STATE RACES, RED TO BLUE | Heidi's Picks

Sunday, November 1—As Election Day (Tuesday) approaches, the Battleground States are getting special attention. See two takes on a Biden or Trump victory in these states.  (More recently: CNN's guess on the likely range in the Electoral College vote and the American Prospect's "Unsanitized" roundup.)

The following summary of key down-ballot state races was sent to me by Heidi Fiske, who asked me to post it on her behalf, as I have done before:

Nothing is more important than winning the Presidency and taking back the Senate.

But those races are attracting huge sums of money. Not so the state races, which both require and attract less money. 

We will realize in January just how important these overlooked races are, because that’s when governors, state AGs, state Secretaries of State, state judges and state legislatures will determine the district lines that will hold for a decade, through 2030, based on this year's foreshortened census. 

The Democratic Legislative Campaign Committee (DLCC), the Democratic body that concerns itself with state races, says that if the 48 state legislative candidates in the links below are elected, they will flip 10 chambers in seven critical states from Red to Blue. Of these seats, 34 are in chambers that will rule on district lines for one-third of all House seats (144 of 435).

• Heidi's Picks incorporates recommendations of the DLCC, Future Now, and some other individuals and groups.
• Arizona, 5 legislative candidates
• Iowa, 4 legislative candidates
• Michigan, 4 legislative candidates
• Minnesota, 2 legislative candidates
• North Carolina, 11 legislative  + Attorney General + Secretary of State + 2 Supreme Court candidates  [NC’s superb governor is not included only because he is well-funded and almost certain to win]
• Pennsylvania, 13 legislative candidates [PA’s outstanding Attorney General is not included only because he is considered sure to win]
• Texas, 9 legislative + 4 Supreme Court

VIRUS VICTIMS | Race, Housing, Occupation

Ibram X. Kendi, in “Why Don’t We Know Who the Coronavirus Victims Are?(The Atlantic, April 1, 2020), provides some basic evidence that African Americans are disproportionately victims of the disease. However, in many states we just don't know. He begs for more attention to including demographic data in death statistics.

Kendi cites data showing that African Americans are 14.6 percent of the Illinois population, but are 28 percent of confirmed cases of the coronavirus (Latinos, however, are a much smaller percentage of deaths than in the population). In Michigan, blacks are 14 percent of the population but 41 percent of the victims. An even more striking disparity has occurred in Milwaukee, where blacks account for 26 percent of the population but are half of the reported cases and 81 percent of deaths. Here is a starter table.

For New York State, the blacks represent 28 percent of victims of COVID-19, but are 22 percent of the population. Hispanics are 34 percent of the victims and 29 percent of the population. (Victims are 60.7 percent male and 39.2 percent female, a difference that holds nationwide.)

In New York City, the higher-income areas of Manhattan are largely virus-free whereas above 125th Street the numbers shift to higher rates of infection. 

Kendi's article notes that Latinos are a much smaller percentage of deaths in Illinois than their proportion of the population. In fact, the disparity between deaths among black victims of the virus and the population is erased in Illinois by the opposite relationship among Latinos, i.e., fewer deaths relative to their share of the population. If the two percentages are added together they are both 35 percent. A worrisome feature for Chicago is that its ability to handle a surge of coronavirus cases is limited by its pre-virus financial problems.

However, on Long Island, in both Nassau and Suffolk County, deaths in Latino communities are much higher than in the rest of the population. 

Not in the article are some possible explanations of the disparities. Here are some I can think of:

• Commute. The trip to work is likely to be on public transit in urban areas, buses or commuter trains.
• Occupation. African Americans in Illinois are well represented in occupations that bring them into contact with carriers of the virus, in hospitals, nursing homes, and in health care aide roles; as delivery personnel and drivers; and in food and drug stores.
• Housing. Intergenerational living, with three generations under the same roof, is common, as both a cultural and an income-related factor.
• Health. The largest numbers of comorbidities with the COVID-19 virus are connected with hypertension and diabetes. Early and severe hypertension among African Americans has been tied to salt sensitivity. Obesity is another risk factor for both hypertension and diabetes.

