August 13, 2022 / by 

 

Where’s the Beef? Republicans Don’t Understand Critical Infrastructure and Supply Chains

Over five weeks of a mostly-national shutdown, we never figured out how to protect essential workers.

By April 9, at least 9,000 health care workers — people trained in the proper use of personal protective equipment — had the virus and at least 27 health care workers had died. More than half had no known exposure to COVID outside of their work.

During the period of the shutdown, outbreaks occurred throughout the meatpacking industry, leading to shutdowns in a number of factories.

As a result, we’ve got meat shortages even as farmers have nowhere to sell their livestock. There were reports that a fifth of Wendy’s restaurants have run out of beef.

Stephens analyst James Rutherford said that a study of online menus for every Wendy’s location nationwide revealed that 1,043 restaurants — or 18% of its national footprint — have listed beef items as out of stock. More than 100 locations are still selling Wendy’s chili, which contains beef.

The shortages vary by state. Hundreds of Ohio, Michigan, Tennessee and New York restaurants are out of beef, while other states’ menus do not indicate any supply chain issues.

A Tectonix GEO analysis shows one reason why: people from one of the heavily affected areas traveled throughout the country. That suggests one possible way COVID has spread to a bunch of relatively remote factories was truckers serving the industry. I’ve heard inspectors also likely spread the virus between factories.

There were COVID clusters in a number of other professions that remained open during the shut-down: cops, prison guards, public transport workers, grocery store workers.

We never figured out how to protect these critical workers when it was relatively easy, when they and other essential workers made up most of the people on public transportation, when they were the only people relying on child care. That’s partly because we never managed to get the PPE and test and tracking systems in place to keep them safe.

And as a result, as the meat industry shows, our failure to protect critical workers has led to strains in a key part of our food supply chain, impacting consumers and suppliers up and down that supply chain.

Coronavirus has even threatened parts of our economy more directly responsible for keeping people alive. Before we shut down, for example, our Air Traffic Control was buckling, as the virus spread among workers in the close spaces of control towers.

If we were a sane nation, focused on the public good rather than bottom line dollars, we would have spent the five weeks of national shut-down figuring out how to protect critical workers and implementing those systems wherever workplaces had not shut down. We would have used that time to test the system and build up stocks of PPE and test kits needed to replicate the system in other, less essential work places. We would have perfected systems for keeping workers safe in the time of COVID, so we could learn how to do it while it was relatively easy, giving us something to replicate when the economy reopened.

We’re not a sane nation. We’re largely not focused on the public good.

And as a result, during the entire five weeks of the shutdown, we watched in fascination at what happens when you continue to work without implementing adequate measures to limit the spread of COVID without taking the obvious lessons from it. Again, we watched that happen at a time when it would have been easier to protect critical workers, because they were interacting with a limited number of other people. As the economy reopens, it will get harder to protect such workers, because there will be more people using public transportation and in grocery stores and relying on child care, increasing the likelihood that a single case can spread to more people, each potentially leading to the shut-down of an entire workplace three weeks later.

By failing to solve the problem of how you protect workers, those rushing to reopen the economy have set this country up for key failures in our rickety supply chain. Some of those failures will be nuisances, with factories idled because they’re missing a key part or shortages of non-essential items in stores. Some of the failures could lead to further health consequences. Some failures may happen in industries where workers are a lot harder to replace quickly. Those failures will make it harder for businesses that are open, as any outbreak will add to already inflated costs of operating, to say nothing of the blow to confidence such failures will bring.

It turns out, a lot of Republicans don’t understand how our economy works (though the same misunderstandings lay behind their opposition to bailing out the auto industry in 2008). They don’t understand that if critical parts of our fragile system break down, other parts begin to break down, potentially setting off a chain reaction.

And as a result, they’re rushing back to reopen the economy without first having done the basic things needed to operate businesses safely.

Yes, we need to take steps reopen the economy for the sake of the economy and our collective sanity. Which is why it was so important for the Federal government to put the pieces in place that would facilitate reopening the economy during the shut down. Only, the Trump Administration did not do that. It squandered the sacrifice made by the 33 million Americans who lost a job in that period. Now, not having put those pieces in place, the Trump Administration is pushing to reopen the world’s largest economy relying on little more than homemade masks to keep it running.


Rikers and Roosevelt: The Uncontrolled Human Experiment Occurring with Essential Workers (and Their Wards)

In the several weeks since much (though not all) of the country has been shut down, an uncontrolled human experiment with the country’s essential workers has been occurring.

I say that because those people still required to work — especially medical care workers, nursing home workers (and their clients), prison guards (and prisoners), cops, meatpackers, grocery store workers, warehouse workers, public transit workers, and sailors and other service members — have all been asked to work with a very limited test and tracking regime in place to limit spread among co-workers, wards, and their communities.

There’s inconsistent public data about how closely the federal government is tracking these communities (they’re obviously tracking the military, and after an initial attempt to hide the numbers, have provided skeleton baseline numbers; they’re reportedly not tracking nursing homes). So what has happened in these populations cannot be described with precision yet. But there is public reporting on how seriously affected each of these groups are — and whether, and when, their employers took appropriate protective measures. Thus far, the anecdotal reports show that some individual institutions have been more successful than others at preventing mass infection, whereas certain kinds of worksites — prisons and ships — will have much less success controlling an outbreak given existing tools.

These professions are where spread is happening even with shutdowns (though some, like meatpackers, are often located in areas more likely to have shut down late or not at all). Thus, amid the debate about when we can reopen the economy, what happened to workers and their wards in these professions provide lessons about what protections have to be in place before any place can open up, how widespread COVID might get amid populations that social distance but don’t stay home, and what pitfalls are likely once we do open up.

Along the way, a lot of people have died.

Update: Elizabeth Warren and Ro Khanna have called for a Workers Bill of Rights that includes–but then adds to–a lot of the protections included in this discussion.

Medical care workers

In a recent presser, Trump claimed that the federal government eventually will figure out how many medical workers have contracted COVID-19 (though I suspect that number won’t be made public until after the election). But it hasn’t done so yet. Buzzfeed collected what was publicly available and found that key states, including New York, Louisiana, and Michigan, are not tracking this number either yet.

Buzzfeed tallied 5,400 cases in those states that are counting it, which would work out to be 1% of the cases on the day of the story (though because some of the most important states aren’t counting this, it must be a higher percentage of national cases).

At least 5,400 nurses, doctors, and other health care workers responding to the coronavirus outbreak in the United States have been infected by the disease, and dozens have died, according to a BuzzFeed News review of data reported by every state and Washington, DC. However, the true number is undoubtedly much higher, due to inconsistent testing and tracking.

[snip]

As of Thursday afternoon, 12 states reported health care worker infections: Alabama (393), Arkansas (158), California (1,651), Idaho (143), Maine (97), New Hampshire (241), Ohio (1,137), Oklahoma (229), Oregon (153), Pennsylvania (850), Rhode Island (257), and West Virginia (76). Additionally, Washington, DC (29) and Hawaii (15) reported infections at a specific hospital, not state or territory-wide. On Friday afternoon, Kentucky reported 129 health care worker infections.

In Ohio and New Hampshire, health care worker infections represented more than 20% of total confirmed cases in the state. It’s unclear if this is due to health care workers having greater access to testing there compared to other states, or something else, but it highlights the dangers these workers face. In the other states that broke out data on health care workers, rates ranged from a low of nearly 5% in Pennsylvania up to 17% in Maine and Rhode Island.

Some other states are trying to collect this information but not yet sharing it publicly, with officials citing reporting holes in their data.

