January 22, 2021

Continuing Job Losses Put Spotlight on Economic Relief

Mr. Biden has proposed a $1.9 trillion stimulus package that would include $1,400 in direct payments to individuals, expanded unemployment benefits and money for hard-pressed states and cities.

In written testimony released Thursday as part of her Senate confirmation process, Janet L. Yellen, Mr. Biden’s nominee for Treasury secretary, reiterated the urgency of renewed aid.

“Unemployment remains troublingly high, and millions of families are facing hunger or the risk of eviction,” Ms. Yellen, a former Federal Reserve chair, told a questioner. “Additional relief is needed to strengthen the economy, address our public health challenge and provide relief to communities that have been hardest hit.”

Republicans have already registered resistance to another big spending plan.

“We’re looking at another spending blowout,” Senator Patrick J. Toomey of Pennsylvania said at Ms. Yellen’s confirmation hearing on Tuesday. “The only organizing principle I can understand, it seems, is to spend as much money as possible, seemingly for the sake of spending it.”

Democrats hope to push a coronavirus relief package through Congress in the coming weeks, with House Democrats postponing votes until the beginning of February as committees work to translate Mr. Biden’s coronavirus plan into legislation.

“We’ll be doing our committee work all next week so that we are completely ready to go to the floor when we come back,” the House speaker, Representative Nancy Pelosi of California, said at her weekly news conference on Thursday.

But with Ms. Pelosi yet to send the House’s article of impeachment against former President Donald J. Trump to the Senate, and with Senate leaders at odds over the terms of how to organize an evenly split chamber, it is unclear how quickly legislation can be processed. Democrats are also leaving open the possibility of using a process called budget reconciliation, requiring only a simple majority for approval, to push legislation through the Senate.

Article source: https://www.nytimes.com/2021/01/21/business/economy/unemployment-claims-economy.html

Biden Tells OSHA to Issue New Covid-19 Guidance to Employers

The study found that a majority of the Covid-19 cases linked to meatpacking plants had likely originated in the plants and then spread through surrounding communities.

Despite the problems identified by the study, the Trump administration did not include meatpacking plants in the category of workplaces that OSHA should regularly inspect. Only a small fraction of the roughly $4 million in coronavirus-related penalties that the agency proposed under Mr. Trump targeted the industry. Fines for any given plant were generally below $30,000.

The Labor Department under Mr. Trump said it had assessed the maximum fines allowed under the law. But former OSHA officials have said that the agency can impose bigger fines by citing facilities for multiple violations, which could raise proposed penalties to over $100,000.

Even when it did inspect meatpacking plants and propose fines, OSHA rarely required these employers to place workers six feet apart, the distance recommended by its own guidance.

During a court case involving a plant in Pennsylvania whose workers complained last year that they were in imminent danger because of the risk of infection, OSHA wrote in a letter on Jan. 12 that it was OK with spacing at the plant, even though some workers were spaced less than six feet apart. Separately, union officials at two other plants where OSHA issued citations said workers continued to stand close to one another after the citations.

Debbie Berkowitz, a senior OSHA official during the Obama administration who is now at the National Employment Law Project, a worker advocacy group, said she expected the Biden administration to issue a rule requiring meatpacking facilities to space workers six feet apart and mandating other safety measures, such as providing high-quality masks and improving ventilation and sanitation at their facilities.

“OSHA had been sidelined under Trump,” said Ms. Berkowitz. “This is a signal they’re going to play a significant role in mitigating the spread of Covid-19,” she added, alluding to Mr. Biden’s executive order.

Article source: https://www.nytimes.com/2021/01/21/business/economy/biden-osha-coronavirus.html

Is Rivian the Next Tesla? Investors Bet Big on Electric Truck Maker

Another big trend reshaping the auto industry is autonomous cars. On Tuesday, Cruise, a unit of G.M. that is working in that area, announced it had raised $2 billion from Microsoft, G.M., Honda and other investors. Rivian and Tesla are also working on automated-driving technology.

Rivian is different from Tesla in several respects. Tesla so far has grown by selling sporty sedans, a type of vehicle that is falling out of favor with consumers. Tesla intends to begin making an oddly angular, futuristic pickup, the Cybertruck, this year. But it hasn’t yet put heavy focus on the trucks and S.U.V.s that make up 75 percent of the passenger vehicle market in the United States.

Rivian, on the other hand, is focused on producing “adventure” vehicles that owners can take off road, an approach that means Rivian won’t often compete head to head with Tesla.

