Welcome to the worst economy ever
Let’s start with some bad news. And we won’t sugarcoat it.
This is the worst economy ever. That’s according to Federal Reserve Chairman Jerome Powell, who previewed some truly awful economic data headed our way when he spoke to reporters Wednesday.
“We are going to see economic data for the second quarter that is worse than any data we have seen for the economy,” Powell said. “There are direct consequences of the disease and measures we are taking to protect ourselves from it.”
It’s worse for minorities than for white Americans. Powell noted that a few months ago, the US labor market was the best ever for minorities. But as stay-at-home orders have shuttered restaurants, movie theaters, retailers and many other businesses, a disproportionate number of non-white Americans have lost their jobs.
“It is heartbreaking, frankly, to see that all threatened now,” Powell said of previous gains in non-white unemployment.
Read a deep dive into the economic data for the first part of the year, when the coronavirus stopped a booming economy in its tracks.
Health care hurt the economy. But not for the reason you think. Incredibly, one of the biggest drivers of decline was the health care industry. As hundreds of thousands of Americans contracted a deadly virus, overwhelming hospitals in New York especially, it was the suspension of money-making elective procedures that created one of the biggest hits to the economy.
Nonessential health care, essential meat processing. While much of the economy remains shut by the government, President Donald Trump essentially deemed meat processors essential to national security and has said, despite safety concerns, that they must stay open.
Tyson Foods, one of the largest meat processors, has promised two $500 bonuses for some workers. And they are ramping up safety in their plants.
It’s notable, however, that a good portion of the workers in meat processing plants are immigrants and minorities.
Read this story from CNN Business, which quotes a meat plant worker who tested positive for Covid-19 and doesn’t think many of his coworkers will return to the shuttered plant at the moment:
“I’m still trying to figure out: What is he going to do, force them to stay open? Force people to go to work?” he asked.
Human sacrifice zones. David Michaels was the Assistant Secretary of Labor for Occupational Safety and Health during the Obama administration. He slammed Trump’s executive order during an appearance on CNN.
“What President Trump has done is said, ‘We solved the bottleneck, we’re going to make you stay open,'” Michaels said. “It is a disaster for workers. We’re making these workplaces, these meat packing plants into human sacrifice zones.”
Very good news
There’s great hope about a drug called remdesivir to treat Covid-19. And the government broke normal protocol to tell us all about it.
Recovering more quickly — New data suggests patients with severe Covid-19 who took remdesivir could recover faster than patients who didn’t take it, the National Institute of Allergy and Infectious Diseases said Wednesday.
Fauci feels good — “The data shows that remdesivir has a clear-cut, significant, positive effect in diminishing the time to recovery,” said the institute’s director, Dr. Anthony Fauci.
It’s not a 100% recovery rate, but… — “Although a 31% improvement doesn’t seem like a knockout 100%, it is very important proof of concept,” Fauci said. “What it has proven is that a drug can block this virus.”
Telling us early — Normally, data about a drug’s efficacy wouldn’t be released this early from a preliminary trial.
But “whenever you have clear-cut evidence that a drug works, you have an ethical obligation to immediately let the people in the placebo group know so that they can have access,” Fauci said.
The New York Times reported the FDA could issue early authorization for the drug.
‘Operation Warp Speed’
The Trump administration is launching a project to accelerate the development of a potential coronavirus vaccine, a senior administration official told CNN’s Jim Acosta. The project, called “Operation Warp Speed,” has the goal of manufacturing hundreds of millions of doses that can be made available to Americans by the end of the year, the official said. Read more here.
This is great! And I don’t want to complain about it (I suggested a real-deal Manhattan Project in this newsletter this week). But why are they just now doing this? Why didn’t they do this months ago, before tens of thousands of Americans died?
Trump and Kushner have their own reality
On Tuesday, Trump told a reporter the US would soon be able to meet a Harvard-researcher-recommended benchmark of 5 million tests per day.
That same day Trump’s person in charge of testing said that would never happen.
“There is absolutely no way on Earth, on this planet or any other planet, that we can do 20 million tests a day, or even 5 million tests a day,” Adm. Brett Giroir, the assistant secretary of health, told Time Magazine.
He called the Harvard recommendation an “Ivory Tower, unreasonable benchmark.”
A great success? Really? Presidential adviser and son-in-law Jared Kushner bragged about the level of testing in the US during an interview on Fox News. He predicted much of the country would essentially be back to normal in June, and called the whole thing a success.
“Now that the tests are out there, it’s really about scaling supply chain, really in a historic manner and pace. So somebody asked me why it took so long, you should look at how did we do this so quickly? What’s really happened, it’s really extraordinary. So we don’t want to let Dr. Fauci down and we will make sure we get enough tests into the market,” he said.
The truth is that the White House has repeatedly misled about the level and availability of tests.
Here’s a fact-check on Kushner’s claims.
Data vs. decisionmaking
It does not appear any states have met the vague White House-endorsed benchmark of 14 days of downward virus trajectory. About half are starting to open up anyway.
Among the notable openers — Georgia and Texas — there has certainly not been a decrease.
We’ve actually got a chart for new infections in every US state. See them here.
And while anyone looking objectively at the curve of infections and deaths might wonder why things have plateaued, Kushner says that “we are on the other side of the medical aspect of this.”
State of denial still. CNN’s Stephen Collinson put it extremely well (as he always does), when he stated the clear fact that Trump still doesn’t grasp the enormity of this:
Humanity is facing three crises at the very least — medical, economic and social — that will cause financial and geopolitical reverberations for years. The grim state of the economy was underscored Wednesday morning when it was reported that first-quarter GDP fell 4.8%, the worst contraction since the Great Recession.
Yet Trump says he sees “light at the end of the tunnel” and acts as if America is nearly home free.