[snip]

And in at least nine states, infection rates among health care workers are not being tracked at all. That includes New York and Louisiana, two of the worst-hit states by the outbreak, where officials said they aren’t specifically collecting this information. In Michigan, another hard-hit state, 2,200 health care workers have reportedly been infected, yet the state itself is not tracking infections. (Because the reporting on these cases did not come from the state itself, BuzzFeed News is not including them in its total.) Fourteen states do not make these statistics publicly available and did not respond to questions from BuzzFeed News as to its collection.

As that story noted, these numbers are unreliable both because health care workers may have better access to tests, but are, in many cases, being discouraged from taking them. And workers are so overwhelmed right now it may undermine record-keeping.

Plus, there are significant discrepancies from hospital to hospital regarding how much PPE is available to workers, not to mention how overwhelmed the individual hospitals are. Hospitals that succeed at keeping infection rates low will have lessons to offer on what might successfully limit transmission among workers who are highly trained in doing so, lessons that would be of use in professions not normally trained to prevent contagion.

Nursing homes

Nursing homes are another obvious cluster — so much so that they may make up a huge proportion of what we’re seeing in non-crisis localities (as is the case in my own county). Like medical care workers, there’s not an official count; indeed, some states (especially Florida) are affirmatively hiding how badly nursing homes are being affected and ending efforts to count clusters among seniors. Nevertheless, NBC found over 2,200 deaths in the states that do count such things, representing a huge spike since March 30 (which would suggest nursing homes are where the virus has continued to spread since states and localities that have shut down).

Nearly 2,500 long-term care facilities in 36 states are battling coronavirus cases, according to data gathered by NBC News from state agencies, an explosive increase of 522 percent compared to a federal tally just 10 days ago.

The total dwarfs the last federal estimate on March 30 — based on “informal outreach” to state health departments — that more than 400 nursing homes had at least one case of the virus.

[snip]

Thirty-six states reported a total 2,489 long-term care facilities with COVID-19 cases.

The toll of these outbreaks is growing. NBC News tallied 2,246 deaths associated with long-term care facilities, based on responses from 24 states. This, too, is an undercount; about half of all states said they could not provide data on nursing home deaths, or declined to do so. Some states said they do not track these deaths at all.

As with the county of medical workers, key states like Michigan and Florida are tracking neither which facilities have clusters nor how many deaths there are. New York is tracking this statistic.

Nearly 60 percent of the deaths tallied by NBC News occurred in New York, where more than 1,300 residents of nursing homes and assisted living facilities have died, according to the state health department.

That would represent around 18% of the deaths New York had recorded by April 9, the day before NBC published.

And these data generally only count residents affected, not the workers who might spread the virus outside of the facilities.

As Andy Slavitt explained in his Rachel Maddow appearance to discuss this data, one of the key lessons in the outbreaks at nursing homes and other assisted living facilities (though the lesson applies to all these “essential” professions) is the differential impact. Some facilities have succeeded in containing the virus, others have failed to contain known outbreaks. Those that have succeeded have lessons to offer about how to deal with this virus effectively.

The way this will get fixed — this is not to embarrass anybody — but the way this will get fixed is there are nursing homes that are doing it right. And the nursing homes that are doing it right can give guidance to the nursing homes that are doing it wrong. We don’t have enough time to go back to the drawing board and create new regulations — I wish we did. But in the middle of a crisis, I’d get them all on the phone, we’d be sharing best practices, we’d be publishing them, and we’d be slowly and slowly taking down infection rates. And for those that couldn’t do it, we would be moving people into facilities that could.

Nursing homes are, along with prisons, probably the hardest population to keep safe from COVID and there are aspects of both (the underlying health problems and the immobility and close quarters of the facilities) that are impossible to eliminate. But that means the lessons learned here — particularly the lessons learned about how to keep the workers safe (and therefore to prevent intra- and extra-facility spread through them), would be critical to share not just within the nursing home industry, but more generally with businesses as they think about reopening down the road.

Update: According to the AP, Louisiana has now stopped providing details on infections in nursing homes.

Prisons

Immediately after the impact of COVID became clear, prisoner advocates started calling for decarceration to alleviate crowding and remove the most vulnerable prisoners, where appropriate, from prison. Ohio’s Republican Governor Mike DeWine has even laid out the epidemiological reason to take such measures (that is, the obvious conservative case to release as many prisoners as possible), and Oklahoma’s Republican Governor Kevin Stitt (who was otherwise tardy in taking measures to stop the spread), is preparing to commute the sentences of 452 people to empty the prisons. Even Bill Barr has pushed for prisoner releases. His efforts risked disproportionately help white prisoners, but because BOP is now prioritizing those facilities already affected by an outbreak — meaning they’re acting reactively, not proactively — that has not yet been the practice. That said, Federal policies on releases are changing day-to-day, with some prisoners cleared for release but then continued to be held.

BOP has an official tracking number — though they’re not testing everyone. So in the prisons where there’s a real cluster, the numbers are likely far higher. For example, at Elkton, OH which BOP says has 13 inmates infected, 37 prisoners have been hospitalized with symptoms and another 71 are in isolation. At Oakdale, LA — where the first BOP death occurred and one of the hardest hit — BOP claims 40 inmates have tested positive, but at least another 56 have been hospitalized with severe symptoms and 575 are quarantined.

With regards to state and county prisons and jails, however, those counts are often still spottier — and potentially far more urgent given greater overcrowding. UCLA Law has put together a database that tries to track all the known cases (though, as one example of its limits, it only shows New York’s case statewide).

Nowhere is the spread of COVID in prison more concerning than in urban jails. NY City’s Rikers, which as of Wednesday had over 700 infections. 440 of those are staff, meaning the 287 count for inmates testing positive is surely a significant undercount. Nevertheless, that undercount shows that 6.6 percent of Rikers prisoners have tested positive, a rate seven times higher than New York as a whole. Unfortunately, this all happened at a time when Andrew Cuomo and others were trying to reverse recent measures to decarcerate New York, and Cuomo has lagged some of his Republican counterparts in his efforts to cut prison populations and so limit the spread there. Cook County, IL’s jail has 304 positive detainees and 174 correctional officers who tested positive, similar or slightly higher rates than Rikers. This week a judge ordered the Cook County Sheriff to provide soap and sanitizer to prisoners, test those exhibiting symptoms, and provide PPE to those quarantining because of exposure, but stopped short of ordering the jail to release prisoners.

Thus far, that’s what the emphasis has been: emptying the jails. That’s a welcome approach, as a number people who shouldn’t be in jail or prison (or immigration detention) have been released. It’s not clear that prisons have solved the problem of COVID and efforts to do so often end up being inhumane, leaving sick prisoners in solitary and the general population with far less ability to contact their lawyers, to say nothing of family members, which only adds to the panic and confusion for all involved.

One thing that is unclear is whether COVID has spread through guards to the surrounding population, something that — because so many of our prisons are located in rural areas — might be a vector for COVID to spread to the surrounding communities.

These badly affected prisons, however, are going to have an interesting dynamic between guards and prisoners. In Oakdale, for example, there has already been a clash between guards and prisoners. But in other places, the situation has put guards and prisoners on the same side of legal challenges to push for more releases, something that rarely happens in prisons.

No one is going to solve the problem of how to go back to work at prisons. But if you want to see the kind of societal upheaval that might happen if this effort fails, prisons may be your first measure.

Update: Florida has now tasked inmates to make cloth masks for guards, but not for themselves.

Update: Lansing Correctional Facility, in Kansas, also had a riot believed to be COVID-related last week. There are 16 staff and 12 inmates confirmed to have COVID-19.

Cops

Cops interact less directly with COVID patients and often in less enclosed environments than medical care, nursing home, and prison workers, which may make them a better read of what kind of exposure will happen among those who have to interact with a range of the public, but not necessarily a population particularly exposed.