“There’s a perception that this is winner take all, and that’s just wrong,” Mr. Scaringe said. “Consumers need to have different brands, different flavors. Our success is not at all mutually exclusive to others’ success.”

Rebecca Puck Stair is the kind of car buyer Rivian hopes to attract. A movie location scout in Albuquerque, she has been interested in buying an electric vehicle for a few years, but needs high ground clearance and four-wheel drive for assignments that take her into the desert.

“That didn’t exist in the market,” she said. “A Tesla doesn’t fit my needs.”

About a year ago, she heard about Rivian for the first time and put a deposit down on an S.U.V. the next day — like Tesla, the company does not plan to sell through dealers. Ms. Stair has seen the Cybertruck, but the design is not for her. “It just screams ‘obnoxious guy truck,’” she said, laughing.

Rivian’s truck and S.U.V., which start at $67,500, look more conventional, as if they could have been designed by Land Rover.

Article source: https://www.nytimes.com/2021/01/19/business/rivian-tesla-electric-cars.html

How Full Employment Became Washington’s Creed

Such a government-aided rebound would come in stark contrast to what happened during the 2007 to 2009 recession. Back then, Congress’s biggest package to counter the fallout of the downturn was the $800 billion American Recovery and Reinvestment Act, passed in 2009. It was exhausted long before the unemployment rate finally dipped below 5 percent, in early 2016.

At the time, concern over the deficit helped to stem more aggressive fiscal policy responses. And concerns about economic overheating pushed the Fed to begin lifting interest rates — albeit very slowly — in late 2015. As the unemployment rate dropped, central bankers worried that wage and price inflation might wait around the corner and were eager to return policy to a more “normal” setting.

But economic thinking has undergone a sea change since then. Fiscal authorities have become more confident running up the public debt at a time of very low interest rates, when it isn’t so costly to do so.

Fed officials are now much more modest about judging whether or not the economy is at “full employment.” In the wake of the 2008 crisis, they thought that joblessness was testing its healthy limits, but unemployment went on to drop sharply without fueling runaway price increases.

In August 2020, Mr. Powell said that he and his colleagues will now focus on “shortfalls” from full employment, rather than “deviations.” Unless inflation is actually picking up or financial risks loom large, they will view falling unemployment as a welcome development and not a risk to be averted.

That means interest rates are likely to remain near zero for years. Top Fed officials have also signaled that they expect to continue buying vast sums of government-backed bonds, about $120 billion per month, for at least months to come.

Fed support could help government spending kick demand into high gear. Households are expected to amass big savings stockpiles as they receive stimulus checks early in 2021, then draw them down as vaccines become widespread and normal economic life resumes. Low rates might make big investments — like houses — more attractive.

Article source: https://www.nytimes.com/2021/01/18/business/economy/full-unemployment-fiscal-policy.html

Is Inflation About to Take Off? That’s the Wrong Question

If, for example, the overall Consumer Price Index rises through May at a rate consistent with 2 percent annual inflation, it will show a 3.2 percent year-over-year rise from the depressed May 2020 level. That would be the highest level since 2011 — but would also be misleading, a result of “base effects” rather than the true longer-term trajectory of prices.

For quite a few individual products and services, those numbers will look even more extreme. The price of home natural gas service is on track to be up 5.4 percent, with airline fares up 16.3 percent, and the price of women’s dresses up a remarkable 17.9 percent — all reflecting the deep discounting retailers were forced to do in the spring of 2020.

Those numbers might amount to inflation in a technical sense, but only because of the conventions around using year-over-year data. Dress prices in that model might look as if they are evidence of price inflation, but they would still be 9 percent below pre-pandemic levels.

These calendar effects don’t matter in any meaningful way, and Fed officials have said as much. (“Inflation may temporarily rise to or above 2 percent on a 12-month basis in a few months when the low March and April price readings fall out of the 12-month calculation,” said Lael Brainard, a Fed governor, this week, “But it will be important to see sustained improvement to meet our inflation goal.”)

The most important thing to remember about the yo-yo effect on prices: Beware of anyone who might seek to use these numbers to create misleading narratives about the level of inflation in the economy.

Suppose you get a vaccine jab and suddenly feel more comfortable going out to eat, or attending a concert, or taking a long-postponed vacation. Like a bear that has been hibernating through the winter, you will be ravenous for the pleasures long denied.

But if most everyone emerges from hibernation at once? There are only so many restaurant reservations, concert tickets and hotel rooms available; their supply is pretty much fixed in the short run. If anything, the supply is likely to be below pre-pandemic levels because of permanent business failures.

