2020年6月30日 星期二

The pandemic depression is on track

Premature opening: It kills people, but it’s bad for the economy too.
Miami Beach, Florida on June 26Chandan Khanna/Agence France-Presse — Getty Images
Author Headshot

By Paul Krugman

Opinion Columnist

The coronavirus led to a plunge in output and employment. This plunge, however, was a feature, not a bug. As I’ve been saying for a while, we deliberately put the economy into the equivalent of a medically induced coma, suppressing activity to give ourselves a chance to get the pandemic under control.

If we had stayed the course, this period of pain could have set the stage for a rapid recovery. But it was obvious early on that mishandling the situation — failing to stay the course on social distancing, failing to use the time to develop enough testing and contact tracing to gradually resume normal life while keeping a lid on new outbreaks — could extend the pain, turning a short, sharp recession into a prolonged depression, a long period of very high unemployment.

Here’s how I described the nightmare scenario more than six weeks ago: “Over the next few weeks, many red states abandon social-distancing policies, while many individuals, taking their cues from Trump and Fox News, begin behaving irresponsibly. This leads, briefly, to some rise in employment.

“But fairly soon it becomes clear that Covid-19 is spiraling out of control. People retreat back into their homes, whatever Trump and Republican governors may say.”

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Well, it’s no longer a nightmare scenario; it’s just reality. The New York area, after a terrible start, has done what most advanced countries have done, and crushed the curve. But Covid-19 is now exploding in the Sun Belt. Arizona is in full-blown crisis. So is Texas, especially big cities like Houston, where hospitalizations have soared. Florida, which has been suppressing data on hospitalizations, is probably similar.

All three states have Republican governors who enthusiastically lifted stay-at-home orders and, in Arizona and Texas, at first even prevented local governments from requiring that people wear masks. Even now, they’re dithering, taking only baby steps toward restoring social distancing as the pandemic rages.

From an economic point of view, however, it may not matter what the governors do: Fear of the coronavirus is likely to stall recovery, and maybe even send these states back into recession, even if there isn’t a new lockdown. Like many economists these days, I’ve been using restaurant reservations from OpenTable as an early warning signal for economic changes. Here’s what smoothed data for the three hot spot states looks like since the beginning of May:

Recovery, stallingOpenTable

In case you’re wondering (which you probably aren’t), I’m using seven-day medians — seven-day to eliminate day-of-the-week effects, medians to avoid blips like Father’s Day. What the data show is a substantial recovery in eating out during May in early June, stalling and perhaps going into reverse in the past couple of weeks.

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This tells you, among other things, how to react to Thursday’s employment report, which is likely to show pretty big job gains. Namely, it will show a dead cat bounce, reflecting the effects of early reopening but not the effects of the surge in infections that followed.

For months, both epidemiologists and economists have been trying to tell policymakers and business types that there was no trade-off between fighting the pandemic and economic growth. That is, if we didn’t get Covid-19 under control, any short-term gains would soon vanish, and we’d find ourselves getting the worst of both worlds — more deaths plus economic stagnation. But that message was ignored, and here we are.

Quick Hits

The level of fear is more important than official rules.

Larry Kudlow continues his impressive record of never being right.

Fox News has kept millions from practicing social distancing.

Trump’s self-defeating resistance to mask wearing.

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Facing the Music

Anything goes —but not this at the moment.YouTube

A bit of joy. Don’t try this until the pandemic is over.

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On Tech: Burrito delivery makes no sense

The economics of delivery apps stinks, and it shows that many of digital habits are unsustainable.

Burrito delivery makes no sense

Miriam Persand

It’s annoying that everything big companies do is shrouded in mystery and obfuscation. I’ll give you some straight talk.

Because the economics of delivering restaurant meals in the United States stinks, and the companies involved are trying to make it stink less — for them.

Even if you never order food from your sofa, the roots of this broken system should make us all worry that many of our digital habits are unsustainable mirages.

For people who use it, food delivery can be handy, or even a lifeline. And it makes financial sense in certain cities or for certain restaurants. It might be a lucrative activity in the future, or if Venus were in the fifth house, or if robots delivered dinner, or if restaurants were replaced by grain bowl factories.