Nevertheless, COVID had spread broadly among the police departments of the bigger cities with COVID spikes, including New York, Detroit (exacerbated by a pancake breakfast attended by a bunch of cops that was an early transmission vector), and Chicago, and known exposure has led significant numbers of cops and other first responders into quarantine, illness, and death (there are other major metros for which reports of exposure among cops is more dated and in smaller numbers). As CNN described it, the toll at the NYPD rivals (though, because of the lasting after-effects of 9/11, could never be counted in the same way) 9/11:

In a department of about 36,000 sworn officers, 7,096 — or 19.6% of the uniformed workforce — were out sick on Friday, according to data issued by the NYPD. Some 2,314 uniformed members and 453 civilian employees have tested positive for Covid-19, and 19 employees have lost their lives as a result of the virus.

The NYPD suffered an incomprehensible 23 losses on 9/11 (hundreds more died in subsequent years from 9/11-related illnesses). It’s devastating to think that the casualties from Covid-19 may soon eclipse this.

IACP and CDC guidance for first responders currently only recommend using PPE when interacting with known or suspected COVID carriers. And this week, the CDC issued new guidance for critical workers (especially including but not limited to first responders) who’ve been exposed that permits returning to work while wearing a mask rather than a full quarantine.  This effort was explicitly rolled out in an effort to address staff shortages like those in police departments.

That guidance — which relies on temperature checks rather than testing — hints at where the Trump administration intends to go as it pushes people to return to work. Which is to say, its first effort to get people back to work falls far short of the testing regime most experts say we need to control the spread.

Military

The military initially tried — in the name of national security — to prevent the release of any granular data showing where its cases are. But then William Arkin published a map showing where the 3,000 cases (of which 2,031 were uniformed military on Friday) were. That same Friday report showed 13 total deaths.

I’m particularly interested in the clusters at bases in Anchorage and Honolulu in states not otherwise heavily impacted by the virus. It suggests that the military may be a vector to spread to unaffected places.

That is a rate of infection that is higher than the US as a whole (which likely stems, at least in part, to greater access to testing), but with a mortality rate significantly lower than the overall rate.

The new count puts the department’s death rate at 0.4 percent, versus the overall U.S. mortality rate of 3 percent.

[snip]

The military’s infection rate now stands at 971-per-million, compared with the latest Centers for Disease Control and Prevention numbers, which shows 1,307-per-million U.S. residents having contracted coronavirus, or about 0.1 percent of U.S. residents.

Nowhere has the challenge of COVID been more dramatic, however, than on the USS Theodore Roosevelt. As the scandal over Captain Theodore Crozier’s removal and the ouster of Navy Secretary Thomas Modly has continued, the Navy has continued to test the entire crew of around 4,800. With 92% tested yesterday, 550 tested positive, meaning 12% of those tested, tested positive. That’s a lower rate than the Diamond Princess’ 19% positive rate, but of a younger and presumably far healthier population, during a period with a higher level of awareness of the virus, and among a population more likely to maintain the discipline of social distancing.

Keeping sailors on a ship from infecting each other is a daunting task, but the military has more resources to conduct evacuation and to conduct contract tracing than any private employer this side of Amazon. As other ships and bases face the challenge in the wake of the Roosevelt fiasco, it will be a measure of whether even the military can catch the virus and contact trace before other big clusters arise.

If the military can’t do it, your average small business isn’t going to be able to pull it off.

Update: The sailor who had been moved to the ICU has now passed away from COVID-19.

Transit workers

One reason New York has been so badly hit is so many people rely on public transportation. Even NY’s suburbs are among the hardest hit area of the country (with 34,392 cases on Long Island, or 21% of the state’s total), and the outer boroughs, where poverty and continued exposure via “essential” jobs, are hardest impacted by the virus within the city.

That’s why the outbreak on the MTA offers important warnings about the possibility that New York could reopen anytime soon. That’s true not just because of the high levels of infection and death — around 14% of MTA 50,000 employees have either tested positive or are quarantining with symptoms, but also because COVID has led to a shortage of workers which has in turn badly hurt service.

At least 41 transit workers have died, and more than 6,000 more have fallen sick or self-quarantined. Crew shortages have caused over 800 subway delays and forced 40 percent of train trips to be canceled in a single day. On one line the average wait time, usually a few minutes, ballooned to as high as 40 minutes.

[snip]

Still, around 1,500 transit workers have tested positive for the coronavirus, and 5,604 others have self-quarantined because they are showing symptoms of the infection. Absenteeism is up fourfold since the pandemic began, officials say.

If more people were working, this shortag would make it harder for passengers to engage in social distancing themselves (though usage is down 70% for buses and 92% on subways).

While MTA dawdled in imposing protective measures for employees, it now surpasses CDC guidelines, in part by providing masks to all its employees.

Patrick J. Foye, the M.T.A. chairman, who himself tested positive for coronavirus, said the agency initially followed guidance from the World Health Organization and the Centers for Disease Control and Prevention that healthy people did not need to wear face masks.

Mr. Foye said the M.T.A. then decided to go farther than that, before the C.D.C. changed its advice on masks. He said it had already provided 460,000 masks to workers, in addition to thousands of face shields and 2.5 million pairs of gloves.

So long as the stay-at-home order remains in place, this crunch on transit won’t prevent people from working, which if it happens would hit those who can’t afford Uber the hardest. But until NY can find a way to limit the illnesses on transit, there’s no way the city can reopen.

Meatpackers

This week a lot of attention has focused on meatpacking plant. The numbers of people infected aren’t high, on a national level, but they’re shutting down factories that supply a significant percentage of the nation’s meat supply, and often in more rural places that until recently believed they were immune to the virus.

A Tyson-owned meat processing plant that churns out 2% of the US pork supply ground to a halt this week as workers became infected with Covid-19.

And that wasn’t the only meatpacking plant impacted by the spread of the novel coronavirus. JBS USA on March 31 said it hit pause on much of its work at a beef facility in Souderton, Pennsylvania and wouldn’t have it back online until mid-April. National Beef Packing on April 2 temporarily stopped slaughtering cattle at one of its plants in Tama, Iowa after a worker tested positive for the virus.

Perhaps the most notable of those cases is in South Dakota, where a Smithfield pork processing plant first closed for three days, after 80 employees had tested positive, and then today closed indefinitely after that count grew to 293, 8% of the plant’s workers (it’s unclear whether all the worker at the plant have been tested). The cluster is also significant given that those cases make up 40% of the cases in South Dakota, which has not imposed a stay-at-home order. As such, it’s an example of a workplace that, by not managing an outbreak, can significantly impact a community that may have assumed it was immune.

Guidance released by an industry organization dated April 3 noted that the industry wasn’t getting PPE because shortages mean what is available needs to be saved for medical workers, which suggests that even for an industry that recognizes the need (some of these companies also operate in China), they’re not able to provide masks for their workers because the shortage for medical workers hasn’t been solved.

Update: On April 8, the UFCW called for CDC to issue mandatory guidelines that would cover both the union’s grocery store and its food processing workers. It includes employer-provided PPE for the workers.

Businesses and services have had from two weeks to months to try to prepare their workplaces for this crisis — and for none of them has there been any doubt about their essential status. But they’re still not doing some of the basic things that experts say we’ll need more generally to reopen the economy. These workplaces — the ones for which there is some kind of real count — are facing up to 12 to 19% COVID positive rates, even in professions with a strong culture of hygiene (though none of these professions, not even medical workers, can get the testing to confirm those rates). The resulting staffing shortages are causing service shortfalls even beyond the hospital staffs we’ve been working to flatten the curve to accommodate. And for many of these communities, those numbers reflect weeks of stay-at-home orders that limit the sources of new infections.

