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Annual data, which go back to 1929, show that the unemployment rate peaked during the Great Depression at an average of 24.9% in 1933.

Goldman Sachs warned Wednesday that the real jobless rate will peak at 35%, up from the bank's previous projection for a peak of 29%.

, told CNN last week that the real jobless rate could hit 25% before "hopefully" falling following a transition period this summer.

Dr. Anthony Fauci, the nation's top infectious disease expert, said Tuesday that the "consequences could be really serious" if states reopen ahead of the guidelines issued by the White House.

Goldman also upgraded its GDP forecasts, predicting a "somewhat more V-shaped path" as states relax lockdown orders. The bank now expects rapid annualized growth of 29% in the third quarter, up from 19% previously.

And Goldman noted several "serious health risks": "insufficient testing and contact tracing" in some states, reopening high-risk sectors and limited evidence of how effective measures like social distancing and will be.

"Prolonged weakness could cause severe scarring effects such as permanent layoffs and business closures that delay the recovery," Goldman Sachs economists wrote.

But now that initial claims have been falling for two months straight, economists are beginning to shift their focus to continuing jobless claims, which count people who are filing multiple weeks in a row. That number stood at 22.8, up slightly from the prior week.

Federal and state outlays totaled just under $102 billion, as of May 12, up from $12.7 billion at the beginning of March.

In April, the federal government paid out nearly $27 billion in unemployment benefits as the money from Congress' historic enhancement to the program started to flow, Treasury Department data shows.

Lawmakers in late March approved a $600 boost to weekly payments for up to four months and added 13 weeks to benefits, both compliments of the federal government

States, meanwhile, delivered just over $21 billion in benefits in April, up from about $4 billion the month before.

As more Americans join and remain on the unemployment insurance program, spending will continue to skyrocket. The outlays to date show that states have struggled to handle the surge in claims and to implement the federal provisions, said Ernie Tedeschi, an economist at Evercore ISI and former Treasury official.

Numerous studies show employment is linked to self-esteem, purpose and identity. It provides relationships, social connections, social status and regular productive activity; a job is an integral part of a person’s identity.

One study found that people with a disability who were employed were less likely to have frequent mental distress, including anxiety and depression, than those with a disability who were not employed (18% vs. 40%). This finding held up even when accounting for demographics and individual characteristics.

The average unemployment benefit is $320 weekly; the amount varies by state. The American Rescue Plan, recently passed to provide economic aid to million of Americans hit hard by the pandemic, adds an additional $300 to unemployment benefits through Sept. 6.

Compare that to the current federal minimum wage: $7.25 an hour. That’s $290 for a 40-hour week, less than what unemployment benefits pay. That means, for millions of Americans, being employed means less income.

Why not increase the minimum wage – at least enough to make it more than unemployment benefits? That way, more people would be motivated to seek jobs.

That said, people who are fit to work should be encouraged to seek, not shun, employment. With unemployment benefits more than the basic minimum wage in many states, we are sending the wrong message to millions. There’s more to a higher minimum wage than just more money. It also means more happiness, better health and a longer life.

Asian workers make up about 9% of New York state's population and work force, but now account for 12.5% of initial claims over the last four weeks. A year ago, they made up just 3.7% of claims during the same time period.

White workers, for example, make up 65% of New York's labor force, but only 51% of recent claims.

The economics community just hasn't spent much time over the past couple of decades focusing on the effect that machine intelligence is likely to have on the labor marke

The Digital Revolution is different because computers can perform cognitive tasks too, and that means machines will eventually be able to run themselves. When that happens, they won't just put individuals out of work temporarily. Entire classes of workers will be out of work permanently. In other words, the Luddites weren't wrong. They were just 200 years too early

Slowly but steadily, labor's share of total national income has gone down, while the share going to capital owners has gone up. The most obvious effect of this is the skyrocketing wealth of the top 1 percent, due mostly to huge increases in capital gains and investment income.

Robotic pets are growing so popular that Sherry Turkle, an MIT professor who studies the way we interact with technology, is uneasy about it: "The idea of some kind of artificial companionship," she says, "is already becoming the new normal."

robots will take over more and more jobs. And guess who will own all these robots? People with money, of course. As this happens, capital will become ever more powerful and labor will become ever more worthless. Those without money—most of us—will live on whatever crumbs the owners of capital allow us.

Economist Paul Krugman recently remarked that our long-standing belief in skills and education as the keys to financial success may well be outdated. In a blog post titled "Rise of the Robots," he reviewed some recent economic data and predicted that we're entering an era where the prime cause of income inequality will be something else entirely: capital vs. labor.

while it's easy to believe that some jobs can never be done by machines—do the elderly really want to be tended by robots?—that may not be true.