Article source: https://www.nytimes.com/2021/01/16/upshot/is-inflation-about-to-take-off-thats-the-wrong-question.html

Is Inflation About to Rise? That’s the Wrong Question

If, for example, the overall Consumer Price Index rises through May at a rate consistent with 2 percent annual inflation, it will show a 3.2 percent year-over-year rise from the depressed May 2020 level. That would be the highest level since 2011 — but would also be misleading, a result of “base effects” rather than the true longer-term trajectory of prices.

For quite a few individual products and services, those numbers will look even more extreme. The price of home natural gas service is on track to be up 5.4 percent, with airline fares up 16.3 percent, and the price of women’s dresses up a remarkable 17.9 percent — all reflecting the deep discounting retailers were forced to do in the spring of 2020.

Those numbers might amount to inflation in a technical sense, but only because of the conventions around using year-over-year data. Dress prices in that model might look as if they are evidence of price inflation, but they would still be 9 percent below pre-pandemic levels.

These calendar effects don’t matter in any meaningful way, and Fed officials have said as much. (“Inflation may temporarily rise to or above 2 percent on a 12-month basis in a few months when the low March and April price readings fall out of the 12-month calculation,” said Lael Brainard, a Fed governor, this week, “But it will be important to see sustained improvement to meet our inflation goal.”)

The most important thing to remember about the yo-yo effect on prices: Beware of anyone who might seek to use these numbers to create misleading narratives about the level of inflation in the economy.

Suppose you get a vaccine jab and suddenly feel more comfortable going out to eat, or attending a concert, or taking a long-postponed vacation. Like a bear that has been hibernating through the winter, you will be ravenous for the pleasures long denied.

But if most everyone emerges from hibernation at once? There are only so many restaurant reservations, concert tickets and hotel rooms available; their supply is pretty much fixed in the short run. If anything, the supply is likely to be below pre-pandemic levels because of permanent business failures.

Article source: https://www.nytimes.com/2021/01/16/upshot/inflation-rise.html

‘We Need to Stabilize’: Big Business Breaks With Republicans

But last week seemed to be a breaking point. Big business could evidently tolerate working with Mr. Trump despite his chauvinism, his flirtations with white nationalism and his claims of impunity, but the president’s apparent willingness to undermine democracy itself appeared to be a step too far.

“This thing was a little different. I mean, we had sedition and insurrection in D.C.,” said Jamie Dimon, the chief executive of JPMorgan Chase. “No C.E.O. I know condones that in any way, shape or form. We shouldn’t have someone, you know, gassing up a mob.”

The fallout has been swift. After the president exhorted his supporters to march on the Capitol, chief executives used their strongest language to date to repudiate Mr. Trump, and some of his longtime allies have walked away. Ken Langone, the billionaire co-founder of Home Depot and an ardent supporter of the president, renounced Mr. Trump, telling CNBC, “I feel betrayed.”

Twitter, Facebook and YouTube have banned or suspended Mr. Trump’s accounts. Amazon, Apple and Google have cut ties with Parler, a messaging app popular among his supporters.

Charles Schwab, the brokerage firm founded by a Republican who supported Mr. Trump, said it would shut down its political action committee altogether. And many companies, along with the U.S. Chamber of Commerce, have sought to punish Mr. Trump’s supporters in Congress by depriving them of crucial funds.

“For those members of Congress that were involved in helping to incite the riot, and support the riot, there’s going to be consequences, no question about it,” said Ed Bastian, chief executive of Delta Air Lines.

Article source: https://www.nytimes.com/2021/01/15/business/republicans-business-trump.html

Biden Outlines $1.9 Trillion Spending Package to Combat Virus and Downturn

“Out of all the peril of this moment, I want you to know I see the promise,” Mr. Biden said. “I’m as optimistic as I’ve ever been.”

The plan was lauded by progressive groups as well as by the nation’s leading business lobby, the U.S. Chamber of Commerce, which was often at odds with the Obama administration over spending and regulations. “We applaud the president-elect’s focus on vaccinations and on economic sectors and families that continue to suffer as the pandemic rages on,” the chamber said in a statement.

Republicans were largely silent on the plan, which includes the type of state and local aid that became a sticking point in last year’s stimulus negotiations. Congress was able to agree on a $900 billion package in December only after such aid was excluded. But Mr. Biden outlined his rationale for including such funding, saying it was vital to avoiding cutbacks and layoffs that would set back the fight against the virus and further damage the economy.

