Jane the Actuary General Interest

No Data To Guide Opening Schools? Not True – But We Need To Collect It

a daycare teacher in action; https://www.mountainhome.af.mil/News/Features/Article/311380/base-honors-child-care-provider-with-annual-award/ (public domain)

Can we safely open schools without placing students, teachers, and staff at risk?  What procedures can be followed to reduce the risk?  What restrictions can we reasonably expect students to comply with?  It all seems like a dizzying set of unknowns.  (Cue the Frozen 2 music.)

But at the same time, Illinois has permitted daycares to open ever since Phase 3 — under a significant set of restrictions to be sure, but open nonetheless.  This ought to be a treasure trove of data on exactly these questions of risk.

The problem is, we don’t have the data.  There’s no tracking of daycare outbreaks in the same way as for long-term care facilities.  And here’s the reply I received to a query I sent to the Illinois Department of Health COVID-19 e-mailbox:

At this time we have not been provided with data in regards to childcare centers. We don’t know if that information will be gathered and analyzed.

Which means that, absent more extensive investigative reporting, all that’s available is a smattering of news reports, both here in Illinois and elsewhere (where procedures and guidelines vary).

At The Center Square, July 7, 2020:

The Illinois Department of Public Health reported 12 outbreaks at daycares, affecting 247 people, including 32 children.

News Channel 20, July 8, 2020, reported a daycare in which a single employee tested positive, but no other workers and no children.

In Texas, as of July 9, Texas Health and Human Services reported 1,799 positive tests — 1,207 staff and 592 children — at 1,131 child care centers.  There are 12,222 centers open in the state, so this means that about 10% of centers had at least one case.  How many of these are instances of an “outbreak” in which covid was passed from one child to another or from a child to an employee?  That’s not clear from these numbers, but certainly many, and perhaps most of these cases were of a single person.  As KVUE reports, citing the Texas Tribune, the state has been unwilling to provide more data, citing “protected health information.”  And in any case, the state also relaxed, then tightened its requirements for daycares, so their covid prevalence is not a helpful statistic without knowing under what specific circumstances it was transmitted among staff or children.  After all, if their employees did not wear masks, and Illinois’ do, that matters, too.

In Connecticut, NBC Connecticut reported on July 3:

About 1,552 daycares have remained open since the beginning of the pandemic. So how many COVID-19 cases have they experienced?

“I’ve heard of 20 to 30 at the most throughout the state while there have been 1,500 programs open over the past three months,” Early Childhood Commissioner Beth Bye said.

And on June 24, NPR reported

The Y says that during the lockdowns it cared for up to 40,000 children between the ages of 1 and 14 at 1,100 separate sites, often in partnership with local and state governments. And in New York City, the pandemic’s national epicenter in March and April, the city’s Department of Education reports that it cared for more than 10,000 children at 170 sites.

Working in early days, and on very short notice, these two organizations followed safety guidance that closely resembles what’s now been officially put out by the Centers for Disease Control and Prevention. The Y says a few staff members and parents at sites around the country did test positive, but there are no records of having more than one case at a site. This, among a population of essential workers.

In a separate, unscientific survey of child care centers, Brown University economist Emily Oster found that, as of Tuesday afternoon, among 916 centers serving more than 20,000 children, just over 1% of staff and 0.16% of children were confirmed infected with the coronavirus.

Of course, daycare centers and schools are not the same.  But schools ought to be safer than daycare centers in most respects.  Schoolchildren can be expected to wear a mask in the same manner as they are expected to comply with other school rules — that is, as long as we’re willing to enforce that demand and provide alternate schooling arrangements for students who won’t (and in cases where parents won’t reinforce that requirement).  Schoolchildren don’t need to play with toys, don’t chew on toys, don’t need the same level of direct contact with teachers.  And so on.

But, again, what will work and what won’t, in classrooms, depends on learning from what has and what hasn’t worked, in daycare rooms.  And we can’t learn from that if we don’t have information.

Jane the Actuary General Interest

Forbes post, “How The Weimar Hyperinflation Really Went Down – And Why That Matters”

Originally published at Forbes.com on July 6, 2020.

 

Modern Monetary Theory — the dream that we can spend quite a bit more money on such government programs as the Green New Deal, a Universal Basic Income, or similar agenda items merely by printing the money (or the 2020 virtual equivalent thereof) — insists that the United States has much more “room” for spending-via-money-printing without triggering inflation than is otherwise believed to be the case, and, in any event, if inflation does appear to be getting out of hand, our politicians and economics-experts can easily adjust as needed. My lament has long been that is hubris of the highest order, to imagine that it is possible to come up to that line, but not crossing over into unleashing exactly the sort of inflation which can exact so much harm on so many, especially the elderly with fixed incomes.

