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Experts Think The Economy Would Be Stronger If COVID-19 Lockdowns Had Been More Aggressive

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Back in the early days of the coronavirus in the U.S., many economists believed that aggressive lockdowns would be the best long-term solution for managing the pandemic, despite the short-term economic pain they would cause. Six months later, we wanted to know: Did that logic hold up? And what political events could still be in store to alter the course of the country’s ongoing recovery from the current recession?

In this week’s installment of our economic survey, conducted in partnership with the Initiative on Global Markets at the University of Chicago Booth School of Business, FiveThirtyEight polled 32 quantitative macroeconomists about the present and future of the economy. And because we couldn’t resist some Monday-morning quarterbacking, we also asked whether the lockdowns earlier in the year were too aggressive or not aggressive enough.

Out of those surveyed, 74 percent of economists said the U.S. would be in a better economic position now if lockdowns had been more aggressive at the beginning of the crisis. Among that camp, the most commonly cited reason was that early control over the virus would have allowed a smoother and more comprehensive return to economic activity later on. “More aggressive lockdowns would have [gotten] the country in a better position (health wise) as we head into fall and winter,” said Andrew Patton, a professor of economics and finance at Duke University.

“It would also have signaled more clearly to the whole country that we need to take the virus seriously, and work together to get it under control,” Patton said. He paraphrased a quote from Dr. Ashish Jha, dean of Brown University’s School of Public Health, in a recent New York Times piece: “There’s no peeing section in the pool,” meaning you can’t just have some areas locked down while others see looser restrictions — and greater viral spread.

Proponents of tighter lockdowns pointed to Japan and various European countries (such as Germany, Norway and Denmark) as examples of how reducing the virus to extremely low levels early on allowed for a quicker recovery. Others noted that children could have returned to school for in-person learning faster with earlier control over the virus — a major consideration in maximizing the country’s economic power as it bounces back from the pandemic.

Among the 26 percent who thought lockdowns should have been less aggressive, the main theme was that more good could have been done with a targeted approach that protected at-risk populations and stopped potential superspreading events, while allowing more activity overall. Others thought the lockdowns didn’t even matter much, or that most of the reduced activity was due to individual self-regulation rather than government intervention.

“I think the positive effect of more commerce on employment probably would have outweighed the higher infection rates in most places,” said Deborah Lucas, a professor of finance at the MIT Sloan School of Management. “I also think the shutdowns were not very effective.”

“I think [a more aggressive lockdown] would barely make any difference since a large part of the population imposed mobility restrictions on themselves out of precautionary motives,” said Christiane Baumeister, professor of economics at the University of Notre Dame. Baumeister said she chose the less aggressive option in the survey because self-regulation “is not something that can actually be controlled by the authorities.”

In the same vein — but this time, looking forward — we asked the economists to imagine a new shutdown had to occur as the result of a spike in COVID-19 cases. Which activities would they shut down first if they also wanted to minimize economic damage? With the caveat that our panel consists of economic experts — not epidemiologists — they clearly prioritized indoor dining (and to a lesser extent, gyms) to be the first shut down, while outdoor dining and recreation were at the bottom of the list:

What should be shut down to minimize economic damage?

The activities and places that should be shut down first to curtail economic damage if there’s a spike in COVID-19 cases, according to economists

Activity/Place 1st place votes* Avg. Priority Rank
Indoor dining 13 2.3
Gyms 5 3.5
In-person political campaigning 6 4.4
Arts & cultural institutions (museums, theaters) 2 4.5
Universities 1 5.0
Retail stores 0 6.0
Interstate travel 2 7.1
K-12 schools 1 7.1
Day cares 0 8.0
Outdoor dining 0 8.2
Outdoor recreation 0 9.9

*No. of respondents who listed this as the top priority, out of 30 who completed the question.

Source: FIVETHIRTYEIGHT/IGM COVID-19 ECONOMIC SURVEY

Interestingly, most economists did not especially prioritize shutting down schools. Universities and K-12 schools each received one first-priority vote apiece (out of 30 respondents who answered the question), and neither cracked the top four activities to be shut down first. Day care centers were even lower in the shutdown priority order. This does not mean that our panel thought reopening schools was necessarily safer, but it does underscore how much the panel thinks schools — and child care in general — help power the economy, and that shutting them down could have a deleterious economic effect.

In terms of future policy effects, we also included a longer-term version of a question we posed to the panel about a month ago: Which developments in the world of COVID-19 or the political world would cause economists’ GDP growth predictions to change for the better (or worse)? Again, schools are a big economic engine.1

What would make the economy look better or worse in 2021?