COVID-19 STATUS | U.S. Summary in One Table

April 5, 2020—The largest number of Americans have been suffering from the COVID-19 virus in eight states and the District of Columbia. As of April 4, the states were, in order of death rates: New York, New Jersey, Louisiana, Michigan, Connecticut, Washington, Vermont, Massachusetts. Their death rates all exceed the national average death rate to date of 2.6 per 100,000 population. The list of the worst-hit states underscores the role of social interaction in spreading the disease. New York City was the first big U.S. city to suffer from the pandemic, and its hospitals have quickly been overwhelmed by its spread. Governor Andrew Cuomo provides a daily briefing on his handling of the public health crisis.

Confirmed Cases and Deaths

Two main measures are being used to gauge the progress of the disease: confirmed cases and deaths. Both measures have built-in problems.

Confirmed cases provide an earlier estimate of the extent of the spread of the disease than deaths. It can take a week or more for symptoms to appear, and then it may take another week or more for recovery. Patients can be hospitalized for weeks before recovering or succumbing to the disease.

However, confirmed cases depend on the availability of testing equipment and personnel, and in the early days of the pandemic in the United States tests were in short supply.  

For this reason, a low rate of cases to population may simply mean that fewer people are being tested in a state rather than that the disease is not spreading in a state. For the same reason, the case fatality rate is a less reliable number than deaths relative to population.

Deaths by cause would seem to be a simple enough number to keep track of. In a democracy it is hard to hide a dead body for long. Deaths are closely observed and recorded and whistleblowers historically have not been, as in dictatorships, punished for speaking out. A cause of death must be listed. The course of the COVID-19 disease is easy enough to spot. There are in fact some problems with the data, but let's look first at the reported numbers.

New York State tops the ranked list of deaths per 100,000 population, with 18.3 recorded as of today. Within New York State, the most densely populated counties are suffering the most.

New Jersey and Louisiana both have half the severity of New York State, about 9 per 100,000. Michigan and Connecticut are 5 per 100,000. These numbers are rising daily.

As a comparison, the average number of deaths in the United States from traffic fatalities in a year is 12.4 per 100,000. (Note that the traffic fatalities number is the sum of events happening over a year's time, whereas we have only three months of pandemic data.) 

The overall U.S. death rate to date from the coronavirus is 2.6 per 100,000 population.

Issues with Cause of Death Data

Two kinds of issues with the data on death rates are emerging: 

• Underreporting of COVID-19 deaths. Some jurisdictions require that a test for the presence of the virus have been conducted in order to list it as a cause of death. So the absence of testing kits both lowers the number of cases and the number of deaths.
• Lack of data about victims. Even when the deaths are properly recorded, the hospitals or doctors signing the death certificates may be so pressed for time or staff that they are not recording demographic data about the victims. Ibram X. Kendi, in “Why Don’t We Know Who the Coronavirus Victims Are?” The Atlantic, April 1, 2020, suggests that African Americans are disproportionately the victims, but in many states we don't know. He asks why other states don't report this information—the problems including multiple illnesses and the lack of a test to prove that the victim had the virus; the coroner may be insisting on such proof (here is the Suffolk County, NY procedure for reporting a death). 

Who Are the Victims?

The evidence so far is that more blacks are victims than their proportion of the population, and men are much more likely to be victims than women.

Kendi cites data showing that African Americans are 14.6 percentof the Illinois population, but are 28 percent of confirmed cases of the coronavirus (Latinos, however, are a smaller percentage of deaths than in the population). An even more striking disparity has occurred in Milwaukee, where blacks account for 26 percent of the population but are half of the reported cases and 81 percent of deaths. In Michigan, blacks are 14 percent of the population but 41 percent of the victims.

Support for Masks, Shutdown

Support has been growing for closing meeting places like restaurants and wearing face masks in public. The support for these actions has bubbled up from the states rather than having been led from Washington. The White House at first did not give credence to the pandemic's arrival in the United States and then expressed concern about interfering with economic activity to slow the progress of the disease.

Among the top nine victims of the virus, blue states predominate. Some of the governors of these states have clashed with the President on getting support in the form of supplies, equipment or a national shutdown or mask-wearing policy. 