Trump wants to reopen the economy. But it’s clear from the limited data and anecdotal reporting from essential workplaces that basic things — starting with masks — still aren’t in place to limit workplace exposure.

And again, because these men and women haven’t had the protective equipment or other workplace protections they need, many have needlessly died.


Trump Fighting for Floating Petri Dishes but Not Life-Saving Ventilators

Trump’s response to learning that the cruise industry — which is almost entirely flagged overseas, in part to avoid US taxes — would not be eligible to tap the $500 billion slush fund for large businesses was to work to find a “legislative fix” so these floating petri dishes could survive a pandemic exacerbated by their industry.

Sr. admin official says bipartisan Senate grp working to ensure they can access one of the facilities–or else will seek a legislative fix in the next package.

He proposed adopting Josh Hawley’s offer, which is that if they registered here they could qualify for this loan package.

Meanwhile, on the same day Trump went out of his way to think creatively about how to fund an industry that has almost no societal value that isn’t already being addressed with extended unemployment benefits, outlets reported that the Trump Administration was balking on a plan — which both Trump and Mike Pence had already celebrated — to back a joint venture between General Motors and ventilator manufacturer Ventec Life Systems to produce up to 80,000 ventilators in Kokomo, IN. The problem: $1 billion was too much to spend to address the acute shortage of ventilators in the country.

The decision to cancel the announcement, government officials say, came after the Federal Emergency Management Agency said it needed more time to assess whether the estimated cost was prohibitive. That price tag was more than $1 billion, with several hundred million dollars to be paid upfront to General Motors to retool a car parts plant in Kokomo, Ind., where the ventilators would be made with Ventec’s technology.

By the end of the day, both Trump and Dr. Deborah Birx questioned the number of ventilators New York Governor Andrew Cuomo has consistently said his state will need.

“I have a feeling that a lot of the numbers that are being said in some areas are just bigger than they’re going to be,” he said. “I don’t believe you need 40,000 or 30,000 ventilators. You go into major hospitals sometimes, and they’ll have two ventilators. And now all of a sudden they’re saying, ‘Can we order 30,000 ventilators?’”

New York has become the new epicenter of the coronavirus outbreak in the United States, with hospitals struggling to keep up with larger patient numbers and limited supplies, including masks, gowns and ventilators. In severe cases of Covid-19, the illness caused by coronavirus, ventilators can allow patients to breathe with incapacitated lungs — a common outcome of the disease.

Dr. Deborah Birx, the White House coronavirus response coordinator, said earlier on Thursday she was told that New York had enough ventilators to meet current needs. While there may be shortages in urban areas like New York City, Birx said, there are other parts of the state “that have lots of ventilators and other parts of New York state that don‘t have any infections right now.“

“There is still significant — over a thousand or two thousand ventilators that have not been utilized yet,” Birx said. “Please, for the reassurance of people around the world, to wake up this morning and look at people talking about creating DNR situations — do not resuscitate situations for patients — there is no situation in the United States right now that warrants that kind of discussion.“

Trump’s interest in thinking creatively to fund the cruise industry as compared with his stinginess regarding crucial medical needs is not just malpractice during a pandemic.

But it doesn’t even serve his own stated priorities.

Trump has said he wants the economy to resume as soon as possible — he has been pushing for an Easter restart. Both WA (where Ventec is headquartered), MI, and IN are under state-wide stay-at-home orders, permitting only essential workers in the state to leave their homes to go to work. With some exceptions, the stay-at-home orders in the Midwest have shut down much of the auto industry.

Redeploying a parts plant in IN to produce ventilators would be a way to shift a facility and its workers from the non-essential category to the essential category, potentially getting them working before the stay-at-home orders are lifted.

Indeed, pushing manufacturers to shift production to items deemed essential, via whatever means (in this case, the venture would be supported only by a purchase agreement, but the Defense Production Act could be used to do even more of this). And even if Cuomo is overestimating how many ventilators he’ll need (there’s no reason to believe he is), if there’s a surge in COVID cases in the southern hemisphere as it shifts into fall, there’ll be plenty demand worldwide to pick up the slack.

Even if it led to a glut, one of the best employment policies right now would be to shift as much short- to medium-term production from goods deemed non-essential to goods deemed essential. Even if the US government overpays for those products, it’d be a better jobs program than restarting the cruise industry.

Trump continues to fool himself about where capitalism ends and state support begins. But he’s also adopting a policy that undermines his own hopes to get as many people back to work as he can.


Three Things: Boeing Boing

[NB: The byline – check it. /~Rayne]

That U.S. flights of Boeing’s model 737 Max aircraft were suspended is a good thing, I think we can agree though perhaps not all for the same reasons. I’ve had suspicions about Boeing for some time now and not because of the company’s products or its management. Three things have bothered me and the deadly crash on March 10 has only added to previous concerns.

~ 3 ~

I’ve noted before that Boeing has been a possible target for stock manipulation; in fact I wrote about my suspicions a year ago:

You can imagine my surprise on December 6, 2016, when then-president-elect tweeted about Boeing’s contract for the next Air Force One, complaining it was too expensive. Was it Boeing the spies were discussing? But the company didn’t fit what I could see in the indictment, though Boeing’s business is exposed to Russia, in terms of competition and in terms of components (titanium, in particular).

It didn’t help that Trump tweeted before the stock market opened and Boeing’s stock plummeted after the opening bell. There was plenty of time for dark pool operators to go in and take positions between Trump’s tweet and the market’s open. What an incredible bonanza for those who might be on their toes — or who knew in advance this was going to happen. …

And while Boeing 737 Max equipment safety was under public debate after Sunday March 10th crash, Trump tweeted this Luddite position on contemporary aircraft complexity on March 12:

How interesting that he avoided naming Boeing specifically, but at the same time he managed to post the first of these two tweets at exactly 10:00 a.m.; the second tweet didn’t publish for another 12 minutes, leaving those following his tweets closely to assume he was going to discuss Boeing specifically during the interim.

I can’t help think Trump has an ulterior motive with regard to Boeing considering how often he has stepped into their business one way or another since December 6, 2016.

It’d be nice to know who’s been shorting NYSE:BA before his tweets and in which stock exchanges.


[Graphic: NYSE:BA moving average and trading volume from midday Monday 11-MAR-2019 to midday Tuesday 12-MAR-2019 via Barron’s.]

~ 2 ~

Trump’s personal demands have also affected Boeing directly with regard to system updates. The government shutdown delayed for five weeks work by the Federal Aviation Administration toward certification of a software “fix” for the 737 Max flight control system.

In other words, eight more American citzens traveling on the doomed flight this past weekend may have paid the ultimate price for Trump’s gross incompetence and corruption, not to mention the other truly marvelous human beings lost to the world when that flight met the earth two weeks ago.

Boeing’s business model needs to be revisited, though, if the flight control system “fix” wasn’t treated with adequate urgency based on feedback from Boeing to the FAA. There’s a fundamental question of a product’s safety for its intended purpose if it must have a software update to fly safely but that update is an additional feature outside the product’s purchase agreement and must bought before it can be added. Smells like product liability with a whiff of extortion.

Would we tolerate this business model in other situations where so much is at stake? Imagine your computer’s operating system needs a patch before you can use it — and you must pay for the patch, it’s not included in the licensing agreement for the operating system. Oh, and the computer runs your insulin pump or your pacemaker wihout which you are likely to die.

~ 1 ~

The FAA as well as Boeing need to be reevaluated based on complaints the government agency is too closely linked to the aerospace company to provide appropriate oversight. The FAA has been relying on Boeing to self-monitor via component safety inspections because the FAA doesn’t have adequate personnel or resources.

Recall recent reports of supply chain vulnerabilities — is it at all possible Boeing components have been as compromised as other military suppliers have been? How would the public know if it has relied on the FAA’s self-inspection “designee program”?