Third, as more people compete for fewer jobs, we'd expect to see middle-class incomes flatten in a race to the bottom.

The question we want to answer is simple: If CBTC is already happening—not a lot, but just a little bit—what trends would we expect to see? What are the signs of a computer-driven economy?

if automation were displacing labor, we'd expect to see a steady decline in the share of the population that's employed.

Second, we'd expect to see fewer job openings than in the past.

In the economics literature, the increase in the share of income going to capital owners is known as capital-biased technological change

Fourth, with consumption stagnant, we'd expect to see corporations stockpile more cash and, fearing weaker sales, invest less in new products and new factories

Fifth, as a result of all this, we'd expect to see labor's share of national income decline and capital's share rise.

We're already seeing them, and not just because of the crash of 2008. They started showing up in the statistics more than a decade ago. For a while, though, they were masked by the dot-com and housing bubbles, so when the financial crisis hit, years' worth of decline was compressed into 24 months. The trend lines dropped off the cliff.

Corporate executives should worry too. For a while, everything will seem great for them: Falling labor costs will produce heftier profits and bigger bonuses. But then it will all come crashing down. After all, robots might be able to produce goods and services, but they can't consume them

in another sense, we should be very alarmed. It's one thing to suggest that robots are going to cause mass unemployment starting in 2030 or so. We'd have some time to come to grips with that. But the evidence suggests that—slowly, haltingly—it's happening already, and we're simply not prepared for it.

the first jobs to go will be middle-skill jobs. Despite impressive advances, robots still don't have the dexterity to perform many common kinds of manual labor that are simple for humans—digging ditches, changing bedpans. Nor are they any good at jobs that require a lot of cognitive skill—teaching classes, writing magazine articles

in the middle you have jobs that are both fairly routine and require no manual dexterity. So that may be where the hollowing out starts: with desk jobs in places like accounting or customer support.

In fact, there's even a digital sports writer. It's true that a human being wrote this story—ask my mother if you're not sure—but in a decade or two I might be out of a job too

Doctors should probably be worried as well. Remember Watson, the Jeopardy!-playing computer? It's now being fed millions of pages of medical information so that it can help physicians do a better job of diagnosing diseases. In another decade, there's a good chance that Watson will be able to do this without any human help at all.

Take driverless cars.

The next step might be passenger vehicles on fixed routes, like airport shuttles. Then long-haul trucks. Then buses and taxis. There are 2.5 million workers who drive trucks, buses, and taxis for a living, and there's a good chance that, one by one, all of them will be displaced

There will be no place to go but the unemployment lin

we'll need to let go of some familiar convictions. Left-leaning observers may continue to think that stagnating incomes can be improved with better education and equality of opportunity. Conservatives will continue to insist that people without jobs are lazy bums who shouldn't be coddled. They'll both be wrong.

The modern economy is complex, and most of these trends have multiple causes.

we'll probably have only a few options open to us. The simplest, because it's relatively familiar, is to tax capital at high rates and use the money to support displaced workers. In other words, as The Economist's Ryan Avent puts it, "redistribution, and a lot of it."

would we be happy in a society that offers real work to a dwindling few and bread and circuses for the rest?

Most likely, owners of capital would strongly resist higher taxes, as they always have, while workers would be unhappy with their enforced idleness. Still, the ancient Romans managed to get used to it—with slave labor playing the role of robots—and we might have to, as well.

 economist Noah Smith suggests that we might have to fundamentally change the way we think about how we share economic growth. Right now, he points out, everyone is born with an endowment of labor by virtue of having a body and a brain that can be traded for income. But what to do when that endowment is worth a fraction of what it is today? Smith's suggestion: "Why not also an endowment of capital? What if, when each citizen turns 18, the government bought him or her a diversified portfolio of equity?"

In simple terms, if owners of capital are capturing an increasing fraction of national income, then that capital needs to be shared more widely if we want to maintain a middle-class society.

it's time to start thinking about our automated future in earnest. The history of mass economic displacement isn't encouraging—fascists in the '20s, Nazis in the '30s—and recent high levels of unemployment in Greece and Italy have already produced rioting in the streets and larger followings for right-wing populist parties. And that's after only a few years of misery.

