Sorry for the absence since my last piece on December 20th. I caught Covid in the early part of the Omicron wave, throwing my work schedule off balance. I am back to normal scheduled writing as of this piece. Thank you as always to my subscribers.
Since we are now in the third year of the Coronavirus Pandemic (yes, that is still happening!), I wanted to begin the year by assessing where we are, and how our current moment fits into the broader social problems we are facing.
One way of doing that is simply interrogating the name of this newsletter — Notes on the Crises. As you may have seen in other venues, from social media to reporting, this title frequently trips people up. Almost invariably people say “crisis” instead of “crises”. In fact, when I created this newsletter I knew this title would be misread. Yet, I decided to stick with “crises” anyway. I did that for the simple reason that this is not the only crisis we will encounter over the next several decades.
In fact, leading into the pandemic I had spent most of the past year working on a report on alternative credit policy tools to interest rate policy. I’d especially focused on the Green New Deal as a major example of a policy framework that should incorporate contractionary credit policy tools, over interest rate increases. That report, after significant pandemic disruptions, will be out early next month (launched in this very newsletter!) With Climate Change occupying my mind, it was clear to me at the time that Notes on the Crises needed a name that could accommodate an eventual transition to writing about environmental turmoil and its surrounding policy challenges.
The pandemic also serves as a microcosm for what Climate Change policy will look like. (See Adam Tooze’s reflection on the broken metaphor of ‘China’s Chernobyl’ in our last podcast.) Our failures to respond to problems preemptively will soon mean greater damage, death and destruction. In fact, they already do. Meanwhile, our belated response in order to try to gain control of large scale complex phenomena will involve controversial emergency shutdowns, to quickly shutdown spread — in one case viral transmission, and the other carbon emissions. The climate example is even bleaker because shutdowns will not have a direct —or even significant —relationship to contemporary overwhelmed emergency responses in the same way that shutdowns relieve pressure on healthcare systems.
But we can’t give the coming crisis of climate change our full attention just yet: the Coronavius is (sadly) not over yet. Today the pandemic remains the driving force of what is going on nationally and globally. This simple truth may be difficult to accept, because the contrary is so often stated. At multiple times last year the Biden administration attempted to declare the pandemic over. When they declared that Coronavirus is becoming a “pandemic of the unvaccinated”, that was another iteration of trying to put the pandemic “behind us”. Many mainstream news outlets have implied that Covid is either under control, or soon will be. Stubbornly, the pandemic has not listened.
This campaign of denialism has now reached the point that we have pushed the healthcare system far over capacity, and the Biden administration has still shown no interest in any mitigation efforts that are not simply vaccination. Even vaccination itself has not involved the outreach work that, say, the census involves i.e. door knocking and opening physical offices across the country where you can talk to an informed representative about your questions and concerns. In fairness to the Biden administration, the mere suggestion of door knocking by president Biden was met with outrage by the governor of Missouri. However, trying nothing because trying things will encounter strong political resistance when this many lives are on the line is not leadership and there is no reason those of us on the sidelines should accept that kind of reasoning.
And make no mistake, many lives are on the line. Far from coming to a close in the short term, Covid is an on-going and worsening crisis too many are hoping to wish away. According to the New York Times, the 7 day death average in the United States is about 2500 deaths a day. That is a truly staggering amount. That is not far off from the peak of deaths in the winter of 2020-2021. The number of people hospitalized with Covid has started to trend down but is still a staggering 146,000 people. The peak in winter 2020-2021 was 136,000 people. Partial vaccination and a complete lack of mitigation measures do not end pandemics even though vaccination provides strong protection to individuals. Denying this doesn’t make Covid disappear, nor does it make the social ramifications of Coronavirus disappear.
In this context I have had trouble joining the month to month coverage of the Federal Reserve’s actions, and the discussion of where we are at relative to “full employment”. In my view a great many commentators are mistaking circumstances where service workers are responding to workplaces which have become dramatically more unsafe and unpleasant, for a “strong” labor market where workers have true bargaining power. It is true that employers have had to raise wage rates to have even a minimal chance to attract workers — but they have budged on working conditions far less. This is in part because working conditions are more of a matter of collective standards and it is very hard to get agreement on protections which are not widely accepted across workplaces. The controversy over “school closings” reflects this. Pundits rhetorically inveigh against closing schools when community (and school) transmission spikes by pointing to the lack of protections (or closures) at bars and restaurants.
A highly unionized profession with higher standards for workplace safety has extreme difficulty defending itself when there exists a low wage workforce where working conditions can collapse without social response. As a result, teacher unions have largely made concessions on worker conditions and earlier agreements to tie whether school would be “remote” or not to community transmission rates. Ironically, this has simply meant school closures anyway as the Omicron surge caused staff shortages that made in-person school impossible.
Whether you agree with my view of the “school closure” debate, the point is that aggregate wage and employment rate measures about the health of “the economy” for ordinary workers are much more misleading in the midst of a pandemic where we lack similarly high quality working conditions measures. This is, in part, because working conditions are a qualitative factor rather than something measured in dollars or hours worked. It is also simply because we have not invested sufficient resources into producing measures of the quality of workplaces. Those wage gains for lower waged workers still matter of course. They also likely will not reverse when the pandemic is over. But they are a barometer of how bad conditions are, not a conventionally “improving” labor market.
Zooming out even more, we can note that the pandemic is still going on globally. The global vaccination effort has been minimally resourced, at best. There have been, for example, no issuance of SDRs by the IMF or large grants from the United States. Instead, the U.S. is planning on raising interest rates which is already tightening dollar financial conditions (and thus exchange rates) for countries that are already overstretched in their pandemic response. This is also another sense where the term “crises” applies. Coronavirus is not simply one “crisis”, but many interlocking ones. It is hard to even keep track of all the different “Coronavirus crises”. Ending all of these Coronavirus crises will take far more concerted and global effort than is being made and the desire (especially among U.S. elites) to wish it all away only extends them further. Of course, the same applies to climate change as well. Hence Notes on the Crises not “Notes on the Crisis”.