Democratic New York City and State, with more than 18 deaths per 100,000 population in the state, have supported closing public meeting places. Four other states and D.C. have Democratic leadership. These leaders of these states were early in supporting closing public places until the apex of the disease has passed and in calling for an immediate end to tariffs on medical supplies from China.

The other three states (Louisiana, Vermont and Massachusetts) are purple. Two have Republican governors and one has a Republican senator. Among the next nine states, ranked by death rates, three are red states and two are purple (Colorado and Pennsylvania).

In states with Republican or mixed party leadership, leaders have often appeared to wait for direction from the White House. This has sometimes led to disagreement between Republican Governors and Democratic Mayors over delays in locking down or advice on social distancing.

Note on Data: Confirmed cases and deaths by state are as of April 4, 2020 from the Johns Hopkins University Coronavirus website. A convenient tabular form of the JHU data was posted by The Guardian later on the same day. Total number of U.S. cases and deaths added by JT Marlin. Population data are from the U.S.Census Bureau, Population Division, Table 1. Annual Estimates of the Resident Population for the United States, Regions, States, and Puerto Rico: April 1, 2010 to July 1, 2019 (NST-EST2019-01), December 2019. The Census Bureau documents its estimation methods. Calculations of cases/population, deaths per 100,000 population and case fatality rates by JT Marlin.

AMAZON AND GM | Trumponomics Takes a Hit

From 20 final cities, Amazon chose to locate in two
states, NY and VA, that voted for Clinton in 2016.
Meanwhile, MI and OH, which voted for Trump,
 are taking the brunt of GM's layoffs.

The following is posted by permission of Dana Chasin, who sent this out as Update 314 to his list, under the title: "An Economy Shifting Gears: What do Amazon's new HQs and the GM Layoffs Portend?" GM's layoffs and Amazon's new headquarters expansions show that Trump's bets on revival of car manufacturing, as opposed to embrace of technology, are not paying off. States that voted for Clinton in 2016 are winning and two states that believed in Trump's promises for manufacturing are losing. Trump's beggar-my-neighbor tariff policies are not helping American manufacturing.

Major tidal shifts and cross-currents underlying the changing American industrial landscape have been on full display in recent weeks. Last month, Amazon announced it was going to base its second headquarters out of both New York and Virginia, promising to bring 25,000 jobs to each. [This is a significant economic victory for two states that voted for Hillary Clinton for President in 2016.]

In an equally important but opposite development yesterday, General Motors announced its plan to eliminate up to 14,000 jobs in five plants in three states and Canada. Three of the plants are in Michigan and Ohio, which voted for Trump after campaign promises to revive manufacturing.

GM's surprise decision has rattled the Trump Administration and Republican leadership, challenging the belief that the economy is running fine on high octane fuel and should continue unfettered.

GM’s announcement comes less than two years after it announced it would add or keep 7,000 jobs in the United States. It translates to an expected loss of 14,700 jobs. The decision comes only a month after GM offered buyouts to as many as 18,000 long-time employees, only 4,000 of whom accepted the offer by the November 19 deadline – 3,000 employees short of its 7,000 target. With the buyout program behind schedule, the decision to idle five facilities did not come as a surprise to many. The Lordstown assembly plant in Warren, Ohio, for example, had gone from three shifts per day in January 2017 to one shift this past April.

The United Auto Workers said it would challenge GM’s decision. If GM still hasn’t reached its 7,000 buyout goal by January, further involuntary cuts are likely.

While the Tax Cuts and Jobs Act (TCJA) of 2017 purported to create record tax windfall for corporations to reinvest, the picture with GM is more complicated. In GM’s case, the TCJA did not account for “deferred tax assets” which the company was able to accumulate due to poor performance predating the Great Recession. These assets allow companies to reduce taxable income, meaning GM had already been afforded a low tax bill for over a decade. The newly reduced corporate tax rate therefore rendered these assets less valuable, forcing GM to take a $7 billion charge against earnings during the fourth-quarter of FY 2017.