This sounds eerily familiar, like the claims related to firmware updates needed on servers when it was possible the Supermicro motherboard hardware had been compromised.

~ 0 ~

Treat this as a open thread. We could use a break from what will continue to be a flood of news relate to the Special Counsel’s Office report, especially after the Golfer-in-Chief parks his cart for the weekend and begins shit posting on Twitter in earnest again.


Day 34: Frankly, We Have a Lot Right Now

Still shaking my head over Trump’s interview with Tucker Carlson. While asked about evidence supporting Trump’s claim that President Obama wiretapped him, Trump said, “Frankly, we have a lot right now.”

Bring it, buddy. And with less bullshit because frankly, we have a lot right now.

While you’re at it, bring your tax returns as evidence you’re not violating the Emoluments Clause or in bed with Russia.

Reminder: you’ve got 34 days until we expect to see a 2016 income tax return.

Non-Tax Return Stuff:

UK’s PM Theresa May denies Indy Ref 2.0 before Brexit — When you need a break from American leadership stupidity, just take a look at May. Here’s an unforced error of hubris and hypocrisy; telling the Scots they can’t have a vote to leave the UK after the UK had a vote to leave the EU is just asking for the Scots to hold a referendum on their own. Nicola Sturgeon has already rebutted, calling May’s block “undemocratic.”

Fed Chair Yellen said, “The data have not notably strengthened” after rate hike — Between increases in energy and health costs not offset by decreases in food and apparel costs, the consumer price index rose 2.7% over the last 12 months. Private sector compensation only rose 2.2% over the same period. Consumer spending has been lackluster and businesses are not investing. The post-crash boom is petering out and nothing this administration or Congress is doing will help. A billionaire can only buy so many condos and yachts to keep the economy afloat, and workers can’t buy much on their chicken feed minimum wage at part-time jobs while they have to budget for increasing health care expenses. (I should point out here that the CPI detailed report won’t be produced after June 2017 thanks to Trump’s diktats. How convenient.)

Trump tells Michigan auto workers he’s fighting for their jobs — Sure he is. This guy is fricking clueless about manufacturing (ex: Carrier in Indiana) including the automotive industry. Detroit’s cheese is being eaten by entirely new entrants who don’t worry about emissions standards and whose mileage concerns are of an entirely different nature. After decades of Detroit’s inadequate R&D sunk into battery-powered vehicles combined with vacillating leadership on the future of fossil-fueled combustion engines, Michigan’s auto industry is now battling for market share with companies like Tesla, while Tesla is already seeing new competition emerge like Lucid Motors. Tesla and Lucid are both located in the U.S. Meanwhile, Trump’s budget plans revealed today are a shiv in Michigan’s back; why live and work here if the lakes aren’t clean, schools are underfunded, mass transit is suppressed?

Dispatcher punished in Tamir Rice case — What a bunch of crap. The officer who had the ultimate final and mortal power in Tamir Rice’s case — shooting Rice in seconds after arrival at the playground — should have been criminally prosecuted. Meanwhile, a dispatcher who never saw the victim or the scene of the shooting was suspended.

I feel awful now, after reading so much about Trump and writing about that last piece. Treat this like an open thread though I can’t look in again until I do something positive to get the Trumpish off me.


The Future of Work Part 4: The Kinds Of Jobs That Are At Risk

Recent improvements in hardware, a massive increase in the number of processors available, and new math tools have increased concerns that computers may soon replace millions of workers. The shorthand for this is Artificial Intelligence, although the term seems like hyperbole considering the kinds of things computers can do at present. The Obama White House issued a paper on this issue, Artificial Intelligence, Automation and the Economy, which can be found here. It cites two studies of the impact of AI on automation over then next 10 years or so. One, by the OECD, estimates about 9% of US jobs may be lost to automation. The other is a more interesting 2013 paper by two professors at Oxford, Carl Benedikt Frey and Michael A. Osborne, estimating that as many as 49% of US jobs could be lost or seriously affected over 10 or so years.

The Frey-Osborne Paper is here. Frey is a professor in a public policy college, and Osborne is in the engineering college; they aren’t economists. Perhaps for that reason, the introductory sections are instructive on the history of technological change and some of its effects on society. The technical approach of the Frey-Osborne Paper is to identify the bottlenecks that make it difficult to automate the tasks needed in a specific job. They use machine learning to identify patterns in the skills needed by specific jobs.

The authors identify three main bottlenecks to automation:

1. Tasks requiring perception and manipulation. P. 24
2. Tasks requiring creative intelligence. P. 25
3. Tasks requiring social intelligence. P. 26

The O-NET database of jobs is managed by the US Department of Labor. The current version contains detailed descriptions of job tasks for 903 occupations. Here are the top eight tasks of 21 listed for forest firefighter, one of the bright future jobs according to O-NET,:

Rescue fire victims, and administer emergency medical aid.

Establish water supplies, connect hoses, and direct water onto fires.

Patrol burned areas after fires to locate and eliminate hot spots that may restart fires.

Inform and educate the public about fire prevention.

Participate in physical training to maintain high levels of physical fitness.

Orient self in relation to fire, using compass and map, and collect supplies and equipment dropped by parachute.

Fell trees, cut and clear brush, and dig trenches to create firelines, using axes, chainsaws or shovels.

Maintain knowledge of current firefighting practices by participating in drills and by attending seminars, conventions, and conferences.

Frey and Osborne describe their methodology as follows:

First, together with a group of [machine learning] researchers, we subjectively hand-labelled 70 occupations, assigning 1 if automatable, and 0 if not. For our subjective assessments, we draw upon a workshop held at the Oxford University Engineering Sciences Department, examining the automatability of a wide range of tasks. Our label assignments were based on eyeballing the O-NET tasks and job description of each occupation.

They identified nine variables related to the three bottlenecks and assigned levels of difficulty of the variables in carrying out each task, high, medium, or low. Then they verified their data, and used it as training data in a machine learning program. The paper gives a description of the way they prepared and ran the rest of the O-NET data through the trained machine to estimate the likelihood that each job would be automated over the next 10 years or so. They produced a chart showing the likely effects of AI on categories of jobs. The following chart shows the results of their work.

The authors say that large numbers of transportation and logistics workers, office workers and administrative support workers are at risk. They also think many service workers are at risk as robots become more efficient. They think people whose jobs require great manual dexterity and perception, or high levels of creativity, or strong social intelligence are reasonably safe in the near term. They assert that low-skill workers will have to move to jobs in the service sector that require these skills, and will have to sharpen their own through training and education.

There have been several articles on this issue lately. This one by Reuters says that investors think the future is in automation. Since the election shares in companies working in that area are up dramatically as is an ETF in the sector. Reuters says that this means that investors think that Trump’s assertion he will increase jobs in the manufacturing sector will not happen. Instead, as the cost of advanced technology drops labor becomes expendable. Any increase in manufacturing will have little effect on overall unemployment, as displaced workers move to other jobs with the same employers doing “value-added” tasks.

Matthew Yglesias goes a step farther in this 2015 post at Vox. He says the big problem in job growth in the US is the lack of increase in productivity due to inadequate automation. He thinks rising productivity is essential to higher wages, or more likely a reduction in the time spent working. Yglesias lays out the case for not worrying. He ignores, as all economists do, the possibility that the returns from work might be shared more equitably between capital and labor. His relentless optimism contrasts with the lived experience of millions of Americans, the real lives that gave us Trumpism.

I wonder what Yglesias makes of this article in the Guardian discussing the efforts of the billionaire Ray Dalio to create software to manage the day-to-day operations of the world’s largest hedge fund in accordance with “… a set of principles laid out by Dalio about the company vision.” The article provides a more pessimistic view of the future even for management work.