Share of economists who predicted that certain scenarios would increase or decrease GDP growth between the fourth quarters of 2020 and 2021

In this scenario, 2021 growth will be…
Scenario Substantially Lower about the same Substantially Higher
Vaccine approved by Election Day 0% 50% 50%
Democrats control Presidency + Congress 0 53 47
K-12 classes are taught in person 3 50 47
Biden wins; Congress stays same 6 94 0
K-12 classes are taught virtually 31 66 3
Trump wins; Congress stays same 41 59 0
Election viewed as illegitimate 47 50 3
No additional stimulus by November 59 38 3

The survey of 32 economists was conducted Sep. 18-21.

Source: FIVETHIRTYEIGHT/IGM COVID-19 ECONOMIC SURVEY

The results also bring into focus how the economists are viewing the election results and overall political climate. We’ve written many times that they believe an infusion of additional money from Congress — whether in the form of enhanced federal unemployment insurance or another series of stimulus payments — is paramount to stabilize the economy through the recovery. According to our survey results, the biggest economic risk for 2021 is the possibility that no additional stimulus is passed by November 2020. And the economists see Democrats’ control of Congress as having a significant effect on growth potential in 2021, likely because they have been much more willing to pass government spending bills. (Note that even if Joe Biden wins the presidency but the Senate doesn’t flip to the Democrats, 94 percent of our panelists said their outlook for 2021 would remain essentially the same as it is now.)

“I think that failing to pass fiscal stimulus is the biggest downside risk,” said Jonathan Wright, an economist at Johns Hopkins University who has been consulting with FiveThirtyEight on the survey. “And that’s probably made more likely by the RBG fight.”

And of course, the possibility of rapid vaccine development is the single highest-upside scenario in the results above, while a situation where the election is viewed as illegitimate — a real possibility — was another of the worst-case scenarios, according to the panel.

Yet no matter what happens, we can probably expect the stock market to pull through with minimal damage. As I wrote about in June, the markets have not reflected the recession at large, with the S&P 500 recovering practically all of its losses since late February (even after a shaky start to September). To get more clarity on why this is happening, we gave the experts a series of explanations for the seeming disconnect between the stock market and the rest of the economy, asking them to assign each option an importance rating from 0 to 1, where 1 was the most important.

Why is the stock market doing so well in a recession?

Leading explanations for the stock market’s continued growth, even as the rest of the economy is in a recession

Explanation Weight
Expansionary policies by the Federal Reserve 0.35
Some companies (e.g., tech) are benefiting from the pandemic 0.18
Savings has increased among the wealthy, who then invest 0.12
It’s irrational, and the bubble will eventually burst 0.12
It’s normal for the market to not correlate with the larger economy 0.11
Investors are optimistic about post-pandemic growth 0.10
Other 0.02

Respondents were asked to assign each category a weight from 0 to 1, and all responses had to sum to 1.

Source: FIVETHIRTYEIGHT/IGM COVID-19 ECONOMIC SURVEY

Although some credence was given to the notion that surging tech companies were keeping the market afloat, economists clearly think the Federal Reserve bears the single-most responsibility for the stock market’s rally. “Clearly, the panel believes that the ultra-low interest rates and targeted injections of liquidity into the economy have had a major effect on the stock market,” said Allan Timmermann, an economist at the University of California, San Diego who has also been consulting with FiveThirtyEight on the survey.

There was also a small — though not nonexistent — weight given to the possibility that this is all just an irrational bubble in prices, poised to burst.

Perhaps it is telling, however, that the lowest-weighted option available was genuine optimism on the part of investors. As we’ve said, the stock market is not the economy.

Looking at the whole picture, most economists think the U.S. could have done a better job at initially controlling the virus through more aggressive lockdowns, which in turn would have landed the country in a better economic place. Lawmakers also still have choices that can materially affect the economy’s trajectory throughout 2021 — and so do voters. Just how much we second-guess those decisions, though, remains to be seen.

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Toronto FC hoping to make MLS Cup run having spent much of 2020 far from home

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On a recent Thursday in Hartford, Conn., Toronto FC goalkeeper Quentin Westberg pondered the dichotomy of wanting to reach MLS Cup on Dec. 12, but also desiring to see his family again. Meanwhile, Jim Liston, the team’s director of sports science, was planning a trip to Lowe’s to buy 15 garbage cans so players could have an ice bath after training. As for manager Greg Vanney, he was fretting about his team’s health and the lack of practice time their schedule was affording.

Such is the life of a team as it attempts to not only navigate its way through the COVID-19 pandemic, but has been forced to do it away from home.