When the robot revolution finally starts to happen, it's going to happen fast, and it's going to turn our world upside down. It's easy to joke about our future robot overlords—R2-D2 or the Terminator?—but the challenge that machine intelligence presents really isn't science fiction anymore. Like Lake Michigan with an inch of water in it, it's happening around us right now even if it's hard to see

A robotic paradise of leisure and contemplation eventually awaits us, but we have a long and dimly lit tunnel to navigate before we get there.

This failing in the West’s economies is also a failing of economics

many people have long felt the desire to do something with their lives besides consuming goods and having leisure. They desire to participate in a community in which they can interact and develop.

Our prevailing political economy is blind to the very concept of inclusion; it does not map out any remedy for the deficiency

injustice of another sort. Workers in decent jobs view the economy as unjust if they or their children have virtually no chance of climbing to a higher rung in the socioeconomic ladder

“Money is like blood. You need it to live but it isn’t the point of life.”4

justice is not everything that people need from their economy. They need an economy that is good as well as just. And for some decades, the Western economies have fallen short of any conception of a “good economy”—an economy offering a “good life,” or a life of “richness,” as some humanists call it

The good life as it is popularly conceived typically involves acquiring mastery in one’s work, thus gaining for oneself better terms—or means to rewards, whether material, like wealth, or nonmaterial—an experience we may call “prospering.”

As humanists and philosophers have conceived it, the good life involves using one’s imagination, exercising one’s creativity, taking fascinating journeys into the unknown, and acting on the world—an experience I call “flourishing.”

prospering and flourishing became prevalent in the nineteenth century when, in Europe and America, economies emerged with the dynamism to generate their own innovation.

What is the mechanism of the slowdown in productivity

prospering

In nineteenth-century Britain and America, and later Germany and France, a culture of exploration, experimentation, and ultimately innovation grew out of the individualism of the Renaissance, the vitalism of the Baroque era, and the expressionism of the Romantic period.

What made innovating so powerful in these economies was that it was not limited to elites. It permeated society from the less advantaged parts of the population on up.

High-enough wages, low-enough unemployment, and wide-enough access to engaging work are necessary for a “good-enough” economy—though far from sufficient. The material possibilities of the economy must be adequate for the nonmaterial possibilities to be widespread—the satisfactions of prospering and of flourishing through adventurous, creative, and even imaginative work.

today’s standard economics. This economics, despite its sophistication in some respects, makes no room for economies in which people are imagining new products and using their creativity to build them. What is most fundamentally “wrong with economics” is that it takes such an economy to be the norm—to be “as good as it gets.”

ince around 1970, or earlier in some cases, most of the continental Western European economies have come to resemble more completely the mechanical model of standard economics. Most companies are highly efficient. Households, apart from the very low-paid or unemployed, have gone on saving

In most of Western Europe, economic dynamism is now at lows not seen, I would judge, since the advent of dynamism in the nineteenth century. Imagining and creating new products has almost disappeared from the continent

The bleak levels of both unemployment and job satisfaction in Europe are testimony to its dreary economies.

a recent survey of household attitudes found that, in “happiness,” the median scores in Spain (54), France (51), Italy (48), and Greece (37) are all below those in the upper half of the nations labeled “emerging”—Mexico (79), Venezuela (74), Brazil (73), Argentina (66), Vietnam (64), Colombia (64), China (59), Indonesia (58), Chile (58), and Malaysia (56)

The US economy is not much better. Two economists, Stanley Fischer and Assar Lindbeck, wrote of a “Great Productivity Slowdown,” which they saw as beginning in the late 1960s.11 The slowdown in the growth of capital and labor combined—what is called “total factor productivity”—is star

though the injustices in the West’s economies are egregious, they ought not to be seen as a major cause of the productivity slowdowns and globalization. (For one thing, a slowdown of productivity started in the US in the mid-1960s and the sharp loss of manufacturing jobs to poorer countries occurred much later—from the late 1970s to the early 1990s.) Deeper causes must be at work.

The plausible explanation of the syndrome in America—the productivity slowdown and the decline of job satisfaction, among other things—is a critical loss of indigenous innovation in the established industries like traditional manufacturing and services that was not nearly offset by the innovation that flowered in a few new industries

hat then caused this narrowing of innovation? No single explanation is persuasive. Yet two classes of explanations have the ring of truth. One points to suppression of innovation by vested interests

some professions, such as those in education and medicine, have instituted regulation and licensing to curb experimentation and change, thus dampening innovation

established corporations—their owners and stakeholders—and entire industries, using their lobbyists, have obtained regulations and patents that make it harder for new firms to gain entry into the market and to compete with incumbents.