“Millions of people putting their lives at risk are the very people now at risk of losing their jobs: police officers, firefighters, all first responders, nurses, educators,” Mr. Biden said.

Mr. Biden’s “rescue” proposal, which would be financed entirely through increased federal borrowing, flows from the idea that the virus and the recovery are intertwined and that the economy cannot rebound without mass vaccine deployment.

“What the economy needs is a successful rollout of the vaccines, and reduction in the risks of social and economic activity,” said Aaron Sojourner, a labor economist at the University of Minnesota’s Carlson School of Management who served in the White House Council of Economic Advisers under the Obama and Trump administrations. “That will go a long way toward promoting recovery. It won’t go all the way, but it will go a long way.”

Mr. Biden, who has promised to get “100 million Covid vaccine shots into the arms of the American people” by his 100th day in office, said last week that he intended to release nearly all available coronavirus vaccine vials once he takes office, rather than holding some back as the Trump administration had been doing.

Article source: https://www.nytimes.com/2021/01/14/business/economy/biden-economy.html

What’s in Biden’s $1.9 Trillion Stimulus Plan

Research from the Congressional Budget Office in 2019 suggested that raising the wage to $15 nationally could increase pay for tens of millions of workers, though potentially at some cost to jobs — perhaps 1.3 million people who would otherwise work would not be, in part because employers would reduce payroll.

Mr. Biden’s plan would provide $440 billion in help to communities, according to the administration, in addition to the funds for school reopening. The relief plan would entail billions in grants and loan programs for small businesses (how those would work is not entirely clear), and $350 billion in emergency funding for state, local and territorial governments.

State and local governments have had revenues decline less as a whole than once anticipated, but have taken an uneven financial hit from the pandemic. They have significantly reduced payrolls, which is concerning because they employ about 13 percent of America’s workers.

Mr. Biden is asking for $160 billion in funding for a national vaccination program, expanded testing, a public health jobs program and other steps meant to fight the virus, according to the administration’s summary.

The plan would invest $20 billion in a national vaccination program “in partnership with states, localities, tribes and territories,” and would try to ensure that people can receive shots free regardless of immigration status. About $50 billion would go toward improving testing, and $40 billion would be earmarked for shoring up protective gear and supplies, deploying emergency response personnel and improving supply manufacturing.

Mr. Biden would renew paid leave provisions that were not extended as part of the December package, while eliminating exemptions for big and small employers. The plan would allow for 14 weeks of paid sick and family and medical leave for caregivers dealing with closed schools or care centers, while providing for a $1,400 leave benefit for eligible workers.

State and local governments and employers with fewer than 500 employees would be reimbursed for the costs via a refundable tax credit. Emergency leave provisions would last through the end of September.

Article source: https://www.nytimes.com/2021/01/14/business/economy/biden-stimulus-plan.html

Biden’s $1.9 Trillion Stimulus: 8 Key Details of Plan

Research from the Congressional Budget Office in 2019 suggested that raising the wage to $15 nationally could increase pay for tens of millions of workers, though potentially at some cost to jobs — perhaps 1.3 million people who would otherwise work would not be, in part because employers would reduce payroll.

Mr. Biden’s plan would provide $440 billion in help to communities, according to the administration, in addition to the funds for school reopening. The relief plan would entail billions in grants and loan programs for small businesses (how those would work is not entirely clear), and $350 billion in emergency funding for state, local and territorial governments.

State and local governments have had revenues decline less as a whole than once anticipated, but have taken an uneven financial hit from the pandemic. They have significantly reduced payrolls, which is concerning because they employ about 13 percent of America’s workers.

Mr. Biden is asking for $160 billion in funding for a national vaccination program, expanded testing, a public health jobs program and other steps meant to fight the virus, according to the administration’s summary.

The plan would invest $20 billion in a national vaccination program “in partnership with states, localities, tribes and territories,” and would try to ensure that people can receive shots free regardless of immigration status. About $50 billion would go toward improving testing, and $40 billion would be earmarked for shoring up protective gear and supplies, deploying emergency response personnel and improving supply manufacturing.

Mr. Biden would renew paid leave provisions that were not extended as part of the December package, while eliminating exemptions for big and small employers. The plan would allow for 14 weeks of paid sick and family and medical leave for caregivers dealing with closed schools or care centers, while providing for a $1,400 leave benefit for eligible workers.

State and local governments and employers with fewer than 500 employees would be reimbursed for the costs via a refundable tax credit. Emergency leave provisions would last through the end of September.

Article source: https://www.nytimes.com/2021/01/14/business/economy/biden-stimulus-plan.html