Executives expected to see an eventual benefit from the new tax law, but not for years to come. It’s hard to claim that in absence of sizable deferred tax assets, GM would have even used their $157 million in federal savings to support American plants and employees. An October survey published by the National Association for Business Economics reported 81 percent of 116 companies surveyed had not changed plans for investment or hiring as a result of the TCJA.

The tariffs put forward by the Trump administration are another possible contributing factor to GM’s financial troubles. The timeline of the trade war is highlighted below:

June 1, 2018: The Trump Administration ended the exemption of Mexico, Canada and the EU from aluminium and steel tariffs. GM representatives warned the White House that these tariffs would drastically hurt the firm, saying that “this could still lead to less investment, fewer jobs, and lower wages for our employees.”

July 25, 2018: GM was forced to reduce its profits forecast for 2018, tanking stock by 4.6 percent. GM’s CFO predicted the original tariffs in March and the ending of exemptions to the US’s most trusted partners in June could add “as much as 700 million to GM’s costs” for FY 2018.

September 24, 2018: The White House compounded the problem by unveiling a new, stringent set of tariffs on Chinese automotive exports, putting in place a 10 percent levy on brakes, car batteries, tires, etc. Analysts predict these new tariffs will lead to higher sticker prices for cars and lower car sales. GM, like all other US car manufacturers, relies on foreign-based subsidiary plants and goods to create finished products, making broad tariffs doubly damaging to an already wounded industry. With GM historically leading the way in moving jobs to Mexico and a less favorable domestic/international tax rate differential introduced in the TCJA, the Trump administration's tariffs have only produced escalated offshoring.

Starting on the campaign trail, President Trump made a series of promises to the American people about jobs, specifically jobs in manufacturing. During a speech in Michigan in October 2016, Trump promised to “bring back ... jobs” and said “the long nightmare of jobs leaving Michigan will be coming to an end.”

He blamed past factory closures on Democratic failures and promised not to let that happen again. The GM decision reflects the fecklessness of Trump’s approach. Many voted for him because of his pledge to save the manufacturing industry.

Instead, he has put forth policies that undermine that goal and expose fears that become self-fulfilling trade prophesies in the form of retaliation. Plants will be closing in two states that were key to Trump's victory – Michigan and Ohio.

The GM closures thwart his guarantees to protect manufacturing and undermine his portrayal of a healthy economy that is growing with no end in sight and equitable for minority groups.

Almost simultaneously, Amazon announced its locations for its new HQ2. After a country-wide tax benefit bidding war, it has pledged to bring 25,000 jobs to both New York and Virginia, as well as an estimated 67,000 and 22,000 indirect jobs to each respectively.

In return, Virginia agreed to give Amazon $819 million and New York agreed to $1.85 billion. Both states believe the benefits accrued from Amazon will far outweigh these costs. Gov. Ralph Northam of Virginia expects “Amazon to invest $2.5 billion in the commonwealth and create $3.2 billion in tax revenue.”

Will this model work? Amazon is encouraged to fulfill its jobs promise through "performance-based direct incentives," meaning that for each pledged job that comes to fruition, they get a certain amount of tax breaks. This kind of city and state tax break is by no means an uncommon way of driving business to invest in a given area, and has been utilized in the past by other tech company giants, such as Google.

Although the model has proven very effective at creating jobs, there are some accompanying flaws. In Seattle, Amazon’s first HQ brought an economic boom and more than 40,000 jobs to the city; it also cost taxpayers hundreds of millions of dollars in ongoing infrastructure and transportation upgrades around the site, while neglecting other areas of the city. Affordable housing underwent a serious crisis. However, Amazon has worked with Virginia and New York governments to try and get in front of some of these issues, pledging money for additional schools and low-income housing.

Moreover, Arlington and Long Island are not Seattle. Bringing 100,000 jobs to these areas is a boon even to these booming coastal metropolises.

Trump has criticized Amazon repeatedly in the past and again following the announcement of HQ2. The economic tide seems to be working against him – 44 cents of every dollar spent online goes to Amazon. As much as Trump wants new jobs in the manufacturing sector, the evidence shows that the tech sector is the one to watch. Tech jobs offer the same, if not better, benefits as traditional manufacturing jobs, such as 401ks for salaried workers. States are quite literally fighting over these Amazon jobs, whereas auto-manufacturing jobs in the rust belt have become more burdensome than beneficial.