The second explanation points to a new repression of potential innovators by families and schools. As the corporatist values of control, solidarity, and protection are invoked to prohibit innovation, traditional values of conservatism and materialism are often invoked to inhibit a young person from undertaking an innovation.

ow might Western nations gain—or regain—widespread prospering and flourishing? Taking concrete actions will not help much without fresh thinking: people must first grasp that standard economics is not a guide to flourishing—it is a tool only for efficiency.

Widespread flourishing in a nation requires an economy energized by its own homegrown innovation from the grassroots on up. For such innovation a nation must possess the dynamism to imagine and create the new—economic freedoms are not sufficient. And dynamism needs to be nourished with strong human values.

a reform of education stands out. The problem here is not a perceived mismatch between skills taught and skills in demand

The problem is that young people are not taught to see the economy as a place where participants may imagine new things, where entrepreneurs may want to build them and investors may venture to back some of them. It is essential to educate young people to this image of the economy.

It will also be essential that high schools and colleges expose students to the human values expressed in the masterpieces of Western literature, so that young people will want to seek economies offering imaginative and creative careers. Education systems must put students in touch with the humanities in order to fuel the human desire to conceive the new and perchance to achieve innovations

This reorientation of general education will have to be supported by a similar reorientation of economic education.

That is until the pandemic, when she ended up in the emergency room because she had a bad reaction to a drug prescribed to bring down her elevated blood pressure.

when the hospital gave her the option of going home and monitoring herself, or staying an extra night, she chose to stay. It was the first time she had felt calm in a year.

Primal Scream phone line

explored the emotional and economic pressures on a generation of moms,

hough there is additional federal support to families, more Americans are vaccinated every day and job loss is not quite as dire as it was in the early days of the pandemic, unemployment claims remain higher than they were in previous economic crises

And moms are still not OK.

“Despite the increased labor force participation of mothers, mothers are still having a really hard time,”

Despite their return to the labor force, they are not having much relief at home, and by that I mean, many children are still home-schooling.

She added that the burden of remote school has fallen disproportionately on the shoulders of mothers

Almost every mother I have spoken to during the pandemic, no matter what their financial and family circumstances, has expressed guilt about complaining

Lower-income parents have already been hit harder by unemployment than their higher-income and college-educated counterparts.

Research has shown that in states where children received only remote instruction during the pandemic, mothers’ labor force participation has been lower than in those where children attended school in person.

“Now it’s like 76 percent of moms and 94 percent of dads with college degrees,” he said. This suggests that where families could afford for one parent to step back from work to deal with domestic labor, mothers were bearing the brunt.

While I can list these labor market statistics all day, the emotional impact of Covid-19 is ongoing, devastating and harder to quantify.

“I cry on Tuesdays and Fridays. Sometimes I have an extra bonus day, like on this Monday,”

when she called into the Primal Scream line

Why Tuesdays and Fridays? On Tuesdays, her husband has a lot of meetings, and her day isn’t light either, so even though she is trading off baby care, it’s “really high octane all day.”

It’s a matter of having kept things nominally together all week, and then you have this big letdown,”

She said she has felt “terrified” for two years, after being anxious during her pregnancy as well, because she wanted her daughter so badly.

“I must have buckets of cortisol,”

“More than parental status or gender, education has been most decisive in who has lost jobs during the pandemic,”

But mothers shouldn’t have to slap on a Pollyanna smile.

, there was already a gender gap in caregiving before the pandemic, and moms were more likely than dads to step back from paid work to fill any family needs.

The past year has only exacerbated the difficulties caregivers face in the United States.

We can acknowledge that things could be worse, but at the same time honor the fact that our circumstances are still so far from good.

"I just wanted to make it clear that I will not sit back, nor should anybody sit back and allow these guys to attack the needs of low-income workers, especially at a time when in this particular bill there are $500 billion available to the President for all kinds of corporate welfare and chicanery," he added. "They don't object to that, they worry about people getting a few bucks more."

Fears about joblessness on this scale could jolt markets again. Investors have priced in a recession by now, but may still be processing the size of the hole the coronavirus has blown into the global economy, Jeffrey Kleintop, chief global investment strategist at Charles Schwab, told me.

The Dow Jones Industrial Average is now down 35% from its all-time high in mid-February, erasing all its gains since President Donald Trump's inauguration. Between January 20 and last Thursday, $27 trillion was wiped off global stocks, according to Bank of America.

One risk of this apparently widespread suspicion is that it could become self-fulfilling. If enough people and businesses believe the economy is secretly terrible, they will behave in ways that make it terrible — by curbing their own spending and hiring, for example. 

This distrust of public data is partly, though not entirely, Trump’s fault.

