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It’s Not Stimulus, If There’s Nothing to Stimulate

By Red Jahncke on Apr. 16, 2020

It’s Not Stimulus, If There’s Nothing to Stimulate

We should Re-Open The Economy The Same Way We Shut it Down: Here, There and, Then, Everywhere -- And Soon.

The Hill, April 16, 2020... It is not “stimulus” if there’s nothing to stimulate. With almost all states having ordered citizens to stay home and most businesses to shutter, the coronavirus “stimulus” bill passed by Congress and signed by President Trump on March 27 is really a “bridge” bill -- a bridge to an uncertain future time when people can go back to work and businesses can reopen.

If the shutdown goes too long, some workers and businesses may not survive or be able to revive. If it goes too long, the $2.2 trillion may be exhausted in the “bridge” phase, leaving nothing for an actual stimulus phase. A prolonged shutdown based upon an “abundance of caution” may carry instead an overload of danger.

The president has reiterated a very general hope to restart the economy on May 1 and,, on Wednesday, he said some states may be able to open earlier. Other states have leapfrogged beyond that, however, and adopted much longer shutdown periods; Virginia, for example, has a shutdown order through June 10. That may make sense for some areas, most obviously the immediate New York City area; in others, particularly rural areas, it probably does not.

We should remember that the objective of the extraordinary stay-home measures was to “flatten the curve” of infection, not to eliminate it. Once the spread of the virus has been slowed to keep it within hospital and medical capacity, that goal will have been achieved and extreme measures should be lifted. In his daily briefings, Gov. Andrew Cuomo (D-N.Y.) has said the curve of infection appears to be flattening in the New York City metropolitan area, the acknowledged epicenter of the crisis.

As we approach the time to reopen the country, the larger question is how we should restart our economic engines. We should reopen the same way we shut down -- namely, here and there based on conditions on the ground but in reverse sequence, starting where conditions are the best. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, and U.S. Surgeon General Jerome Adams have said as much in White House briefings.

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Time for CT State Employees to Give Back

By Red Jahncke on Apr. 7, 2020

Time for CT State Employees to Give Back

Republican American, CT Examiner, Journal Inquirer - April 4-6 ... For the second time in roughly a decade, over 100,000 private sector workers in Connecticut have lost their jobs, while not a single state employee has been laid off in either instance. For almost the entire decade, state workers have enjoyed contractual no-layoff guarantees, presently extending to 2021.

Not only that, following the Great Recession, state workers got three 3 percent annual pay raises, and, now, they are to get a 3.5% wage hike in just three months – on the heels of a 3.5% pay raise last July 1^st.

That’s unfair, almost cruelly so, in face of the unfolding economic ravages of COVID-19.

Union leaders talk about “sacrifices” by state workers. That's shameless disinformation.

Governor Lamont should place a call immediately to Daniel Livingston, the chief negotiator for the State Employee bargaining Alliance Coalition (SEBAC) representing unionized state workers, and demand that workers forgo the July 1^st pay raise and that retired state workers give up cost of living increases for the next decade at least.

The issue of fairness and social justice does not involve only the element of shared sacrifice in times of hardship. For
almost two decades, Connecticut state employees have enjoyed amongst the highest pay and benefits among state workers nationwide.

Balancing Virus Response With Its Economic And General Health Consequences

By Red Jahncke on Mar. 22, 2020

Balancing Virus Response With Its Economic And General Health Consequences

Connecticut is Not New York City, Where Strict Shutdown Policies Are Needed. CT Governor Lamont Should Issue and Follow Evidence-Based Connecticut-Specific Guidelines For Continuing His Schools and Business Shutdown and, Ultimately, For Lifting It.

CT Examiner, Republican American, CT Hearst newspapers - March 22 -26 ... The coronavirus is not the only threat we face. As I wrote in The Hill on last Thursday (3/19) and The Wall Street Journal editorialized last Friday, the 20th,, we may face a far greater threat from a collapsed economy, which would devastate everyone’s financial resources and their medical condition.

This should be of special concern in Connecticut which entered the current crisis already economically anemic and financially shaky.

While this may not be popular to say, we should rethink shutdown policies in Connecticut. Actually, it may not be unpopular. A new Pew Research
Center poll shows that 70 percent of Americans see the virus as a major threat to the economy, while only 27 percent see it as a major threat to their own personal health.

It should be a priority to keep people working and return to work the tens of thousands suddenly being idled. The Connecticut Labor Department received 56,000 unemployment claims in the first four days this past week versus a weekly average of 2,500.

A deep recession or depression would bring an inevitable deterioration in public health along with economic pain. It would push us backward down the Preston Curve, which demonstrates that life expectancy varies directly with income level: wealthy societies are relatively healthy, poor ones less so.