Even GM will be using its hefty savings to further bulk up its electric and autonomous vehicle development through R&D programs that already see more than $1 billion a year in company investment. Trump can no longer keep up the facade of a booming economy fueled by the manufacturing industry, and his supporters, especially those in Michigan and Ohio, must adjust to these false hopes and broken promises.

REAL ESTATE | Bottom-Fishing

Jan. 24, 2012–The state unemployment numbers for December, released today, show some numbers significantly lower than one year ago. Six states that have unemployment rates above the national average showed changes in their unemployment rates of 1.2 percentage points or higher. See Table C at www.bls.gov, today's press release.

States with above-average unemployment and statistically significant unemployment-rate changes,  Dec. 2011 vs. Dec. 2010. Ranked by change in unemployment.

-----------------------------------------------------------

                                |    Rate   | Over-the-year 

             State              |  December |   change(p)

                                |  2011(p)  |               

-----------------------------------------------------------

Nevada .........................|    12.6   |      -2.3     

Florida ........................|     9.9   |      -2.1     

Michigan .......................|     9.3   |      -1.8     

South Carolina .................|     9.5   |      -1.4     

California .....................|    11.1   |      -1.4     

Kentucky .......................|     9.1   |      -1.2     

-----------------------------------------------------------

   p = preliminary. Data are seasonally adjusted.

If one were bottom-fishing for real estate bargains based on state averages, these states would be worth investigating because a substantial drop in unemployment is by itself a highly favorable economic indicator.

However, where unemployment rates are still in double digits, as in Nevada and California, recovery is further away. 

California, Florida and Nevada were (along with Arizona) hit especially hard by a decline is housing prices. Michigan was affected more by the downturn in the auto industry.

Naturally, state averages are just a first step in an analysis. Within a large state, indicators can vary widely. County data, for example, show that California's Silicon Valley (Santa Clara County) is recovering faster than the state as a whole.

JOBS | Maloney–NYS Lost Big from Big 3 Shutdown

A feud of sorts has broken out between Tennessee and Michigan. A Tennessee senator led the battle against approving a proposed bailout of the Big 3 auto companies. Tennessee is the home of some automobile factories owned by foreign-based manufacturers.

Joining the argument now on the side of Michigan, Rep. Carolyn Maloney (D-NYC) has issued a report that reminds New Yorkers that 150,000 New York State jobs are dependent on the U.S. auto industry. Of this figure, 3,000 jobs are in GM and Ford plants. The rest are in auto parts and other suppliers of goods and services to auto manufacturers, dealerships, and indirect losses from suppliers of goods and services to the auto workers who lose their jobs.

The job loss would be the largest single-year loss since 1991, says Rep. Maloney, using data from an Economic Policy Institute report. The EPI report provides data to show NY State could lose 144,600 jobs if the Big 3 shut down -- out of 3.3 million jobs at stake nationally. The NY State comptroller has predicted that New York could lose as many as 225,000 jobs over the next two years. The 150,000 possible lost jobs would presumably be in addition although there may be some overlap in the projection methods.

A Bush Administration spokesperson has argued that a fallback possibility (given that the outgoing Senate refused to vote for an auto industry bailout) is for an "orderly" bankruptcy of GM and Chrysler instead of a bailout. President Bush on December 19 announced $13.4 billion emergency loans to GM and Chrysler, with $4 billion more in February, provided the companies develop reorganization plans that show they can become profitable soon.

This is what Rep. Maloney has been calling for, i.e., immediate use of some of the TARP funds to buy time for the automakers. Ford is not in such dire straits as the other two of the Big 3 and can reportedly operate for another year without government support, but joined in the request for immediate aid.

Rep. Maloney is among those who have been mentioned as possible candidates for the NY State Senate seat that is expected to be vacated by Sen. Hillary Clinton when she takes up the position of Secretary of State in the Obama Administration.