Economic damage from shutdown continues to spread.

Image courtesy of Adobe Stock.

Summarized below are a few of the recent articles pointing to expanding economic damage from the shutdown. Destruction in the movie business is noticeable in recent days:

  • Second largest movie chain in the US closes all its theaters
  • Wonder Woman director worried the entire theater industry may die
  • Disney restructures in order to increase focus toward direct-to-consumer distribution channel and away from theatrical release
  • Sales tax collections in San Francisco collapse
  • Passenger cruise ships are getting scrapped

10/5/20 – Wall Street Journal – Regal Cinemas Suspending Operations at All US Locations – The chain with the second largest number of theaters in the U.S. has closed all of its US theaters after having reopened only two months ago. Article does not indicate when any of the theaters will be reopened.

Article says release dates for a dozen movies have been postponed.

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Did the lockdowns have any beneficial impact on the rate of new infections?

Enough time has passed that there is enough information to start analyzing the lockdowns. Preliminary info is not pretty. Image courtesy of Adobe Stock.

Indications are starting to emerge that the answer to the question may actually be no.

Previously mentioned one analysis which found a weak statistical correlation between weaker lockdown requirements and lower infection rate. The study found no correlation between the date that states started releasing the lockdown restrictions and subsequent infection rates.

 

The rate of infections accelerates rapidly and then hits an inflection point where the rate of infections either plateaus or the rate slows dramatically.

The following study suggests the lockdowns have no correlation to when the infection rates hit that transition point. In fact, the inflection point normally is reached before the lockdowns could have had any impact.

10/4/20 – National Review – Stats Hold a Surprise: Lockdowns May Have Had Little Effect on Covid-19 Spread

Authors pulled the daily infection rate for 13 states and graphed the data on a logarithmic scale. Seeing infections on a log scale makes it easier to see trends. There are visible transitions in every state from rapid acceleration to a flattened or greatly reduced infection rate.

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Economic bad news keeps rolling in, but hint of good news is on the horizon.

Parked airplanes idled by pandemic shutdown. Image courtesy of Adobe Stock.

The bad news on the economy called for the shutdown just keeps growing but there is a hint of good news in the near future. First the good news. 9/30/20 – CNBC – US economy plunges 31.4% in the second quarter but a big rebound is expected – Commerce Department calculations of Gross Domestic Product (GDP) for the second quarter were revised, which is routine, dropping from an annualized contraction of 31.7% down just a little to 31.4% reduction in GDP. (more…)

Minimal drop in number of new unemployment claims for last four weeks as of 9/26/20; more people going back to work.

Image courtesy of Adobe Stock.

The number of new claims for unemployment for week ending 9/26/20 has been about the same over the last five weeks, in the mid- to high 800 thousands. Last big drop was the week of 8/29/20. To again put this in context, before the government induced shutdown of the economy new claims averaged about 220,000 per week.

Good  news is the number of continuing claims for unemployment is continuing to drop, which means that more people are going back to work than loosing their job.

The devastating impact of the economic shutdown continues to be painfully obvious.

New Graphs

Starting this week that way the information is presented for this ongoing analysis will be in graphs.

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Observations from San Diego on economic destruction from shutdown.

View directly underneath Coronado Bridge shows the arches in the support towers. Photo by James Ulvog.

It is sad to personally observe the economic devastation from the shutdown.

We spent a few days in San Diego last week. Stayed at a hotel downtown near the harbor. Saw several things showing the severity of the economic damage.

Air travel

For quite a long time airplanes have not been allowed to leave San Diego International Airport until 6:30. It is funny to hear the first engine rev up a few seconds after 6:30 a.m.

I have noticed on previous vacations that there is a string of airplanes lined up ready to leave right at the stroke at 6:30. The planes take off approximately 1 minute apart.

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Stats on infection coronavirus rates not showing what you would expect. Time to open the economy.

Image courtesy of Adobe Stock.

We have been locked down long enough for the volume of statistics to build up to the point of allowing deeper analysis. As is always the case, the statistics can also be manipulated to give whatever answer you want. Deeper, honest analysis is starting to show surprising results, for example, the lack of correlation between infection rates and lockdown policies.

Surprising results on the low correlation will be mentioned after some game playing is described.

Wall Street Journal – 9/9/20 – The Sturgis Statistical Misfire – For this story remember the old saying

  • Figures don’t lie, but liars figure

The annual motorcycle rally in Sturgis, South Dakota routinely draws huge numbers of people to the town, whose population is only 7,000 people. Attendance at the 10-day event this year was lower than usual with an estimated 460,000 motorcycle enthusiasts hanging around.

Frightening news reports at the time said this would cause massive numbers of Covid infections leading to massive numbers of deaths.

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Slight improvement in new unemployment claims for week ending 9/12/20.

Image courtesy of Adobe Stock.

The number of new claims for unemployment for week ending 9/12/20 dropped a little, with “only” 860,000 people losing their jobs, down from an upwardly revised 893,000 the previous week. For contrast, before the government induced shutdown of the economy new claims averaged about 220,000 per week.

