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Trump's push to open economy could come at cost of lives – CTV News

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WASHINGTON —
The contrast could hardly be more stark. Gov. Andrew Cuomo of New York has said that if all of his sweeping, expensive measures to stem the coronavirus saved one life, it would be worth it. U.S. President Donald Trump has another view: The costs of shutting down the economy outweigh the benefits, frequently telling Americans that 35,000 people a year die from the common flu.

Though it may seem crass, the federal government actually has long made a calculation when imposing regulations, called “the value of a statistical life,” that places a price tag on a human life. It has been used to consider whether to require seat belts, airbags or environmental regulations, but it has never been applied in a broad public health context.

The question is now an urgent one given that Trump in recent days has latched on to the notion that the cure for the pandemic should not be worse than the disease and argued that “more people are going to die if we allow this to continue” if the economy remains closed. He has targeted a return a semblance of normalcy for the economy by Easter Sunday, April 12.

Critics say he’s presenting the nation with a false choice at a moment when deaths and infections from the virus are surging.

“We’re not going to accept a premise that human life is disposable,” said Cuomo, whose state has seen far more infections and deaths from COVID-19 than any other state. “And we’re not going to put a dollar figure on human life.”

For decades, the federal government has made calculations on how policies intended to safeguard American health could impact the economy. Since the Reagan administration, federal agencies have been required to perform analysis of any proposed regulations that are expected to have $100 million or more impact on the economy.

The Environmental Protection Agency, for example, conducts cost-benefit analysis to estimate in dollar terms how much people are willing to pay for reductions in their risk of death from adverse health conditions caused by pollution. The Transportation Department estimates the additional cost that consumers would be willing to bear for improvements in safety at $9.6 million.

Now, the push-pull of when to re-open the economy during the coronavirus crisis centres on a similarly bleak question: What’s an economically acceptable death toll? Putting dollar figures on the value of life and health is inherently uncomfortable, one expert said.

“People hate that question,” said Betsey Stevenson, an economics and public policy professor at the University of Michigan who served on the White House’s Council of Economic Advisers during the Obama administration. “By laying out the math in such a crude way, people cringe when they see it.”

Days into his own call for Americans to dedicate themselves for 15 days to social distancing, including staying home from work and closing bars and restaurants to help try to stall the spread of the disease, Trump has changed his tune.

Trump has grumbled that “our country wasn’t built to be shut down” and vowed not to allow “the cure be worse than the problem.”

“The LameStream Media is the dominant force in trying to get me to keep our Country closed as long as possible in the hope that it will be detrimental to my election success,” Trump tweeted Wednesday. “The real people want to get back to work ASAP. We will be stronger than ever before!”

He also pushed back against suggestions that he is being cavalier about the prospect of more deaths being caused by a premature of reopening of the economy. “How many deaths are acceptable to me?” Trump told reporters Wednesday evening. “None.”

But Democrats say that Trump was prioritizing the economy over the health and safety of Americans.

“I’d like to say, let’s get back to work next Friday,” said former Vice-President Joe Biden, the front-runner for the Democratic presidential nomination. “That’d be wonderful. But it can’t be arbitrary.”

Trump certainly has his defenders. Fox News commentator Britt Hume has called it an “entirely reasonable viewpoint” that older Americans would be willing to sacrifice for the good of the economy, and Texas Lt. Gov. Dan Patrick has said he’s “all in” on lifting social distancing guidelines in order to help the economy.

Mike Leavitt, a Health and Human Services secretary in the George W. Bush administration, said the battle against the virus is shaping into a “supremely local fight” and communities may need to periodically adjust as the crisis unfolds.

“Each jurisdiction may not come to the same conclusion — because each jurisdiction may have different situations about shopping and businesses reopening,” Leavitt said in an email.

In the recent past, the government has also put a dollar figure on American life in the aftermath of man-made calamities, including the 9-11 attacks and the 2010 BP oil spill in the Gulf of Mexico, which killed 11 and devastated the regional economy, to compensate victims.

Kenneth Feinberg, who administered the victims’ funds stemming from those events, said the formula used in the nation’s courts was a simple one: What would the victim have earned over the course of their life at work but for the tragedy that took their life? On top of that, there was some added compensation for pain and suffering and emotional distress, he said.

“It is a rather straightforward calculation,” Feinberg said.

But when it comes to the current pandemic, Feinberg said calculating the impact is not so simple.

“When somebody says, `You know the risk of the virus is not as great as the risks to everybody through a deteriorating economy,’ that’s a choice that everybody will have to make,” Feinberg said.

In the case of the coronavirus crisis, some economists and policy experts say the pandemic continues to present too many unknowns to employ the sort of coldly calculated, cost-benefit analysis that’s been used to evaluate the impact of policies such as federal highway and air quality rules.