At times Trump has mused that “real” unemployment is as high as 42 percent , a comically hyperbolic figure

Such comments are part of his broader narrative of numerical nihilism, a political strategy of discrediting any statistic or fact that could obstruct his path to the presidency.

as World’s Worst Surrogate Ben Carson said Friday on MSNBC, “Let’s throw the economists out, and let’s use common sense.” Presumably Carson believes that all forms of expertise, including neurosurgical, should be similarly disposed of in favor of “common sense.”

this anti-intellectual, ignore-the-data attitude mostly owes its growth to a careless, conspiracy-theorizing league of (mostly) conservative politicians and pundits.

They elevated themselves by sowing distrust in traditional institutions and sources of authority, from the media to civil servants to scientists. They presented themselves as the sole truth-tellers, system de-riggers and messianic statistics unskewers, while maintaining that everyone else was feeding the public lies.

The problem with elevating yourself by tearing down the existing authoritative institutions is that once you succeed, you’ve established a road map for others to tear you down, too

This is how a democracy crumbles: not with a bang, but with data trutherism.

There was no guarantee that the economy’s downward spiral wouldn’t continue, as frightened businesses and consumers curbed spending and, in the process, increased unemployment. The CEA presents a series of charts comparing the 2008-2009 slump with the Great Depression. In every instance, the 2008-2009 downturn was as bad as — or worse than — the first year of the Great Depression: employment loss, drop in global trade and change in households’ net worth.

The starkest of these was the fall in households’ net worth (people’s assets, such as homes and stock, minus their debts, such as mortgages and credit-card balances). It dropped by $13 trillion, about a fifth, from its high point in 2007 to its trough in 2009. This decline, the CEA notes, “was far larger than the reduction [adjusted for inflation] . . . at the onset of the Great Depression.”

What separates then from now is that, after 18 months or so, spending turned up in 2009 while it continued declining in the 1930s. This difference reflected, at least in part, the aggressive policies adopted to blunt the downturn. The Fed cut short-term interest rates to zero and provided other avenues of cheap credit; the Troubled Asset Relief Program (TARP), enacted in the final months of the Bush administration, poured money into major banks to reassure the public of their solvency.

Still, Obama’s role was crucial. Against opposition, he decided to rescue General Motors and Chrysler. Throwing them onto the tender mercies of the market would have been a huge blow to the industrial Midwest and to national psychology. He also championed a sizable budget “stimulus.” Advertised originally as $787 billion, it was actually $2.6 trillion over four years when the initial program was combined with later proposals and so-called “automatic stabilizers” are included, the CEA says

More generally, Obama projected reason and calm when much of the nation was fearful and frazzled. Of course, he didn’t single-handedly restore confidence, but he made a big contribution

the recovery from the Great Recession is mostly complete. This seems plausible. Since the low point, employment is up 15.6 million jobs. Rising home and stock prices have boosted inflation-adjusted household net worth by 16 percent. Gross domestic product — the economy — is nearly 12 percent higher than before the financial crisis

his impact is underestimated. Suppose we had had a second Great Depression with, say, peak unemployment of 15 percent. Almost all our problems — from poverty to political polarization — would have worsened. Obama’s influence must be considered in this context. When historians do, they may be more impressed.

At M.I.T., however, Keynes never went away. To be sure, stagflation showed that there were limits to what policy can do. But students continued to learn about the imperfections of markets and the role that monetary and fiscal policy can play in boosting a depressed economy.

And the M.I.T. students of the 1970s enlarged on those insights in their later work. Mr. Blanchard, for example, showed how small deviations from perfect rationality can have large economic consequences; Mr. Obstfeld showed that currency markets can sometimes experience self-fulfilling panic.

This open-minded, pragmatic approach was overwhelmingly vindicated after crisis struck in 2008. Chicago-school types warned incessantly that responding to the crisis by printing money and running deficits would lead to 70s-type stagflation, with soaring inflation and interest rates. But M.I.T. types predicted, correctly, that inflation and interest rates would stay low in a depressed economy, and that attempts to slash deficits too soon would deepen the slump.

The truth, although nobody will believe it, is that the economic analysis some of us learned at M.I.T. way back when has worked very, very well for the past seven years.

But has the intellectual success of M.I.T. economics led to comparable policy success? Unfortunately, the answer is no.