Better news in the data is the number of continuing claims for unemployment dropped about twice as much as the new claims, to 12.6M for the week ending 9/5/20.  That is the lowest since the shutdown started.

CNBC report on 9/17/20 says Jobless claims were lower than expected but unemployment growth is still sluggish. The number of new claims was slightly better than  the 875,000 which economists expected.

As I continue to sort out for myself what this means, will continue listing the stats I’m tracking.

The number of new claims for unemployment and number drawing unemployment is provided by Department of Labor. I calculated the net change, which I assume represents the number of new jobs, although it could also be that people dropping out of the job market wash into the new jobs number:

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New claims for unemployment slowly declining with new jobs exceeding new claims; 9/5/20

Image courtesy of Adobe Stock.

For the third time since start of the recession, the number of new claims for unemployment for the week ending 9/5/20 was below the 1,000,000 mark. For contrast, before the government induced shutdown of the economy, new claims averaged about 220,000 per week.

On the other hand, the number of new claims was flat for the week – the damage from the shutdown in terms of new claims did not go down.

As I continue to sort out for myself what this means, will keep listing the stats I’m tracking.

The number of new claims for unemployment and number drawing unemployment is provided by Department of Labor. I calculated the net change, which I assume represents the number of new jobs, although could also be that people dropping out of the job market could wash into that number:

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Devastation from government ordered shutdown of the economy – 3 of 3

What the California economy might look like by the time it is allowed to reopen. Photo of abandoned farm in North Dakota by James Ulvog.

This is the third in a series of posts describing the damage caused by shutting down the economy. First post discussed recent news on economic damage. Second post described ongoing health damage.

Some things are *not* going wrong

Just under half a million people attended the motorcycle rally in Sturgis, South Dakota from August 7 through 16.

9/1/20 – PJ Media – OH THE HORROR! Sturgis Motorcycle Rally COVID-19 Numbers Are in and They Are Shocking

Half a million. Official tally is 462,000.

In one small town.

Check out any of the pictures from the rally and you will notice a distinct lack of masks and social distancing.

Expectations in most media sources were for this event to produce massive amounts of infection.

Half a million people. In one town.

The tracking results are in from the massive numbers of people who were infected and the resulting fatalities from this massive event.

It is shocking. Amazing. Head-shaking. Astounding.

Best info available is that:

  • 196 people tested positive for COVID with results linked to attending Sturgis.
  • 4 people died.

To put that in context, 5 people died of motorcycle accidents in Sturgis during the rally.

Growing awareness something is wrong with lockdowns

8/24/20 – Wall Street Journal – New Thinking on COVID Lockdowns: They are Overly Blunt and Costly – Article has a massive amount of information on the course of the pandemic, wide range of strategies by national and state governments, and large volume of statistics. The story is told basically scrambled egg style with no pattern or trends or storylines that I can easily summarize.

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Devastation from government ordered shutdown of the economy – 1 of 3

What the California economy might look like by the time it is allowed to reopen. Photo of abandoned farm in North Dakota by James Ulvog.

Over the last several weeks I have accumulated a number of articles describing the economic and health damage caused by the government ordered shutdown of the economy.

I’ve been wanting to post these for a while. In light of the California government imposing more severe constraints on when the economy will be allowed to start functioning again, it is now time to publish.

Economic damage

7/30/20 – Wall Street Journal – US Economy Contracted at Record Rate last Quarter; Jobless Claims Rise to 1.43 million – The preliminary estimate of the collapse in the US economy for the second quarter came in at an annualized 32.9% drop. Again, that is annualized. In addition, it will be revised in each of the next two months as additional data is gathered by the feds.

That follows an annualized drop of 5% in the first quarter.

8/25/20 – CNBC – American Airlines to cut 19,000 jobs when federal aid expires in October(more…)

California shut down again.

Economic performance, health outcomes, and educational achievements in California after a second round of shutdown. Image courtesy of Adobe Stock.

We are a week into our second shutdown here in California.

Restaurants may only provide food to-go or for outdoor dining. The outdoor dining option only helps restaurants stay in business if they have enough outdoor patio space to have enough tables to seat enough customers to stay in business and then only if the temperature (during July and August!) is tolerable.

Churches are prohibited from having worship services inside. Churches who are rich enough to have lots of outdoor space to sit and well off enough to afford two sets of audio equipment can worship live. The first amendment has been partially suspended again.

Gyms, salons, and bars are closed.

On 7/14/20, the Wall Street Journal also explained the issue in a short editorial: California’s Second Shutdown.

The core issue:

A lockdown will cause more harm (economically, socially, physically, psychologically, educationally, and emotionally) than the pandemic will cause.

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New claims for unemployment at 7/11/20 continue at high level. Good news is new jobs continue to be higher than lost jobs.

Image courtesy of Adobe Stock.