We should balance the “incidence curve” with the Preston Curve, putting as much effort into moderating economic devastation as we put into flattening the incidence, or infection, curve to keep coronavirus hospitalizations below hospital capacity.

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The Double-Barreled Coronavirus Threat: Death by Virus or by Ensuing Economic Disaster

By Red Jahncke on Mar. 19, 2020

The Double-Barreled Coronavirus Threat: Death by Virus or by Ensuing Economic Disaster

The Hill, Thursday, March 19, 11:30amThe ultimate infection and mortality rate from the coronavirus (COVID-19) is unknowable at least for weeks, but the economic fallout is not. We appear headed into serious recession, if not depression. Bad economic times also affect public health and, ultimately, we might see more deaths from a deep economic decline than from coronavirus.

On Monday, China released its economic data for January and February, when COVID-19 erupted and the country went into lockdown. The data were much worse than analysts forecast: China’s factories slumped 13.5 percent, retail sales fell 20.5 percent and home sales plummeted 34.7 percent. This, in an economy that has experienced 9.4 percent average annual growth over four decades of uninterrupted year-over-year quarterly growth.

On Wednesday, Deutsche Bank forecast a full first-quarter Chinese GDP decline of 32 percent annualized. The bank predicted a second-quarter drop of 24 percent in Europe and 13 percent in the U.S. from first-quarter levels – a decline the Wall Street Journal said “would be the biggest in recorded history.” That is why the stock market has plunged more than 30 percent and U.S. Treasury interest rates have fallen to near-zero levels. (To avoid any confusion, Wall Street is an indicator; this is not to say it is in need of a bailout.)

In the face of such drastic economic damage and associated public health deterioration, we should consider how soon and why certain of the recently adopted shutdown measures might be lifted to prevent economic Armageddon.

The general construct and rationale for our extreme measures is to spread out over time the incidence of coronavirus infections, to keep it below hospital capacity. If illness spikes above capacity, there is no treatment available for many of the afflicted, and the mortality rate spikes as the untreated die. This construct has become known as “flattening the curve,” keeping the rising curve of coronavirus cases below a straight line representing medical capacity.

Why not increase that capacity? Most of the policy discussion seems to assume that hospital capacity is relatively fixed, but China built two hospitals in Wuhan in two weeks; New York Gov. Andrew Cuomo has called on the Army Corps of Engineers to build new hospitals here. The sooner and the more we increase capacity, the sooner we may be able to ease some of the extraordinary measures and mitigate the coming economic recession.

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Bloomberg: Will The Candidate Measure Up To The Campaign Architect?

By Red Jahncke on Feb. 21, 2020

Bloomberg: Will The Candidate Measure Up To The Campaign Architect?

In the Democratic presidential debate Wednesday in Las Vegas, Michael Bloomberg the candidate badly underperformed Michael Bloomberg the brilliant campaign architect.

Architect will insulate candidate this time, preserving the hopes of many center-right Democrats that he can prevail over front runner Sen. Bernie Sanders (I-Vt.), an ardent socialist whom they consider unelectable.

Before the debate, Bloomberg the campaign
architect had maneuvered Bloomberg the candidate into third place in the RealClearPolitics average of national polls. Most likely, former Vice President Joe Biden’s epic collapse will soon leave Bloomberg in second place behind Sanders, setting up the showdown that is the predicate of Bloomberg’s candidacy.

Not being on the ballot guaranteed Bloomberg’s survival post-Iowa and post-New Hampshire, and it insulates him from paying the normal price, in Nevada and South Carolina, for his dismal debate performance in Las Vegas.

There’s no such safety net for the other candidates, who failed to carry out their necessary debate mission — namely, to slow a surging Sanders. Instead, they attacked Bloomberg and each other in a badly moderated food fight. For former Vice President Joe Biden and Sen. Elizabeth Warren (D-Mass.), this was a missed opportunity to revive themselves following disastrous finishes in Iowa and New Hampshire.

So, unless pre-publication polling is totally wrong, Sanders will win resoundingly Saturday in Nevada’s caucuses. A big Sanders victory means yet another defeat, and perhaps a fatal one, for each of the other candidates. That includes Pete Buttigieg, former mayor of South Bend, Ind., for whom it would create a serious loss of momentum going into South Carolina where his lack of black support is sure to be fatal.

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Bloomberg’s Rise Surprises Pundits — Has It Surprised Trump?

By Red Jahncke on Feb. 18, 2020

Bloomberg’s Rise Surprises Pundits — Has It Surprised Trump?

When Michael Bloomberg entered the presidential race last November, he was scorned almost universally. Now, many Democrats hope desperately that he will be their savior, the only candidate who can prevail over Bernie Sanders, an ardent socialist they
consider unelectable.

After fourth and fifth place finishes in Iowa and New Hampshire, Joe Biden is toast, as is Elizabeth Warren, following her distant third and fourth place finishes.