I don’t have an opinion about these forecasts or the reasoning behind them. Yglesias says people will work less, but doesn’t explain how workers who have no bargaining power will be able to increase their income enough to have free time. Dalio must think that he is so wise that his AI automaton will replicate his success forever, and that his competitors won’t take advantage of the rigidity of his principles.

Suppose that the investors described by Reuters are right, that manufacturing increases but without increased employment in the sector. What will all those Trump voters do next? Change their minds about what they want from the economy and the government that fosters it, and live happily ever after?

I think both Yglesias and Dalio are so steeped in neoliberal economics with its model of human beings as Homo Economicus that they assume these changes will come about smoothly. Nothing else will change; there are no dynamic tipping points. No large number of human beings will raise hell. There will be no feedback effects. The displaced of all ages will just retrain to some other job and/or resign themselves to their reduced lives. They won’t resist, or riot, or insist on government protection, or demand a completely new system. Investment bankers will blandly accept the judgment of computers as to their value and will not insist on being treated like superstars even if the machine says they are just gas giants.

Yglesias and Dalio are wrong. That is precisely what history says won’t happen.


Did NYT’s Mandarin Translations Cause Trouble for Apple?

In what was seen as capitulation to Chinese censorship and its own outsourcing interests, yesterday Apple announced it was removing the NYT app from its app store in China, in response to vague “local regulations.”

“For some time now the New York Times app has not been permitted to display content to most users in China and we have been informed that the app is in violation of local regulations,” Fred Sainz, an Apple spokesman, said of the Times apps. “As a result, the app must be taken down off the China App Store. When this situation changes, the App Store will once again offer the New York Times app for download in China.”

Deep in its story on the move, NYT tied the moment China first told Apple to remove the app — December 23 — to a story it would later publish on the subsidies Apple gets in association with the Foxconn iPhone factory in Zhengzhou and to a blog post on “a seven-and-a-half-minute phantasmagoria of the Communist Party’s nightmares of Western subversion.”

In the weeks leading up to the withdrawal of the Times apps, The Times was working on various articles related to the Chinese government. One of them, posted online on Dec. 29, revealed the billions of dollars in hidden perks and subsidies that the Chinese government provides to the world’s biggest iPhone factory. China is also one of Apple’s largest iPhone markets, though sales in that region have slowed.

On Dec. 23, David Barboza, a Times reporter, spoke with members of Apple’s media team about the article. Mr. Barboza had previously been in touch with the iPhone factory owner, Foxconn. He had also contacted the Chinese government as part of his reporting.

Later that day, a separate team from Apple informed The Times that the apps would be removed, Ms. Murphy said.

In another article, published on Dec. 22 as a post on its Sinosphere blog, The Times described an anti-Western internet video that had been widely promoted by Chinese public security offices.

Both of those stories were translated into Mandarin.

Indeed, the more substantive of the two stories — on the Foxconn subsidies — linked to a series of other NYT articles, a number of which were also translated into Mandarin:

Unsurprisingly, the article describing the move was also translated.

I’ve been tracking NYT’s practice of translating select stories into Mandarin since 2015, when a story on what seemed to be retaliation for the OPM hack got translated into Mandarin. While the choice of which stories get translated can seem somewhat arbitrary (which is part of why I’m interested), many of the stories — especially the post on the video, which covers the equivalent of the anti-Russian fever we’re engaging in here — seem focused on highlighting Chinese corruption or counter-propaganda/counter-intelligence efforts.

More recently, I noted that the NYT story on the DNC hack (which was very favorable to the DNC) got translated into Russian.

As the NYT story notes, Apple apps for other major US outlets have not been taken down. But the NYT one has.

As we discuss Apple’s capitulation — and it is that — I want to renew my focus on NYT’s decision-making process on what to translate to make more accessible to the citizens of other countries.


Wednesday: Tick-Tock Stock

In this post: A short film depicts a failed/successful love story found in electronic debris and the tick-tock behind yesterday’s stock market’s scramble.

Short film for this week by Victoria Mapplebeck examines personal technology detritus. Some of us have been through many generations of electronic devices used for communications, in which highly intimate details may be found. In Mapplebeck’s case, a failed love story followed by a lifelong relationship are bounded by text messages. What’s in your digital scrap heap? What would pixels you’ve left behind tell about you? Will you decode them as Mapplebeck has, or will they be decrypted by others in this life or after you’ve left it? Food for thought.

Tick-tock stock
Something doesn’t sit right about the brief tanking of Boeing’s stock yesterday, besides the absurdity of a president-elect rage-tweeting about the company just before the stock market opened. Let’s take a look at how events unfolded.

FRI 02-DEC-2016 12:00-14:00 CST — Aircraft manufacturer Boeing CEO Dennis Muilenburg gave a keynote speech to Illinois Manufacturers Association’s annual luncheon in Chicago. He advocated the incoming Trump administration to keep and reopen the Export-Import Bank (Ex-Im Bank) as it has aided U.S. manufacturers like Boeing to do more business overseas when other forms of financing are unavailable.

FRI 02-DEC-2016 17:58 EST — Bloomberg published a report on Muilenburg’s keynote, with an unspecified update at 19:29 EST.

SAT 03-DEC-2016

SUN 04-DEC-2016

MON 05-DEC-2016 15:24 EST — Washington Post reported, As Trump vows to stop flow of jobs overseas, U.S. plans to make fighter jets in India

TUE 06-DEC-2016 6:40 EST — According to a summary, Fox & Friends cited the Washington Post report that Boeing is building F-16 and F-18 jets in India instead of in the U.S.

TUE 06-DEC-2016 8:30 EST — Chicago Tribune published a story on Muilenburg’s remarks on Trump’s trade policies. The piece does not mention Ex-Im Bank or alternate financing to encourage trade but focuses more closely on Trump’s approach to China and free trade agreements.

TUE 06-DEC-2016 8:52 EST — Trump tweeted, “Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!”, apparently misunderstanding the costs in the contract and the nature of the aircraft specifications, which must include the ability withstand certain military threats, unlike any aircraft Trump has purchased for himself or his businesses.

TUE 06-DEC-2016 — 10 seconds later, the market began to sell off of Boeing stock. (In comparison, average human response time required for braking while driving is +3 seconds)

TUE 06-DEC-2016 9:30 EST — New York Stock Exchange opened and the sell-off continued (Note that 9:30 EST = 14:30 London (LSE) = 15:30 Frankfurt (FWB) = 17:30 Moscow (RTS) and all these markets were also open at the same time.)

TUE 06-DEC-2016 ~15:30 EST — A CNBC report asked if algorithms traded on Trump’s tweet.

TUE 06-DEC-2016 12:50 EST — The Atlantic’s David Frum tweeted, asking if “we are to accept [Trump’s] unverified word that he sold all his stocks in June?” Frum linked to The Hill’s report, Boeing Responds to Trump: Air Force One deal is for $170 Million, not $4 Billon.

TUE 06-DEC-2016 18:45 EST — Senator Ron Wyden replied, “[email protected] @RealDonaldTrump: I look forward to seeing proof of these stock sales as required by law: https://www2.oge.gov/Web/278eGuide.nsf/Content/Chapter~OGE+Form+278e“, referring to U.S. Office of Government Ethics’ OGE Form 278e.

The timeline spawns questions:

What’s in Trump’s current investment portfolio besides real estate? It’s alleged Trump sold his stocks in June this year, but there is no evidence to that effect. (Timing of such sales is also interesting based on the outcome of the Brexit referendum and Trump’s relationship with pro-Brexit Ukip front man Nigel Farage, but that’s another story.) Will Trump comply with U.S. law and inform the government of his investments? Or will he be as opaque and difficult as he has been so far about his tax returns?