I’ve been scratching my head for a long time wondering how the tally of new unemployment claims can continue at skyhigh catastrophe levels while the unemployment rate has not gone vastly higher than it already has.

Head scratching from another direction – Number of new claims is steady at a level that is at least six times higher than it was right before the pandemic started yet the number of people drawing unemployment is declining.

How can that be?

 

Think I have finally sorted out the answer after several weeks of looking at additional data:

  • The number of new jobs created each week is running far higher than the number of lost jobs.

To get to this point for yourself, compare the number of people drawing unemployment with the change from week to week, add in the number of new unemployment claims, and then plug the difference as people who have gone back to work meaning they have found a job. It is too early for people to dropping off unemployment because their allowed weeks gas run out so the change in people drawing unemployment has to be new jobs. Let me know if I missed something in this concept.

Here is my analysis of the number of people drawing unemployment, the number of new claims, and the resulting number of new jobs:

week new back to # drawing
ended claims work unempl.
6/13/2020   1.54    20.29
6/20/2020   1.48  2.54    19.23
6/27/2020   1.41  1.88    18.76
7/4/2020   1.31  2.31    17.76
7/11/2020   1.30  1.72    17.34

 

Data source

Weekly press release from the Department of labor: Unemployment insurance weekly claims

Number of people drawing unemployment

Here is the weekly tally of people drawing unemployment, which is revised in the subsequent week:

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Settled matters outlined in the Declaration of Independence.

John Trumbull: The Declaration of Independence painted by John Trumbull. Photograph by Thomas Cizauskas is in the public domain (Public Domain Mark 1.0)

 

Several statements in the opening of the Declaration of Independence are settled matters. The issues are resolved. They are final.

If those key issues are not final but are instead malleable or alterable or subject to revocation the consequences will be horrible.

A speech by Pres. Calvin Coolidge explained this idea back in the 1920s. Let’s expand the concept of those ideas being resolved issues.

Please consider President Calvin Coolidge’s Speech on the 150th Anniversary of the Declaration of Independence on July 5, 1926.

He lists the three resolved issues:

“Three very definite propositions were set out in its (the Declaration of Independence) preamble regarding the nature of mankind and therefore of government. These were the doctrine that

all men are created equal,

that they are endowed with certain inalienable rights, and that

 therefore the source of the just powers of government must be derived from the consent of the governed.” (emphasis added)

He explained these issues are settled, resolved, final.

We can expand on those ideas. We need to bring them into further fruition. We can dive deeper into their meaning.

Setting them aside or replacing them means we go backwards. Declaring they are no longer true is regression to the ancient past.

More eloquently than I could ever describe, the president said:

“About the Declaration there is a finality that is exceedingly restful. It is often asserted that the world has made a great deal of progress since 1776, that we have had new thoughts and new experiences which have given us a great advance over the people of that day, and that we may therefore very well discard their conclusions for something more modern. But that reasoning can not be applied to this great charter. If all men are created equal, that is final. If they are endowed with inalienable rights, that is final. If governments derive their just powers from the consent of the governed, that is final. No advance, no progress can be made beyond these propositions. If anyone wishes to deny their truth or their soundness, the only direction in which he can proceed historically is not forward, but backward toward the time when there was no equality, no rights of the individual, no rule of the people. Those who wish to proceed in that direction can not lay claim to progress. They are reactionary. Their ideas are not more modern, but more ancient, than those of the Revolutionary fathers.”

Expanding those foundational concepts

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Text of the Declaration of Independence:

From the National Archives:

In Congress, July 4, 1776.

The unanimous Declaration of the thirteen united States of America, When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.–Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world. (more…)

Happy 244th birthday America!

American militia reenactors at Redcoats & Rebels Revolutionary War Reenactment by Lee Wright is licensed under CC BY-SA 2.0

In the 1770s and 1780s, a ragtag collection of citizen soldiers waged a war of independence against the most powerful empire on the planet…

British Army reenactors at Redcoats & Rebels Revolutionary War Reenactment by Lee Wright is licensed under CC BY-SA 2.0

…and defeated them.

 

Two hundred forty-four years ago today marked the start of this wonderful, aspirational, fantastic, heaven-blessed, messy, delightful, powerful, flawed, and glorious experiment called the United States of America which has delivered unimaginable levels of freedom to hundreds of millions of people here in the US of A and contributed massively to the freedom of hundreds and hundreds of millions more around the world.

That experiment had multiple severe flaws baked into the design which are taking a long time to correct, yet the aspirational dreams then drove and still drive that wonderful experiment to constant improvement.

Before our independence, anything resembling a democracy had been absent for so many long centuries. Apart from the ruling elite, ordinary people were merely the subjects of their ‘betters.’  Common folk only had the very few rights and freedoms that those born to power consented to give them, like crumbs thrown from the table.  You and I would only have been able to do what those controlling us allowed us to do.

And then came those rabble-rousing founding fathers.

The results of this grand experiment in self-government, not tried before, has produced fabulous results.

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