Mayor Mike has rocketed into third place in the Real Clear Politics average of national polls, soon to pass plummeting Biden into second behind Sanders. This will set up a titanic civil war between Sandernistas and center-right Democrats.

None of this would have seemed remotely possible listening to political pundits last November. They dismissed Bloomberg’s bid, with several trite “truisms” about political tradecraft. First, money can’t buy the presidency. Second, his late entry would be fatal. Third, by skipping the first four contests, he would fall hopelessly behind. Fourth, his policy stands are all over the map, so he has no natural following or base.

First, his $50 to $66 billion (estimates vary) provide him a tremendous advantage, a massive war chest with which to beat Sanders now and Donald Trump in November.

Last November, few pundits stopped to think that, maybe, there was an obvious and compelling rationale for skipping the first four contests.

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Truck Tolls Won’t Work; New SEBAC Savings Should Fund Transportation

By Red Jahncke on Feb. 5, 2020

Truck Tolls Won’t Work; New SEBAC Savings Should Fund Transportation

On Friday, January 31st, the Transportation Committee of the CT General Assembly held a public hearing on Governor Lamont's new 12-gantry heavy-trucks-only tolls proposal. Red Jahncke testified, along with many other members of the public. Above is the CT Public Affairs Network broadcast of Jahncke's testimony. The full nine hours of testimony can be accessed here: http://ct-n.com/ctnplayer.asp?odID=17098 Below is a transcript of Jahncke's testimony. In a few places, supplementary information has been added in brackets to clarify the testimony.

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Truck-Toll Revenue Would Be a Mirage: Truckers Would Dodge the Gantries

By Red Jahncke on Jan. 28, 2020

Truck-Toll Revenue Would Be a Mirage: Truckers Would Dodge the Gantries

There’s a new game in Connecticut. It’s called dodge-a-gantry. Right now, it is only a virtual game being played on Google Maps.

Governor Lamont's latest toll plan – he’s had many – is to toll only tractor-trailer trucks at just 12 highway bridges in the state. So what are truckers doing? They are getting ready to game Lamont’s proposed system. They are researching the best toll evasion routes, i.e. the best local roads to use to bypass the intended highway gantry locations.

The governor and his advisers have failed to take into account a unique and fundamental obstacle to imposing tolls in Connecticut.

Almost all existing toll roads in other states are limited-access highways. Vehicles travel for several miles between entry-exit access points. To exit and re-enter these highways in order to evade tolls is an onerous proposition. Actually, in most instances, it is impossible, because every entry-exit access point has a gantry or toll booth, where vehicles are logged in and out and charged for the distance they have traveled.

In contrast, Connecticut’s highways are uniquely open-access with short distances between entry-exit points.

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Hartford is exploiting an anomaly in the Medicaid program to extract billions from the U.S. Treasury, not to finance health care, but rather to finance otherwise unaffordable state spending, primarily state employee health care and retirement benefits.

This anomaly, or “shell game” (the term used in a U.S. Senate committee report) operates through the hospital tax. While all states impose this tax, no state imposes nearly as high a hospital tax rate. That’s what former Office of Policy and Management Director Ben Barnes told me in late 2017. He said Connecticut’s hospital tax scheme requires explicit federal approval, because the roughly 9% rate exceeds a 6% threshold that no other state exceeds.

The Medicaid program is a federal-state partnership providing medical care to poor citizens, with the federal government reimbursing states for about one-half to two-thirds of allowable fees and costs that hospitals and others charge Medicaid patients for medical care. Under Obamacare, Connecticut and other states expanded Medicaid in return for much higher federal reimbursement percentages on the patients newly covered.

Apart from this straightforward reimbursement arrangement, states provide hospitals supplemental payments, with the federal government matching the payments, in order to achieve various policy objectives. The hospital tax exploits this supplemental payment mechanism in a manner which the General Accountability Office criticized strongly in a 2014 report.

Let’s start with some fundamental questions. Why is government taxing hospitals, which only serves to raise the cost of the nation’s primary providers of health care. Many are non-profit. Why tax non-profits? Many are for-profit and already pay corporate income taxes. Why levy a second tax? Hospital taxes are truly strange and wonderful.

Just before Christmas, the Connecticut General Assembly went into a special session, to approve unanimously a plan to extend the state’s stratospheric hospital tax for seven years. The plan will generate about $675 million annually, including $375 million in federal matching funds.

The plan requires the approval of the federal Centers for Medicare and Medicaid (CMS), which may not be forthcoming. In mid-2018, a U.S. Senate committee took a look at hospital taxes and issued a report calling hospital taxes “a shell game” and singling out Connecticut as a major perpetrator.

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CT Examiner - CT's Hospital Tax Exploits Medicaid To Finance Irresponsible State Spending, January 12, 2020

Republican American - State's Hospital Tax 'Shell Game' in Peril, January 15, 2020