Due to travel restrictions between the U.S. and Canada, TFC — like the league’s other two Canadian teams, Montreal Impact and Vancouver Whitecaps — set up a “home” base in the U.S. for the remainder of the season; Toronto were stationed in Hartford. (Vancouver Whitecaps took roost in Portland, ground-sharing with Timbers, while Montreal Impact split use of New York Red Bulls’ facilities in Harrison, N.J.) This was on top of nearly every team spending nearly a month inside a bubble back in July at the MLS is Back Tournament outside Orlando, Florida.

The Reds spent about seven weeks back in Toronto as they played a series of matches against Canadian teams. In mid-September, the remainder of the regular season — and the temporary move to Hartford — beckoned. The vagabond nature of the campaign is what led Liston to joke that he was willing to discuss “whatever five seasons” the team has been through so far. But for Vanney and the players, the campaign has required a special kind of focus.

“A lot of what we’ve done here, and what we try to preach here is just control the controllables, and don’t get too drawn into the things you can’t,” Vanney told ESPN. “Roll with it, and make the best out of whatever the situation is.”

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Toronto has largely succeeded in spite of its odyssey. While there was disappointment at missing out on the Supporters’ Shield to the Philadelphia Union, TFC went 7-3-2 during its Hartford sojourn and finished with the second-best record in the league. But the challenges have still been immense. Simply being out of one’s home environment is difficult enough, but the time spent away from family and loved ones weighs heavy on the psyche, even as Vanney has given players the occasional trip back to Toronto — under quarantine — to reconnect with loved ones.

“It’s just very different, very challenging and emotionally exhausting,” Westberg said of his experience while based in Hartford.

Westberg has arguably had it tougher than most. The TFC goalkeeper is married with four children, including a baby girl who was born in June. For that reason, Westberg and his wife, Ania, made the decision at the end of September that it would be better for her and their kids to head back to his native France so they could be surrounded by family. Westberg called it “the least bad decision,” but there are difficulties nonetheless.

“I’m a very even person, and this year has challenged me a lot,” he said. “I’m still pretty even, but I keep a lot to myself and for sure there’s some difficult days, seeing your family [struggle] from your absence.”

The inability to be home has affected the players and staff in other ways. In Toronto, there are ways of disengaging from the game. Being with friends, loved ones or even in familiar surroundings can be the best medicine in terms of forgetting a bad game or training session. But in Hartford, at the team’s hotel, that escape is nearly impossible even as players try to distract themselves by reading or taking online classes.

“You don’t really unplug,” Westberg said. “You FaceTime family, or this or that, but it’s too short. You’re 100 percent focused on your soccer, and your whole day basically relies on being ready for whatever soccer activity that you have next, whether it’s practice or game. It’s good for your physique, it’s optimal for the way you eat and the way you [train]. But mentally, you’re not as fresh as your body.”

That isn’t to say there are only negatives to the separation. There is also an us-against-the-world mentality that Toronto has adopted, given that their players and personnel are experiencing the season in a way that is vastly different than most other teams. The team staff has done what it can to make their surroundings a home away from home, whether it’s personalizing the locker rooms at Rentschler Field or having hotel staff brand the surroundings in TFC colors. The hotel went so far as to bring in a barista who could consistently give the players their coffee fix. Supporters groups have even sent down banners in a bid to convey the fact that the players are remembered.

The care that TFC takes for players has extended to families back home, with the club supplying meals to loved ones three times a week.

On the logistical side, Liston made sure that one of the gyms used at MLS is Back was brought to TFC’s hotel in Hartford, and he remarked that the food at the hotel is “arguably the best we’ve ever had on the road.”

There have also been efforts to create new routines. Assistant coach Jason Bent, aka DJ Soops, has been in charge of the pregame music selection for the past 18 months — no easy feat for a squad that has a considerable international presence. In Hartford, Bent has set aside Thursday nights to spin music in one area of the hotel. He’ll even go live on Instagram or Twitch for those who prefer to relax in their rooms.

“[We] opened it to players and staff and basically anyone that’s part of our bubble to come relax, listen to music and just enjoy each other’s company,” Bent said. “I enjoy making people happy so if it’s helping everyone even in the slightest, I have no problem arranging the set and spinning.”

For Vanney, the pandemic and operating outside of the team’s home market has meant any number of challenges. He said the team has used three different training facilities in Hartford, with varying field conditions. He recognizes that the trips home are vital for the mental health of his players and staff, but any breaks also mean less time spent on the practice field. The compressed schedule, which at times involved games every three or four days, has had an impact as well. Even the best-laid plans in terms of squad rotation were impacted as minor injuries began popping up.