But I’ve now read in more depth about the hyperinflation of Weimar Germany, in the form of the book When Money Dies, by Adam Fergusson (first published in 1975, and reprinted in 2010), and have been surprised to learn that the story is not quite what I had believed to be the case. The main outline of the crisis is well-known: during World War I, the government funded its costs by means of borrowing, expecting to make up the funds by profiting from a victory. Instead, they were saddled with unfathomably-high reparations, which they were obliged to pay in hard currency. To continue to fund regular government operations, they turned to the printing press; and the more inflation increased, the more difficult it became to collect any sort of taxes paid in arrears. An already-bad situation became much, much worse in 1923, especially in summer and fall, until a stabilization plan pegging a new currency to items of tangible value, took hold in November, in which, when all was said and done, a new mark, the Rentenmark, was worth 1 trillion Reichsmark; and at the same time, at long last, the German government was obliged to balance its budget. (Wikipedia is one ready source of information.)

The story seems straightforward enough — and offers the prospect that some other, smarter, more technocratic, government could do a better job in the future. But the piece to this story that’s missing is this:

Until the crisis took that turn for the (far) worse in 1923, the politicians and industrialists who controlled Germany judged their situation to be the lesser of two evils.

German businesses managed to cope with the situation in various ways, such as dealing in other currencies. Unions demanded regular and automatic inflation adjustments which, until the fall of 1922, kept blue-collar wages at an acceptable level relative to prices. Anyone with any cash invested in stocks to hold on to some of the value of their funds. Renters benefited from rent control based on pre-inflation rents; borrowers saw the real cost of their debt vanish. Clever speculators might even feel they could profit from the situation. And the frenzy with which everyone spent, to get rid of their cash for items of value meant that, ironically, there was little unemployment in the country, however weak the purchasing power may have been.

Fergusson writes of the wealthy industrialist Hugo Stinnes, in spring 1922,

“He justified inflation as the means of guaranteeing full employment, not as something desirable but simply as the only course open to a benevolent government. It was, he maintained, the only way whereby the life of the people could be sustained” (p. 74).

And into this mix fell the Ruhrkampf: the occupation, in January 1923, of the Ruhr Valley, the industrial heart of the country, by French and Belgian armies, in order to seize coal and other goods that they claimed as reparations payments. In protest, the Germans adopted a policy of passive resistance — mines and factories shut down, and the German government printed yet more marks in order to fund relief programs for the occupied Ruhr, and in the succeeding months crime, looting, barter, all accelerated as the mark collapsed. In September of 1923, the financial devastation Germany faced finally led the government to declare the end of the passive resistance — and a State of Emergency, and further political chaos and threats of local rebellions, plus, as the harvest proceeded, the refusal of farmers to bring food to market as long as the currency was worthless — before the ultimate implementation of currency reform in conjunction with the Dawes Plan to restructure reparations and provide loans.

Here are, in the end, two key paragraphs in Fergusson’s book:

“Long before the Ruhr invasion, and perhaps even before the preliminary meetings of the Reparations Commission, there came a stage when it was politically impossible to halt inflation. In the middle of 1920, after the brief post-Kapp Putsch period of the mark’s stability, the competitiveness of German exports declined, with unemployment beginning to build up as a result. The point was presumably not lost on the inflators. Recovery of the mark could not be achieved without immediate repercussions in terms of bankruptcies, redundancies, short-time working, unemployment, strikes, hunger, demonstrations, Communist agitation, violence, the collapse of civil order, and thus (it was believed), insurrection and revolution itself.

“Much as it may have been recognized that stability would have to be arranged some day, and that the greater the delay the harder it would be, there never seemed to be a good time to invite trouble of that order. Day by day through 1920, 1921 and 1922 the reckoning was postponed, the more (not the less) readily as the prospective consequences of inflation became more frightening. The conflicting objectives of avoiding unemployment and avoiding insolvency ceased at last to conflict when Germany had both” (p. 253 – 254).

This means that the Weimar hyperinflation is not merely a cautionary tale with respect to monetary policy, but with respect to larger issues of political dysfunction. How often do we worry about the depletion of the Social Security Trust Fund, but nonetheless assume that sometime between now and then, someone will fix it? The history of the Weimar hyperinflation forces us to admit that we cannot take it for granted that, if only the situation gets bad enough, someone else will fix it.

 

December 2024 Author’s note: the terms of my affiliation with Forbes enable me to republish materials on other sites, so I am updating my personal website by duplicating a selected portion of my Forbes writing here.