois ranks 43rd on the list of how much Federal aid goes to the states. Kentucky ranks 8th. In fact, there seems to be a correlation between the percentage of votes for Republican candidates and a reliance on Federal aid. This makes perfect sense, of course: these states vote against their own taxes but they still have to keep their poorest citizens from dying, so they go hat-in-hand to the Federal government. Also, the New Jersey plan makes sure that small, rural states have disproportionate power in Congress, further guaranteeing that these places will suck money from larger, urban states even while crying about the size and scope of national programs.
My fervent hope in the next 194 days is that people understand how much we need effective government, and how the disastrous response of our current government comes directly from the administration's and the Republican Party's twin desires to increase wealth inequality through decreasing government effectiveness in general.
Either I spent all day coding and therefore didn't have time to read these things, or I just didn't want to read these things. Let's start with the big questions:
You should have the same answer to all these questions ("yes"), though you might want to extend your answer to the first one after reading the article. (I vote "electric.")
When the economy went into its current medically-induced coma, cash movements slowed almost to a halt in some sectors. If you had cash four weeks ago, you have probably held onto it; if you held debt four weeks ago, you probably haven't gotten all the cash flows you expected.
As yesterday's brief collapse of oil futures contracts demonstrated, the game of musical chairs almost became frighteningly real for traders:
When you read a news article or hear an economist mention the price of oil, it typically refers not to a physical barrel filled with viscous liquid but to the price of a futures contract that trades on the Chicago Mercantile Exchange. By convention, the “price of oil” is the going per-barrel price reflected in a futures contract for the ensuing month.
In the case of the most widely followed contract in the United States, that would be West Texas Intermediate crude, which you would need to physically obtain from storage facilities in Cushing, Okla., where major pipelines intersect.
Plenty of major entities trade such futures without ever thinking too much about those physical details — and certainly without getting any oil on their expensive suits. Speculators speculate, companies hedge their risks of price swings, and transactions take place at the level of abstraction on a computer screen.
But as each contract’s settlement date approaches, the financial speculators sell their contracts to “real” buyers of oil, like refineries. This can cause problems for traders who may be in over their heads. Chris Arnade, a trader-turned-author, said on Twitter on Monday that he once found himself in that position: “I ended up almost taking physical delivery of lots of oil.”
It gets worse:
All of that points to a deflationary collapse — a glut of supply of goods and services, and consequently falling prices — that surpasses anything seen in most people’s lifetimes.
Oil isn’t the only commodity with a plunging price. Corn futures have fallen 19 percent since early February. The price of inflation-protected government bonds suggests inflation will be only 0.56 percent a year over the coming five years, and the Consumer Price Index fell 0.4 percent in March.
In other words, the suckage has barely started for a lot of people.
So, instead of worrying about the end of the world as we know it, enjoy Chicago Public Rado's drone footage of a quiet city:
Welcome to day 31 of the Illinois shelter-in-place regime, which also turns out to be day 36 of my own working-from-home regime (or day 43 if you ignore that I had to go into the office on March 16th). So what's new?
Finally, via Bruce Schneier, the Dutch intelligence service had an unintentional back door into several other countries' communications. (Scheier says, "It seems to be clever cryptanalysis rather than a backdoor.")
Demand for petroleum has crashed so hard and so fast that North American oil producers have run out of space to store the excess. This morning the price of US crude collapsed, falling 105 500% to $-2 $-37.63 per barrel; Canadian oil prices also dropped negative. That's right, if you want to take a million or so barrels off their hands, they'll pay you to do so. (This only affects delivery by month's end; for delivery in May, oil still costs $20 a barrel.)
Meanwhile, in other horrific news:
Finally, the Covid-19 emergency has led to mass layoffs of architects, one of the hardest-hit professions in any recession. I'm currently reading Robert Caro's The Power Broker, his biography of Robert Moses, and just at the point where he mentions that in 1934, 5 out of 6 architects had lost their jobs. Everything old is new again.
Julie Nolke is a Canadian actor, comedian, and writer:
The president continues to ignore the opprobrium leveled against him after his asinine Tweets Friday morning:
In other news:
Finally, WBEZ, Chicago's NPR affiliate, has some tips for dating during quarantine.
Today is the 245th anniversary of the Battle of Lexington, which began the American Revolution.
It's also the 25th anniversary of the Murrah Federal Building bombing in Oklahoma City.
And day 28th day of Illinois' stay-at-home order.
Remember how I love my car? I love it even more today, and I'm a bit spooked by its costs.
A new filling station opened up about 1500 m from my house, and they have the lowest gas prices around. Even though I last filled my car on November 24th, in Indiana, and even though I've driven 1,623 km since then, I still had half a tank of gas. So for $10, I put 21 L of regular into the tank, which means my car cost me 0.6¢ per kilometer to operate over the last 144 days, and I got an average of 1.3 L/100 km fuel economy.
I have not paid that little for fuel—47.5¢/L—since January 2004. (In fairness, the car I owned then used premium gas.)
That said, I have not seen that fuel price in real terms since 2002. In fact, back when I bought my first car in June 1989, regular gas cost 32.5¢/L, which would be 67.6¢/L adjusted for inflation.
We live in very strange times.
No, really, the president Tweeted that earlier today:
I mean, what the actual f? (He also wants to liberate Michigan and Virginia, by the way.) Charlie Pierce warned only Monday that this kind of nonsense was coming:
The acting director of the Office of National Intelligence is encouraging citizens to break local laws, endangering themselves and others, in the middle of a pandemic. Of all the screwy moments that we have experienced since the founding of Camp Runamuck, this is going to rank very close to the top. And it is not going to be a surprise to anyone if another AstroTurf movement similar to the Tea Party rises, especially if the president* “opens up” the country at the beginning of May.
This nonsense is coming, and it’s going to be encouraged by the national government, and I don’t know how we avoid it.
Andrew Sullivan, after point out that the virus doesn't have a social message, breathed a sigh of relief that Trump is so very lazy:
But of course we all know by now, including the Republicans, that it is meaningless. Trump claims the powers of a tyrant, behaves like one, talks like one, struts like one, has broken every norm a liberal democracy requires, and set dangerous precedents that could enable a serious collapse in constitutional norms in the future.
This, in Bill Kristol’s rather brilliant phrase, is “performative authoritarianism.” It has a real cost — it delegitimizes liberal democracy by mocking it and corrodes democratic institutions by undermining them. But it is not the cost of finding ourselves run by an American Victor Orban. Orban saw the coronavirus emergency the way most wannabe strongmen would and the way I feared Trump might: as an opportunity to further neuter any constitutional checks on him and rule by decree. Trump saw it purely as an obstacle to his reelection message about a booming economy, a blot on his self-image, an unfair spoiling of his term. Instead of exploiting it, he whined about it. He is incapable of empathy and so simply cannot channel the nation’s grief into a plan of action. So he rambles and digresses and divides and inflames. He has managed in this crisis to tell us both that he is all-powerful and that he takes no responsibility for anything.
And I suspect that this creepy vaudeville act, in a worried and tense country, is beginning to wear real thin. A man who claims total power but only exercises it to protect his personal interests, a man who vaunts his own authority but tolerates no accountability for it, is impressing no one.
The emergency I feared Trump could leverage to untrammeled power may, in fact, be the single clearest demonstration of his incompetence and irrelevance
Simply put, "Trump can't lie his way out of this one," as several pundits have observed. Also:
Fun times, fun times. Good thing it will actually seem like spring tomorrow in Chicago after another snowfall last night.