Trump has been in trouble with the Federal Trade Commission and the Securities and Exchange Commission before, paying $750,000 in fines back in 1988 without admitting “any violation of the law” after he had purchased large quantities of casino company stock in 1986 without proper notice under the Hart-Scott-Rodino Act. The transactions then had been masked as “put-call option agreements.” Is it possible Trump or someone close to him has done the same with Boeing stock, avoiding high-frequency trading but operating within a tight time frame?

When exactly did Trump hear about Muilenburg’s comments; are we to believe he didn’t see the Bloomberg report and relied on the Chicago tribune piece as some suggest? Or instead was he riled up by Fox & Friends’ second-hand report, or by the original Washington Post article on Monday afternoon? It seems odd that two to three entire days went by after Muilenburg’s keynote without reaction until Tuesday morning.

Was Trump’s real problem with Boeing the creation of jobs in the U.S., continuing the craptastic narrative behind the Carrier Corporation jobs story last week? Was the rage-tweet Tuesday morning about a perceived attack on Trump’s China policy? Or was it really about Trump’s position on Ex-Im Bank, masked by the three-plus day delay in response and two other news pegs (Fox & Friends and Chicago Tribune)?

 If Trump’s real problem with Boeing is Muilenburg’s protective stance on Ex-Im Bank which Trump wants to eliminate, why is Trump so adamant that the U.S. can’t provide alternative financing to encourage purchasing of U.S. goods and services? Why would he refer to Ex-Im Bank as “featherbedding”?

If Trump has a problem with Muilenburg’s position on trade policy, why is Boeing’s former CEO Jim McInerney meeting with Trump during the first week of the administration as part of the “kitchen cabinet”? Especially since McInerney derided Trump’s trade policies earlier this year?

The timing and tone of Trump’s tweet just don’t make sense given the complexity of Boeing’s situation. How are we supposed to believe his rage-tweet was only about the (misunderstood) cost of the next Air Force One aircraft — the guy who’s going to cost us more than a billion dollars during his term for Secret Service at Trump Towers in NYC?

Especially since Boeing is a client renting office space from a Trump building in Turkey.

Especially since Boeing’s contract to build fighter jets in India maintains a relationship with a potential partner against the spread of radical Islamic fundamentalism.

Especially since Boeing’s relationship with Chinese companies aided by Ex-Im Bank financing creates jobs here in the U.S. (though at a possible loss to Russian competitor United Aircraft Corporation).

Longread: Iceland’s Birgitta Jónsdóttir on reforming democracy
This piece was written nearly two years ago by Jónsdóttir who had been elected an MP in 2013 and co-founded the country’s Pirate Party in 2012. Her concerns then about of the rise of totalitarianism, fascism, and populism, appear prescient now. Worth the time to read what Iceland was doing to address these threats as we may need to do the same here in a hurry. Bonus: she’s a reminder of what WikiLeaks once was for comparison against the organization we see today.

À demain, mes copains!


Our Industrial Policy Is the F-35

screen-shot-2016-12-01-at-10-14-03-am

Lockheed photo.

With the news of Donald Trump’s deal to keep 1,100 of 2,100 Carrier jobs in Indiana, coastal elites appear to have just discovered tax-supported Midwestern manufacturing jobs, even as they continue to ignore tax-supported defense contractor (manufacturing) jobs.

As best as I can understand it from the details released so far, the deal may be best understood as a mix of typical state-level efforts combined with the leverage of a federal level effort. Over 25% of the jobs saved will be engineer and headquarter jobs — important for retaining technological capacity in the US, but not a big help to blue collar workers.

The package is reportedly substantially similar to one IN Governor and soon to be Vice President Mike Pence already offered.

UTC agreed to retain approximately 800 manufacturing jobs at the Indiana plant that had been slated to move to Mexico, as well as another 300 engineering and headquarters jobs. In return, the company will get roughly $700,000 a year for a period of years in state tax incentives.

Some 1,300 jobs will still go to Mexico, which includes 600 Carrier employees, plus 700 workers from UTEC Controls in Huntington, Ind.

That has commentators on all sides — from economists to Bernie Sanders — complaining that Trump just made it more likely companies will demand bribes to retain US based jobs in the future.

That’s of course a fantasy. Companies already demand bribes to keep jobs in particular states (or in the US generally).* This is just a typical deal — indeed, it was a typical failed deal until the guy making it became Vice President-elect thanks in part to his new boss’ running on making a better deal.

The way companies arbitrage states and countries to get the best deal to preserve jobs is not a good thing — at all. But it’s one that must be solved at a systematic level, a point Jared Bernstein made in the WaPo.

This sort of production cannot be sustained as some sort of non-competitive museum model, where we push back on trade-induced job losses through tax breaks and government contracts. True, governors and mayors commonly dole out such goodies as bribes to factories to settle in one state vs. another, but that’s a zero-sum game, and often ends up as a big waste of precious resources. Meanwhile, it’s also a game of corporate whack-a-mole. While Trump et al. were brokering this deal, nearby factories were packing up for Mexico.

As I recently wrote, we’ve generally failed to even try to implement a solution to this problem of global competition eroding our manufacturing base. A systemic approach, as opposed to what Trump is up to here, will require reducing our trade deficit in manufactured goods by pushing back against countries that manage their currencies to make our exports expensive and their exports cheap. It will require investments in advanced manufacturing so we can close the wage gap with productivity. It will require systemic state and older city economic development of the type economist Tim Bartik describes here and here. It may require direct job creation to employ displaced workers when none of the above comes through.

The key twist on this story, however, is that Carrier was convinced to deal when Trump started threatening that federal contracts with Carrier’s parent company, United Technologies, might be at risk if they didn’t.

John Mutz, a former Indiana lieutenant governor who sits on the [Indiana Economic Development Corporation’s] 12-member board, told POLITICO that Carrier turned down a previous offer from IEDC before the election. He said he thinks the choice is driven by concerns from Carrier’s parent company, United Technologies, that it could lose a portion of its roughly $6.7 billion in federal contracts.

“This deal is no different than other deals that we put together at the IEDC to retain jobs, but the fact is that the difference is that United Technologies depends on the federal government for lots of business,” Mutz said.

Kevin Drum — while citing a lot of health care and finance jobs (both heavily supported by federal policy) as the true job leaders in Indianapolis — considers the pressure on United Technologies to be an outrage.

This would be a massive abuse of power, of course, but who wants to take a chance that Trump cares? Probably not UT.

I actually think the deal ought to elicit a more interesting discussion of industrial policy — the kind of systematic intervention that Bernstein talks about that might actually do something about the hollowing out of America’s manufacturing base.

Such a discussion has long been forbidden in American political discourse, in part because the same economists pretending such whack-a-mole bribes haven’t become the norm in American political life also pretend that an unfettered “free” market (always defined to include mobile capital and goods, but not labor) will benefit everyone.

Yet even during the period when any discussion of industrial policy has been forbidden, we’ve had one.

Our industrial policy consists of massive US investments in manufacturing war and intelligence toys that we then sell to foreign governments. When done with Middle Eastern petro-states like Saudi Arabia, that trade goes a long way to equalize our foreign trade deficit, but it contributes directly to instability that then requires us to intervene and build more war toys. That investment in war leads, in turn, to a disinvestment in publicly funded infrastructure that could also provide jobs in the heartland.

The most obvious symbol of our unacknowledged industrial policy is the F-35, a trillion dollar federal investment for a plane that has yet to meet basic requirements, one beset by years of rework. As it happens, one of many causes of problems with the F-35 is big reliability problems with engines used in the plane. That makes those faulty engines, made by United Technologies subsidiary Pratt & Whitney, just another direct taxpayer investment in UTC jobs. Yet reliability problems didn’t prevent P&W from getting another contract for the F-35 engine earlier this year. Nor did P & W’s provision of attack helicopter technology to the Chinese via a Canadian subsidiary.