True, there have been some important monetary successes. The Fed, led by Mr. Bernanke, ignored right-wing pressure and threats — Rick Perry, as governor of Texas, went so far as to accuse him of treason — and pursued an aggressively expansionary policy that helped limit the damage from the financial crisis. In Europe, Mr. Draghi’s activism has been crucial to calming financial markets, probably saving the euro from collapse. Continue reading the main story 215 Comments

On other fronts, however, the M.I.T. gang’s good advice has been ignored. The I.M.F.’s research department, under Mr. Blanchard’s leadership, has done authoritative work on the effects of fiscal policy, demonstrating beyond any reasonable doubt that slashing spending in a depressed economy is a terrible mistake, and that attempts to reduce high levels of debt via austerity are self-defeating. But European politicians have slashed spending and demanded crippling austerity from debtors anyway.

Meanwhile, in the United States, Republicans have responded to the utter failure of free-market orthodoxy and the remarkably successful predictions of much-hated Keynesians by digging in even deeper, determined to learn nothing from experience.

being right isn’t necessarily enough to change the world. But it’s still better to be right than to be wrong, and M.I.T.-style economics, with its pragmatic openness to evidence, has been very right indeed

The United States and many other nations with relatively low taxes and a smaller social safety net actually have substantially lower rates of employment.

In Denmark, someone who enters the labor force at an average salary loses 86 percent of earnings to a combination of taxes and lost eligibility for welfare benefits; that number is only 37 percent in the United States. Yet the percentage of Danes between the ages of 20 and 59 with a job is 10 percentage points higher than in the United States.

In short, more people may work when countries offer public services that directly make working easier, such as subsidized care for children and the old; generous sick leave policies; and cheap and accessible transportation. If the goal is to get more people working, what’s important about a social welfare plan may be more about what the money is spent on than how much is spent.

There are countless differences between Northern European countries and the rest of the world beyond child care policies and the like. The Scandinavian countries may have cultures that encourage more people to work, especially women.

In Scandinavian countries, working parents have the option of heavily subsidized child care. Leave policies make it easy for parents to take off work to care for a sick child. Heavily subsidized public transportation may make it easier for a person in a low-wage job to get to and from work. And free or inexpensive education may make it easier to get the training to move from the unemployment rolls to a job.

In the United States, the major policies aimed at helping the working poor are devised around tax subsidies that put more cash in people’s pockets so long as they work, most notably through the Earned-income tax credit and Child Tax Credit.

There is a solid correlation, by Mr. Kleven’s calculations, between what countries spend on employment subsidies — like child care, preschool and care for older adults — and what percentage of their working-age population is in the labor force.

Collectively, these policies and subsidies create flexibility such that a person on the fence between taking a job versus staying at home to care for children or parents may be more likely to take a job.

, it could mean that more direct aid to the working poor could help coax Americans into the labor force more effectively than the tax credits that have been a mainstay for compromise between Republicans and Democrats for the last generation.

wages for entry-level work are much higher in the Nordic countries than in the United States, reflecting a higher minimum wage, stronger labor unions and cultural norms that lead to higher pay

The employment subsidies Mr. Kleven cites surely help coax more Scandinavians into the work force, Mr. Greenstein agrees, but shouldn’t be viewed in isolation.

Every country has a mix of taxes, welfare benefits and policies to promote work that reflects its politics and culture. In the large, diverse United States, there is deep skepticism of social welfare programs and direct government spending, along with a greater commitment to keeping taxes low.

A follow-up question posed to the same expert panel asked whether the total benefits of the stimulus bill will end up exceeding the costs. The idea was to take account of all of the consequences, both positive and negative. On this question, there’s greater modesty, but still no raging debate. Of the 37 respondents, 25 agreed that the benefits exceeded the costs, while 10 were uncertain. Only 2 disagreed that the stimulus was worth it.

the best research into the views of economists finds that this consensus is pervasive across a range of issues. Call it the hidden consensus in economics. It’s there, but remains largely out of sight, because in a competitive political system there’s always an incentive for at least some advocates to try to portray any empirical claim as deeply contested.

He shorted oil and, as a proxy for oil, the Canadian dollar. (That is, he bet against both.) Finally, he shorted U.S. equities.

Last October, he listened to an audiobook by the Hardcore History podcaster, Dan Carlin, called “The End Is Always Near.” “So I had pandemics and plagues in my head,” the Australian said. “In December, I started seeing the first articles about this wet-market thing going on in China, and then in early January there was a lot on Twitter about the shit in Wuhan.” He was in Switzerland on a ski holiday with his family, and he bought all the surgical masks and gloves he could find.

The Australian, who spoke on the condition that his name not be used, is a voluble redhead just shy of fifty.