But big picture, right now, in the real world of 2020 America, food delivery isn’t working out for just about everyone involved — including restaurants, delivery couriers and certainly not the app delivery companies. They are almost all losing money. Even now, yes, when many of us are ordering more takeout and delivery.

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For the food delivery companies, the fastest way to fix this rotten system is to stop spending money in pointless ways and to squeeze more dollars from customers like you and me, the restaurants, the delivery couriers and anyone else involved in this chain of operation.

The way to less stinkage — for the delivery companies — is having fewer but bigger companies that have the muscle to charge more for what they do.

I can confidently predict that if and when more food delivery companies combine, they will say they’re doing so to make our gastronomic lives glorious, to generate more business for restaurants and to construct an Eiffel Tower of hot wings you can see from space. (OK, probably not the last one.)

There will be shreds of truth in those lofty ambitions. But mostly, the goal of food delivery companies is to get bigger so they have the power to charge higher prices. Or, the way to make the finances less stinky for food delivery companies is to make it stink more for the rest of us.

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This is where I sigh deeply at all the activities that defy the Darwinian idea of only the fittest surviving. With Uber rides, the global buffet of Netflix, WeWork cubicles and burritos delivered to your door, we have been lured by businesses that can exist in their current form only because they have been artificially propped up with cash. Or prices have been smushed down because the cost of labor has been artificially low.

So maybe it makes sense for food delivery companies to get bigger and charge more. But once you understand that the economics are broken for lots of other kinds of habits that we’ve started to form, you have to ask where this all ends.

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The internet is not a politics-free zone

We know by now that technology, like everything else, is never free from politics nor does it necessarily unite the world.

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I was reminded of that on Monday when India declared a ban on a bunch of apps originating from Chinese companies, including the popular TikTok short video app, as India and China engage in deadly clashes over a border dispute.

Likewise, my colleague Javier C. Hernández has a bizarre tale of how an opera singer who resembles China’s leader, Xi Jinping, keeps getting censored online because the government scrubs the internet of anything that might provide an opportunity to mock top officials.

And Reddit, YouTube, and Twitch all suspended or banned accounts on Monday that they said broke rules against online harassment or bigoted speech. The crackdown, which included the Twitch account belonging to President Trump, mostly affected figures with right-wing political views. That prompted some hand wringing about whether the companies were legitimately enforcing policy or playing politics.

The trouble when real world divisions intrude on digital life is it grows harder for all of us to separate what’s real from what’s political hogwash.

Should Indians or Americans worry about the Chinese government spying on us through TikTok — as some politicians claim — or is that a bogus explanation for a broader feud between governments? There is a legitimate debate about how to treat speech online, but it has become clouded by concerns that political motivations are behind everything.

The more the internet morphs from a gee whiz novelty to a staple of our lives, the more we see that the digital sphere is subject to the same animosities as real life.

Before we go …

  • A different take on delivery apps: In New York’s Chinatown, fissures over restaurant delivery apps and e-commerce are encapsulating a broader debate about identity, my colleagues Nicole Hong and Elaine Chen report. The pandemic, they wrote, exposed a “long-simmering generational divide, between younger people who believe Chinatown must get with the times to survive, and older ones who worry about it becoming a theme park of Instagrammable desserts and $18 Asian-fusion cocktails.”
  • A different take on TikTok: OK, not EVERYTHING has to be about politics. My colleague Lena Wilson has an endearing look at young lesbians congregating on TikTok to find “friends, solidarity and even love.”
  • This might be fun! Amazon’s Prime Video started a feature to let people watch the same program with friends at the same time and gossip in a chat window about the show or movie. After one company made a web browser add-on to let people synchronize what they’re watching on Netflix, some of the U.S. streaming video companies have started to incorporate this feature, too.

Hugs to this

I want to get financial news only from this weird and weirdly informative TikTok account from NPR’s Planet Money. I apologize to all the talented business journalists here at The New York Times.

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