Our current industrial policy, you see, feeds so few prime contractors that they are virtually immune from the competition that might pressure them to deliver quality goods. Which leads, in turn, to rework, contract overruns, and contractors walking out of the building with our government’s most closely guarded secrets, all with no consequences.

Let’s stop pretending (as this piece does) that America’s manufacturing, increasingly dominated by the production of war toys, exists in a a real market, shall we?

Once we do that, we might begin to address the diseases of our defense contracting and — more importantly — rediscover the value of investing in other kinds of manufacturing that our country needs to have. Justify these investments by some future defense need, I don’t give a damn (though there are military officials who will soberly explain the risks of the hollowing out of our manufacturing base). But invest in the technologies the US needs to stay competitive and retain a manufacturing base.

There was a brief moment when Obama tried to do this by investing in battery factories in MI and other Rust Belt states, an investment justified because the US lagged so far behind South Korea on this critical technology. The investments were badly executed, and then later undermined by the KORUS trade deal. Republicans made them toxic with the Solyndra faux scandal. And so, rather than siting one after another killer app in locales whose older economies had failed, such efforts largely ended.

Imagine how the climate change negotiations might have changed, though, if they came with key investments in alternative energies in coal mining areas of West Virginia and Kentucky?

But this Carrier deal — no matter how much of a gimmick — should be an opportunity to shift the discussion. Trump (and Pence) just federalized the kind of deal every state makes out of desperation, pitting states against each other and Mexico and China. If they can do that, in part by leveraging federal contracting, then they can also pursue an honest industrial policy, one not dependent on selling war toys to our belligerent authoritarian friends overseas.

I doubt Trump will do that. But his Carrier deal ought to at least invite a debate about it.

Update: Added a link to the deferred prosecution for when Pratt & Whitney dodged export restrictions to provide technology to China.

Update: The other day Bloomberg did a review of the Department of Energy’s Loan Program Office, which funded Solyndra (but which, as was covered at the time, actually dates to W’s Administration) actually has been very successful.

Not only has the program’s loan portfolio generated about $1.65 billion in interest payments to date, its mission to support major energy projects fits into Trump’s goal of stimulating investment in the U.S., said Jonathan Silver, a former head of the loan programs office.

“The President-elect was talking directly about significant investments in infrastructure,” Silver said in an interview Monday at Bloomberg headquarters in New York. The program is intended to support not just clean-energy projects, but also industries Trump championed during the campaign, including coal, among other advanced fossil fuels. “This is infrastructure. It doesn’t get any more infrastructure-ish than this.”

The office dates to the George W. Bush administration and was designed to offer loan guarantees to innovative energy projects that struggle to get financing from commercial and investment banks. In some cases it also approved loans funded through the Federal Financing Bank.

It supported the first big solar farms in the country and helped commercialize solar-thermal systems, advanced nuclear designs, molten-salt storage and other technologies. It has yet to finance an advanced fossil-fuel project.


*Disclosure: My spouse works for a manufacturing company often touted, locally and nationally, as a huge success; it receives state tax credits.


Hillary Is Now Picking and Choosing Which Obama Accomplishments to Take Credit For

According to Hillary Clinton’s latest campaign ploy, she deserves credit for domestic policies passed under Obama — notably, ObamaCare — but not issues — in this case, trade deals — she negotiated as Secretary of State.

She rolled out former Governor and erstwhile Michigan resident Jennifer Granholm (when this story hit, some local folks were talking about how Granholm hasn’t been seen in these parts of late) to claim that Hillary can’t be held responsible for NAFTA — which she supported when it got passed by her spouse (who is, of course, a key campaign surrogate) — or for the Trans-Pacific Partnership — which she helped negotiate as Secretary of State. It’s the latter I find particularly remarkable.

“It’s not really fair to ascribe NAFTA to her when it was her husband’s administration,” Granholm said in an interview with The Detroit News. “And, of course, it’s not really fair to ascribe TPP to her when it was her boss’s administration. She can’t go against somebody who she worked for.”

As a U.S. senator from New York, Clinton voted against the Central American Free Trade Agreement (CAFTA) forged by Republican President George W. Bush’s administration.

“I think people have to be fair about looking at how she acted when she was on her own,” said Granholm, who is supporting Clinton’s candidacy.

Sanders has been talking about trade policy in speeches in Michigan this week. His campaign is planning a large rally a 7:30 p.m. Saturday night at Macomb Community College’s southern campus in Warren. Clinton and her husband were stumping for votes Saturday in Detroit.

On Thursday, Sanders highlighted trade policy at a press confernece in Lansing, previewing a potential topic of disagreement in Sunday night’s debate with Clinton at the University of Michigan-Flint.

“On the issue of trade, Secretary Clinton’s views and mine are very different,” Sanders said. “She has supported NAFTA, I opposed it. She supported permanent normal trade relations with China, I vigorously opposed the (permanent trade) with China. She supported permanent normal trade relations with Vietnam, I opposed that.”

“She supported the Colombia Free Trade Agreement. I opposed that. And she supported the Korean Free Trade Agreement. I opposed that.”

It’s unclear from Detroit News’ reporting whether Granholm includes the Colombian and Korean free trade deals in her absolution of Hillary’s responsibility or not. But as David Sirota has shown, Hillary’s own emails show some really damning details about her claims and enthusiasm for the former (which makes sense, because she is also an enthusiastic booster of Plan Colombia).

During her 2008 presidential run, Clinton said she opposed the deal because “I am very concerned about the history of violence against trade unionists in Colombia.” She later declared, “I oppose the deal. I have spoken out against the deal, I will vote against the deal, and I will do everything I can to urge the Congress to reject the Colombia Free Trade Agreement.”

But newly released emails show that as secretary of state, Clinton was personally lobbying Democratic members of Congress to support the deal, even promising one senior lawmaker that the deal would extend labor protections to Colombian workers that would be as good or better than those enjoyed by many workers in the United States.

One of the 2011 emails from Clinton to U.S. Trade Representative Michael Froman and Clinton aide Robert Hormats has a subject line “Sandy Levin” — a reference to the Democratic congressman who serves on the House Ways and Means Committee, which oversees U.S. trade policy. In the email detailing her call with Levin, she said the Michigan lawmaker “appreciates the changes that have been made, the national security arguments and Santos’s reforms” — the latter presumably a reference to Colombian President Juan Manuel Santos. She concludes the message about the call with Levin by saying, “I told him that at the rate we were going, Columbian [sic] workers were going to end up w the same or better rights than workers in Wisconsin and Indiana and, maybe even, Michigan.”

Note, too, in that email that there is no exemption claimed for the paragraph that follows on the discussion of KORUS, which has been particularly damaging to Michigan’s economy.

Look, last I checked, Hillary cleaned up on Super Tuesday claiming she is running on a continuation of Obama’s policies. While I recognize she mostly means the domestic policies she had a less direct role in, at some point we get to hold her accountable for the things she did in her actual job, which included negotiating trade deals that hurt American workers, especially while she’s claiming she’ll be Obama’s third term. Her role in trade deals — and her likely dishonesty about TPP (see this Larry Summers piece that assumes if Trump wins, TPP will be dismantled, which suggests he expects it to be fully implemented if Hillary wins) is part of who she is. Yes, she voted against a trade deal once. Yes, she also had an affirmative role in a lot more trade deals. That’s a shitty record to run on in MI (and it will be a shitty record that Trump will hammer her on mercilessly if they end up being the nominees), but it is her record, part of the extensive experience that she points to as making her best qualified to be President.

 

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