The problem, he said, was that, perhaps more now than ever, Americans lack what he called “social cohesion,” and thus the collective will, to commit to such a path.

perhaps the government should reward each citizen who strictly observed the quarantine with fifty thousand dollars. “The virus would burn out after four weeks,” he said. The U.S. had all the food and water and fuel it would need to survive months, if not years, of total isolation from the world. “If you don’t trade with China, they’re screwed,” he said. “You’d win this war. Let the rest of the world burn.

I’d been eavesdropping for a week on the friend’s WhatsApp conversation with dozens of his acquaintances and colleagues (he called them the Fokkers, for an acronym involving his name), all of them men, most of them expensively educated financial professionals, some of them very rich, a few with connections in high places. The general disposition of the participants, with exceptions, was the opposite of the Australian’s

they expressed the belief, with a conviction that occasionally tipped into stridency or mockery, that the media, the modellers, and the markets were overreacting to the threat of the coronavirus

They mocked Jim Cramer, the host of the market program “Mad Money,” on CNBC, for predicting a great depression and wondering if anyone would ever board an airplane again. Anecdotes, hyperbole: the talking chuckleheads sowing and selling fear.

it’s hard for a coldhearted capitalist to know just how cold the heart must go. Public-health professionals make a cost-benefit calculation, too, with different weightings.

This brutal shock is attacking a body that was already vulnerable. In the event of a global depression, a postmortem might identify COVID-19 as the cause of death, but, as with so many of the virus’s victims, the economy had a preëxisting condition—debt, instead of pulmonary disease.

“It’s as if the virus is almost beside the point,” a trader I know told me. “This was all set up to happen.”

the “smart money,” like the giant asset-management firms Blackstone and the Carlyle Group, was now telling companies to draw down their bank lines, and borrow as much as they could, in case the lenders went out of business or found ways to say no. Sure enough, by March’s end, corporations had reportedly tapped a record two hundred and eight billion dollars from their revolving-credit lines

In a world where we talk, suddenly, of trillions, two hundred billion may not seem like a lot, but it is: in 2007, the subprime-mortgage lender Countrywide Financial, in drawing down “just” $11.5 billion, helped bring the system to its knees.

It is hard to navigate out of the debt trap. Creditors can forgive debtors, but that process, especially at this level, would be almost impossibly laborious and fraught. Meanwhile, defaults flood the market with collateral, be it buildings, stocks, or aircraft. The price of that collateral collapses—haircuts for baldheads—leading to more defaults.

In New York State, where nearly half a million new claims had been filed in two weeks, the unemployment-insurance trust began to teeter toward insolvency. Come summer, there would be no money left to pay unemployment benefits.

As April arrived, businesses, large and small, decided not to pay rent, either because they didn’t have the cash on hand or because, with a recession looming, they wanted to preserve what cash they had. Furloughed or fired employees, meanwhile, faced similar decisions

On March 20th, Goldman Sachs spooked the world, by predicting a twenty-four-per-cent decline in G.D.P. in the second quarter, a falloff in activity that seemed at once both unthinkable and inevitable. Subsequent predictions grew even more disma

The same technology that renders humans useless might also make it feasible to feed and support the unemployable masses through some scheme of universal basic income.

The real problem will then be to keep the masses occupied and content. People must engage in purposeful activities, or they go crazy. So what will the useless class do all day?

One answer might be computer games. Economically redundant people might spend increasing amounts of time within 3D virtual reality worlds, which would provide them with far more excitement and emotional engagement than the “real world” outside.

This, in fact, is a very old solution. For thousands of years, billions of people have found meaning in playing virtual reality games. In the past, we have called these virtual reality games “religions”.

Muslims and Christians go through life trying to gain points in their favorite virtual reality game. If you pray every day, you get points. If you forget to pray, you lose points. If by the end of your life you gain enough points, then after you die you go to the next level of the game (aka heaven).

As religions show us, the virtual reality need not be encased inside an isolated box. Rather, it can be superimposed on the physical reality. In the past this was done with the human imagination and with sacred books, and in the 21st century it can be done with smartphones.

Consumerism too is a virtual reality game. You gain points by acquiring new cars, buying expensive brands and taking vacations abroad, and if you have more points than everybody else, you tell yourself you won the game.

we saw two others kids on the street who were hunting the same Pokémon, and we almost got into a fight with them. It struck me how similar the situation was to the conflict between Jews and Muslims about the holy city of Jerusalem. When you look at the objective reality of Jerusalem, all you see are stones and buildings. There is no holiness anywhere. But when you look through the medium of smartbooks (such as the Bible and the Qur’an), you see holy places and angels everywhere.