“It doesn’t help to save the economy if a tremendous number of people have died or fallen ill and their lives are changed forever,” said Lisa Heinzerling, who grappled with regulatory impact on the economy as the head of EPA’s policy office at the beginning of the Obama administration.

Northwestern University economists Martin Eichenbaum and Sergio Rebelo and German economist Mathias Trabandt said in a working paper published this week that optimal containment efforts would lead to deeper economic damage and that recession in the U.S. was inevitable. But the economists also projected that maintaining social-distancing measures before the U.S. hits its peak in infections “saves roughly half a million lives.”

Stepping back from efforts to preserve human life in the midst of an event of this scale could also have enormous impact on the trust of institutions for generations to come, said David Ropeik, a former instructor of risk communication at the Harvard School of Public Health,

“The benefit of an all-out fight against a virus includes reassuring the public that the government is on their side. Backing off that fight reasonably questions whether the government we have created to protect us from things like this crisis will do so,” said Ropeik, the author of the book “How Risky Is It, Really?”

“The loss of that to protect the economy is undermining that faith. How can you price that?” he asked.

For most people, the new coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia and death. The vast majority of people recover.

——

Madhani reported from Chicago.

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Florida, Nevada may be hit hardest by coronavirus economic shock: study – National Post

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WASHINGTON — Florida beaches remained packed with partying college students as the coronavirus crisis gathered force, and the Republican governor was slow to impose social distancing in a tourist-dependent economy.

That may come back to haunt the U.S. state – and not just in the form of a sky-rocketing case load. According to a newly released study by Oxford Economics, Florida is among the states most vulnerable to the economic shock being caused by the pandemic. (https://reut.rs/34cmzs3)

Oxford ranked the 50 U.S states and Washington D.C. using 10 measures its economists felt could make a local economy more vulnerable, including the share of the population over 65, dependence on retail sales, and the importance of the tourist industry.

Maine, with its proportionately older population and comparatively large number of people who are self-employed or work in small businesses, is considered the most vulnerable state economy, according to Oxford. Nevada, with its massive casino-based tourism industry, was second, while rural Vermont was third.

Florida is the only heavily populated state near the top of the list, with a comparatively large share of its 21 million residents over the age of 65, and an economy that is relatively dependent on retail sales and tourism.

The state’s COVID-19 case load topped 10,000 last week and it is adding a thousand cases a day. Governor Ron DeSantis imposed a statewide “stay at home” order that took effect Friday, weeks after some U.S. states.

“We see what’s going on in New York now, we see that people are dying,” Rick Scott, the Florida senator, told Fox News Channel on Saturday. “People are taking this very seriously now.”

States such as New York and California that have so far had the heaviest COVID-19 case loads may actually be among the more economically resilient, the Oxford team found.

“Lockdown and containment measures are the key determinants of first-round economic impacts of the coronavirus, but structural economic vulnerabilities determine the severity of second-round impacts,” Oxford lead economist Oren Klachkin wrote. Long-term results could depend on the strength of local government budgets and health systems.

Economists are struggling to get a grip on the potential aftermath of the crisis as it continues to deepen. Companies cut more than 700,000 jobs from their payrolls in March, a likely understated measure of rapidly rising unemployment: More than 6 million people filed for unemployment benefits in the week ended March 28 alone.

President Donald Trump initially downplayed the dangers of the virus and did not quickly recommend nationwide health orders. Local governments, which vary widely in their finances and ability to cope, had different initial responses to the threat, a fact that could shape the ultimate outcome of the crisis nationally.

The situation has produced a quick flowering of research on pandemic economics, with most studies finding that stricter health measures taken early on lead to deeper, but shorter, economic downturns and faster recoveries.

There are political as well as economic implications.

Florida, for example, is an important battleground state in the U.S. electoral system, and the perceived success or failure of efforts to control the virus and support local businesses and households could influence Trump’s reelection chances.

IHS Markit U.S. regional economist Karl Kuykendall also ranked Florida among the more vulnerable states, using a different methodology focused on estimated declines in employment and economic output. The state may lose about 8% of its jobs by the end of the year, he calculated.

The manufacturing heavy “rust belt” states from Pennsylvania to Michigan, also politically important constituencies that swung the 2016 race for Trump, are in line to take similarly heavy hits to employment, Kuykendall estimated.

Personal finance site WalletHub.com used a broader set of metrics, including work from home capacity and local financial strength, for another ranking.

Florida is in the middle of that pack because of its comparatively few small businesses and stronger state finances, WalletHub found. It said Louisiana was most “exposed,” with Maine and Nevada also high on the list. Among the more populous states, Pennsylvania and Illinois were in WalletHub’s top 10.

