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INCLINE VILLAGE (EOC)-- Any number of responses to the president's four point emergency relief policy executed this week might be evaluated as either noteworthy or meaningless;
"Ohio Gov. Mike DeWine praised Trump for issuing the order. 'He’s trying to do something. He’s trying to move the ball forward,' DeWine said. Still, he was noncommittal about whether Ohio would participate. 'We’re looking at it right now to see whether we can do this,' he said. " (1)
The governor has the authority to make a contribution in the equation by working with the White House. On the other hand, former presidential candidate, Hillary Clinton, had no positive comments about the equation;
“ 'It’s a stunt,' Mr Trump’s former presidential rival told MSNBC. 'There’s no doubt about it, it’s most likely, as even Republican senators have said, unconstitutional, bypassing the Congress, trying to spend money that he has no authority to direct.' " (2)
Former candidate Clinton would certainly know about "no authority" as she hasn't any herself other than to appear on talk shows and news programs and attempt to undermine the White House effort. The article written by Andrew Naughtie for The Independent follows under the headline, "Hillary Clinton attacks..." As reported today in the Times Union by Emilio Munson, the governor of New York, Mario Cuomo's reaction was;
"With the state already facing a $13 billion deficit this year — which is expected to nearly triple over the next four years — Cuomo likened the executive order to 'handing a drowning man an anchor.' He also blasted the change as 'unrealistic' and possibly illegal." (3)
The White House emergency executive order would cost the state an additional $4 billion. The same article cites Governor Andy Beshear of Kentucky as also being cash strapped. The governor added that his unemployment system is 20 years old and unable to adjust to the new demands."
The governor's comment about the updated system appears to contradict what White House economic adviser Larry Kudlow said in a CBS staff report today;
"I don't think there will be a huge delay. Labor Department has been working with the states. The states are the ones that process the federal benefits before. So, I don't see any reason why it would be all that difficult," (4)
That appeared to be in reaction to Senator Schumer's (D-NY) comment that "Most states will take months to implement it, because it's brand new. It's sort of put together with spit and paste."
With regard to that frail state-to-state unemployment benefit system, the original CARES Act called for those who qualified for the additional $600 perk above and beyond their normal unemployment benefit, Section 2107 stipulated an "Actively Seeking Work" clause;
"(A) IN GENERAL.—Subject to subparagraph (C), for purposes of paragraph (2)(D), the term 'actively seeking work' means, with respect to any individual, that such individual—
(i) is registered for employment services in such
a manner and to such extent as prescribed by the
State agency;
(ii) has engaged in an active search for employment
that is appropriate in light of the employment available
in the labor market, the individual’s skills and capabilities, and includes a number of employer contacts that
is consistent with the standards communicated to the
individual by the State;
(iii) has maintained a record of such work search,
including employers contacted, method of contact, and
date contacted; and
(iv) when requested, has provided such work
search record to the State agency." (5)
If the state unemployment systems are in shambles as the governor of Kentucky so apologetically emphasizes, it would not be possible to keep track of the efforts of the individual seeking work in the labor market. In addition, with innumerable reports of sunbathers flooding the beaches from Florida to California this summer, it is a stretch of the imagination to believe that anybody at all was "actively seeking work." That, of course, is speculation. Yet another example of the possible breakdown of state information tech systems, the California Health Director, Dr. Sonia Angell, resigned over what may have been related to the recent crash of the test reporting system. (6)
Not all differential equations have a complete solution. It is then necessary to find which parts of the equation are workable and which ones will need to undergo transformation and substitution in order to be solved. No one way back at the beginning of summer could have seen the Levitt surge-mitigation projection (7) go from a rather innocuous log bell curve to a parabolic explosion of confirmed cases. It was the result of rapid improvement in testing that gave a much clearer picture of the dilemma, especially the part of the failed CARES Act solution that ended the weekly unemployment bonus at the end of July. To what degree other shortcomings of the initial stimulus package begin to appear remains to be seen.
The president has attempted a bit of intuitive calculus, a bit of analytics in opposition to the rather straightforward inductive process of Congress where every coefficient and unknown variable needed to be carefully scrutinized, qualified and quantified before proceeding. In a pandemic of unprecedented modern day proportions, that process failed.
UPDATE: (08/11/20/0930PDT) --Unemployment data for each state can be found at the Department of Labor website. (8) That data notes an interesting trend. Taking California as an example, claims by the end of February, 2020 showed 161 thousand. By the end of March, when the statewide lockdown was ordered, the claims jumped to 1.65 million. By May, the level was at 2.35 million claims. but by the end of May it dropped to around 1 million. There is no indication as to whether the dramatic drop in May was attributed to benefits running our or an increase in the workforce, which may have been the reason given.
If the former is true, it shows that benefits did not last very long. Why would someone go back to work if they made more money with the extra $600 weekly from the CARES Act than they would by working? For May, weeks claimed shows 13 million with compensated roughly the same. That means, on average, the claims were good for 13 weeks per worker, a little over four months. According to an article by Richard Harroch reporting in Forbes (9), the total number of weeks for California are 26 with an additional provided by the CARES Act. That is in conflict with the Labor Department stats where only 13 weeks were used on average. It may be related to how many weeks the claimant qualified for and not the maximum number available.
Depending on the persistence of the virus in the population and its affect on an increase in joblessness, the overall benefit extension would only be necessary ideally until the winter holidays. There would be a limit of diminishing returns when unemployment benefits across the board for each state would not only be exhausted, but claims would eventually drop off.
Cited
(1) Move the Ball, https://www.wksu.org/post/morning-headlines-ohio-tops-100k-covid-19-cases-mac-postpones-fall-sports#stream/0
(2) No Authority, https://www.independent.co.uk/news/world/americas/hillary-clinton-trump-executive-orders-congress-constitutional-a9662651.html
(3) An Anchor, https://www.timesunion.com/news/article/Cuomo-says-Trump-s-executive-order-will-cost-15472774.php
(4) Updated System, https://www.cbsnews.com/news/trump-unemployment-insurance-executive-order-400-states-billions/
(5) Actively Seeking Work, https://www.congress.gov/116/bills/hr748/BILLS-116hr748enr.pdf, Page 45
(8) Dept. of Labor stats, https://oui.doleta.gov/unemploy/claimssum.asp
See also: Benefits, https://www.cnbc.com/2020/08/11/trumps-400-unemployment-boost-would-give-americans-708-a-week.html
Newton Prism image, https://warehouse-13-artifact-database.fandom.com/wiki/Isaac_Newton%27s_Prism?file=Newton%27s_prism_eperiment.jpg
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