In the end, the real action always takes place inside the human brain. Does it matter whether the neurons are stimulated by observing pixels on a computer screen, by looking outside the windows of a Caribbean resort, or by seeing heaven in our mind’s eyes?

Indeed, one particularly interesting section of Israeli society provides a unique laboratory for how to live a contented life in a post-work world. In Israel, a significant percentage of ultra-orthodox Jewish men never work. They spend their entire lives studying holy scriptures and performing religion rituals. They and their families don’t starve to death partly because the wives often work, and partly because the government provides them with generous subsidies. Though they usually live in poverty, government support means that they never lack for the basic necessities of life.

That’s universal basic income in action. Though they are poor and never work, in survey after survey these ultra-orthodox Jewish men report higher levels of life-satisfaction than any other section of Israeli society.

Hence virtual realities are likely to be key to providing meaning to the useless class of the post-work world. Maybe these virtual realities will be generated inside computers. Maybe they will be generated outside computers, in the shape of new religions and ideologies. Maybe it will be a combination of the two. The possibilities are endless

In any case, the end of work will not necessarily mean the end of meaning, because meaning is generated by imagining rather than by working.

People in 2050 will probably be able to play deeper games and to construct more complex virtual worlds than in any previous time in history.

But what about truth? What about reality? Do we really want to live in a world in which billions of people are immersed in fantasies, pursuing make-believe goals and obeying imaginary laws? Well, like it or not, that’s the world we have been living in for thousands of years already.

Applied welfare economics is the fruition of microeconomics.

It is hard to imagine a basic course in microeconomics failing to include numerous cases and examples drawn from all of the fields listed above. This is because microeconomics is so basic. It represents the trunk of the tree from which all the listed subfields have branche

The specialization of production and the institutions of trade, commerce, and markets long antedated the science of economics. Indeed, one can fairly say that from the very outset the science of economics entailed the study of the market forms that arose quite naturally (and without any help from economists) out of human behavior

In microeconomics this is translated into the notion of people maximizing their personal “utility,” or welfare.

At the beginning of the process, those who adopted the new hybrids made handsome profits.

The economics of supply and demand has a sort of moral or normative overtone, at least when it comes to dealing with a wide range of market distortions. In an undistorted market, buyers pay the market price up to the point where they judge further units not to be worth that price, while competitive sellers supply added units as long as they can make money on each increment.

The strength of microeconomics comes from the simplicity of its underlying structure and its close touch with the real world. In a nutshell, microeconomics has to do with supply and demand, and with the way they interact in various markets.

If price controls keep bread (or anything else) artificially cheap, the predictable result is that less will be supplied than is demanded.

Had the government given wheat farmers coupons, each of which permitted the farmer to market one bushel of wheat, wheat marketings could have been cut by the desired amount. Production inefficiencies could be avoided by allowing the farmers to buy and sell coupons among themselves.

monopoly represents the artificial restriction of production by an entity having sufficient “market power” to do so.

Modern monopolies are a bit less transparent, for two reasons. First, even though governments still grant monopolies, they usually grant them to the producers. Second, some monopolies just happen without government creating them, although these are usually short-lived.

A final example of what occurs with official prices that are too high is the phenomenon of “rent seeking,” which occurs when someone enters a business to earn a profit that the government has tried to make unusually high.

If the wage does not adjust downward to equate supply and demand, the rate of urban unemployment will rise until further migration is deterred. Still other examples are in banking and drugs.

Rent seeking also occurs when something of value (like import licenses or radio/TV franchises) is being given away or sold below its true value

The great unifying principles of microeconomics are, ever and always, supply and demand. The normative overtone of microeconomics comes from the fact that competitive supply price represents value as seen by suppliers, and competitive demand price represents value as seen by demanders.

One measure created was the Paycheck Protection Program, or PPP, which gives loans to businesses to keep employees on the payroll.

Economic Injury Disaster Loans, a program designed to provide loans to small businesses and agricultural entities, was also a target for fraud. The department said it has seized $580 million in proceeds so far from fraudulent loan applications.

Unemployment insurance — weekly federal unemployment benefits worth $600 a week — also came on line because of the CARES Act.

Most notable among these scams are the fake cures and treatments for COVID-19. These have run from attempts to sell everything from industrial bleach to colloidal silver as a miracle cure or treatment for the virus.

According to the memo, $626 million in funds had been seized or forfeited due to civil and criminal investigation by the Justice Department involving the Economic Injury Disaster Loans and PPP measures. The subcommittee memo said that amounts to "less than 1% of the nearly $84 billion in potential fraud identified in these programs."