None of the studies accounted for the help coming to households, businesses and local governments from the $2.3 trillion emergency rescue package approved by Congress in late March, or the wide set of programs established by the Federal Reserve.

The combined aim of those efforts is to offset the economic impact of the virus. Officials are focused now on whether the aid can reach where it is needed fast enough to matter.

(Reporting by Howard Schneider: Editing by Heather Timmons and Daniel Wallis)

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Japan economy: Shinzo Abe has $1 trillion coronavirus relief plan – CNN

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Japanese Prime Minister Shinzo Abe on Monday announced a 108 trillion yen ($989 billion) relief package — a staggering amount equivalent to about 20% of the annual output of the world’s third biggest economy.
It includes tens of billions of dollars in cash handouts for families and small business owners who have lost their incomes because of the virus. The package also features tax breaks and zero-interest loans.
Abe is expected to give more information at a press conference in Tokyo on Tuesday.
Japan is the latest country to unleash a massive amount of government spending aimed at helping households and businesses cope with the sudden shock to the global economy as countries go into lockdown.
The United States last month passed a $2 trillion stimulus bill, the largest emergency aid package in history. Germany, France, the United Kingdom, Italy, Spain and other major economies have also announced huge spending plans.
Even in the coronavirus pandemic, the Japanese won't work from home until Shinzo Abe makes them
The flood of stimulus comes as the number of coronavirus cases continues to mount. So far more than 1.27 million people worldwide have been infected, while 69,000 people have died, according to Johns Hopkins University. Japan has recorded more than 3,600 cases and 85 deaths.
Recent unemployment, industrial production and retail sales data have suggested that Japan’s economy was showing signs of resilience as the virus ripped through Asia in February, noted Tom Learmouth, Japan economist at Capital Economics. But “there is no doubt that coronavirus disruption will deal a severe economic blow over coming months,” he said in a research note on Friday.
Infections have accelerated in major cities such as Tokyo and Osaka, he said, adding that concerns about a “second wave” of the virus has led residents to stay home and shops to close.
Abe also announced that he would declare a state of emergency on Tuesday, lasting for about one month — a notable development, as the prime minister had declined to do so as recently as last week.
While Tokyo’s governor has urged the city’s 13.5 million residents to telework where possible until April 12, many workers have continued to commute into their offices. About 80% of companies in the country do not have the ability to let their employees work remotely, according to 2019 government data, and Japan’s work culture makes it hard to persuade people to stay home.
— CNN’s Will Ripley, Yoko Wakatsuki, Julia Horowitz and Emiko Jozuka contributed to this report.

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U.S. Is Nowhere Close to Reopening the Economy, Experts Say – The New York Times

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WASHINGTON — How long can we keep this up?

It is still very early in the U.S. effort to snuff a lethal pandemic by shutting down much of the economy. But there is a growing question — from workers, the White House, corporate boardrooms and small businesses on the brink — that hangs over what is essentially a war effort against a virus that has already killed more than 9,000 Americans.

There is no good answer yet, in part because we don’t even have the data needed to formulate one.

Essentially, economists say, there won’t be a fully functioning economy again until people are confident that they can go about their business without a high risk of catching the virus.

“Our ability to reopen the economy ultimately depends on our ability to better understand the spread and risk of the virus,” said Betsey Stevenson, a University of Michigan economist who worked on the White House Council of Economic Advisers under President Barack Obama. “It’s also quite likely that we will need to figure out how to reopen the economy with the virus remaining a threat.”

Public health experts are beginning to make predictions about when coronavirus infection rates will peak. Economists are calculating when the cost of continuing to shutter restaurants, shopping malls and other businesses — a move that has already pushed some 10 million Americans into unemployment, with millions more on the way — will outweigh the savings from further efforts to slow the virus once the infection curve has flattened out.

Government officials are setting competing targets. President Trump has pushed his expected date of reopening the economy to the end of April. “We have to get back to work,” he said in a briefing on Saturday. “We have to open our country again. We don’t want to be doing this for months and months and months. We’re going to open our country again. This country wasn’t meant for this.”

Some governors have set much more conservative targets, like Ralph Northam of Virginia, who canceled the remainder of the school year and imposed a shelter-at-home order through June 10. Other states, like Florida, only recently agreed to shut activity down but have set more aggressive targets — April 30, in the case of the Sunshine State — to restart it.

Those targets are at best mildly informed guesses based on models that contain variables — including how many people have the virus and how effective suppression measures will prove to be. The models cannot yet give us anything close to a precise answer on the big question looming over Americans’ lives and livelihoods.

To determine when to restart activity, said R. Glenn Hubbard, a former top economist under President George W. Bush, “we need more information.”

Interviews with more than a dozen economists, many of whom are veterans of past presidential administrations, reveal broad consensus on the building blocks the economy needs — but does not yet have — to begin the slow process of restoring normalcy in the American economy.

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That includes widespread agreement that the United States desperately needs more testing for the virus in order to give policymakers the first key piece of evidence they need to determine how fast the virus is spreading and when it might be safe for people to return to work.

Without more testing, “there’s no way that you could set a time limit on when you could open up the economy,” said Simon Mongey, a University of Chicago economist who is among the authors of a new study that found that rapid deployment of randomized testing for the virus could reduce its health and economic damage.

“It’s going to have to depend on being able to identify people that have the coronavirus, understanding how readily those people can transmit the disease to others and then kind of appropriately isolating people that are contagious,” Mr. Mongey said.

Policymakers will also need better data on how strained hospitals and entire regional health care systems are likely to be if the infection rate flares up and spreads. Ideally, they would sufficiently control the rate to establish so-called contact tracing in order to track — and avoid — the spread of the virus across the country.

Once such levels of detection are established, it is possible that certain workers could begin returning to the job — for example, in areas where the chance of infection is low. Some experts have talked about quickly bringing back workers who contract the virus but recover with little effect. Testing is the best way to identify such workers, who may have had the virus with few or no symptoms and possibly not realized they were ever infected.

While they wait for the infection rate to fall, policymakers will need to provide more support to workers who have lost jobs or hours and to businesses teetering on the brink of failure. That could mean trillions more in small business loans, unemployment benefits and direct payments to individuals, and it could force the government to get creative in deploying money to avoid bottlenecks.

Lisa D. Cook, a Michigan State University economist who worked in the Obama White House, said lawmakers should consider funneling $1,500 a month to individuals through mobile apps like Zelle in order to reach more people, particularly low-income and nonwhite Americans who disproportionately lack traditional bank accounts. Mobile payments, Ms. Cook said, would also make it “easier and faster to make onward payments to family members and friends in need.”

The government’s efforts could prove crucial to maintaining public support for what amounts to a prolonged economic drought. Adam Ozimek, the chief economist at Upwork, said additional money for small business will be crucial throughout the full extent of the crisis — both to prevent a crush of business failures and to keep owners and customers from flouting the national effort to reduce infections.

“I don’t think you can force hundreds of thousands of small business owners to voluntarily shut down and let failure happen to them,” Mr. Ozimek said. “They won’t do it, the public won’t support it, and frankly I don’t think local authorities would stop them.”

Policymakers will also need to give better support and protection to Americans who are putting their own health at risk to keep the essential parts of the economy running, like doctors, nurses, grocery store clerks and package delivery drivers.

Heather Boushey, the president of the Washington Center for Equitable Growth, a think tank focused on inequality, said those workers needed to have paid sick leave, adequate health coverage, access to coronavirus tests and affordable care for their children while they worked in order to stay healthy and to protect consumers from further spread of the virus.

“That is the economy at this point, those workers,” Ms. Boushey said. “And their health and safety is imperative to my safety.”

Policymakers will need patience: Restarting activity too quickly could risk a second spike in infections that could deal more damage than the first because it would shake people’s faith in their ability to engage in even limited amounts of shopping, dining or other commerce.

“It’s important not to lift too early,” said Emil Verner, a Massachusetts Institute of Technology economist who is a co-author of a new study that found that cities that took more aggressive steps to curb the 1918 flu pandemic in the United States emerged with stronger economies than cities that did less. “Because if we lift too early, the pandemic can take hold again. And that itself is very bad for the economy.”

Finally, policymakers will need to level with Americans — and themselves — and concede the possibility that the shutdown and its effects could drag well beyond the end of the month.

Aggressive suppression measures could lead to a gradual resumption of activity that begins in some places as soon as May, several experts said. But business as usual might not come back until a vaccine is developed, which could take more than a year.

“We should certainly be prepared for a meaningful level of deliberate suppression of economic activity for the rest of the year,” said Jason Furman of Harvard University, who was a top economist under Mr. Obama.

The Congressional Budget Office wrote on Thursday that it expected at least a quarter of the current suppression measures to last through year’s end, and that the unemployment rate could still be 9 percent at the end of 2021. Lawmakers need to be ready to keep filling the void, with support to businesses and workers, said Karl Smith, the vice president for federal policy at the Tax Foundation in Washington.

“The possibility of an unofficial quarantine for weeks or months after the official one is lifted is real,” Mr. Smith said. “After that, my guess is that the economy is in major trouble.”

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