“We end up with a lot of guys in different positions because they need special kinds of treatment or care to help them get fit and back to health,” Vanney said. “So it ends up being a lot of different things kind of going on all at once, and that’s been the challenge of it.”

Recovery from matches has been complicated by the fact that TFC doesn’t have access to the same level of facilities that it does at home — hence Liston’s emergency trip to Lowe’s to fashion impromptu ice baths for the players. Then there are the different ways the players occupy themselves on the road as compared to home, especially amid the pandemic.

“There’s really no life outside of the hotel,” Liston said. “[At home], you may go walk the dog in the afternoon or go for a walk with your wife or friend or girlfriend or family and you’re out and about. The recommendation [here] is to kind of stay put. So you’ve got a really active population and pro athletes, who we’re asking them to be sedentary the rest of the time, kind of stay in the hotel from a COVID and safety standpoint. That’s not optimal for recovery either.”

There are also the creature comforts of home that are no longer available on the road, which can impact sleep.

“Sleep is the number one tool for recovery, and that’s definitely been a challenge,” Liston said. “We do well-being questionnaires and the scores on quality of sleep, and hours of sleep, just drop.”

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Tom Barlow and Brian White seal Toronto’s fate in a 2-1 win for New York Red Bulls. Watch MLS on ESPN+.

Another change has been same-day travel, which has drawn mixed reactions from the TFC players and staff. Vanney and Westberg are generally in favor, saying it reminds them of when they each played in France. Flying back the same night also means a training day isn’t lost. Liston has a different perspective in that he prefers arriving the day before, and then leaving the same day.

“I think [same-day travel] makes for a really long day,” he said. “And there’s definitely a negative impact on performance, taking three bus rides and a plane ride before your game. You’re getting home — it can be 12:30, but it could also be 1:30 in the morning, and that’s where you know our well-being scores and sleep hours and quality just disappear. When you have so many games in succession, you can’t make up the sleep.”

With the playoffs set to begin for TFC on Nov. 24, the end is in sight, even as it makes for a complex — and even conflicting — set of emotions.

“This is the tricky part. I miss them a lot,” Westberg said of his family. “But in a way I want to see them as [late] as possible in December, because obviously, there’s this idea that we want to do well in the playoffs and we want to keep going. TFC has a history of setting high standards and high expectations. It’s a heavy load to carry but also an exciting one.”

Win or lose, it’s a season they’ll never forget.

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Bettman: NHL is mulling temporary realignment

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The NHL is considering a temporary realignment of its teams for the 2020-21 season due to COVID-19 travel restrictions, according to commissioner Gary Bettman.

Bettman said Tuesday that restrictions on travel across the Canadian border, as well as “limitations in terms of quarantining when you go from certain states to other states” within the United States, could mean the NHL creates a more regionalized alignment for its upcoming season.

“As it relates to the travel issue, which is obviously the great unknown, we may have to temporarily realign to deal with geography, because having some of our teams travel from Florida to California may not make sense. It may be that we’re better off — particularly if we’re playing a reduced schedule, which we’re contemplating — keeping it geographically centric and more divisional-based; and realigning, again on a temporary basis, to deal with the travel issues,” Bettman said during a 2020 Paley International Council Summit panel with fellow commissioners Adam Silver of the NBA and Rob Manfred of MLB.

The NHL board of governors has a meeting scheduled for Thursday which will provide a progress report and possible recommendations for a season format, based on talks between the league and the NHL Players’ Association. The target date for starting next season remains Jan. 1.

Bettman said the league is considering a few scheduling options for the 2020-21 season. Something that’s off the table: playing the entire season in the kind of bubbles the NHL had in Toronto and Edmonton, Alberta, to complete last season. But Bettman said teams opening in their own arenas is a possibility, along with a modified bubble.

“We are exploring the possibility of playing in our own buildings without fans [or] fans where you can, which is going to be an arena-by-arena issue. But we’re also exploring the possibility of a hub. You’ll come in. You’ll play for 10 to 12 days. You’ll play a bunch of games without traveling. You’ll go back, go home for a week, be with your family. We’ll have our testing protocols and all the other things you need,” he said.

Bettman also indicated that the NHL is exploring “a hybrid, where some teams are in a bubble, some teams play at home and you move in and out.”

The NBA’s board of governors unanimously approved a deal with the players’ union that sets the stage for a season that will open on Dec. 22 and with a reduced schedule of 72 games. Silver said that the commissioners are in communication on COVID-19-related issues, especially the NBA and the NHL, since the two leagues’ teams share arenas and, in some cases, team owners.

Silver said he senses that the NBA will have fans in many of its buildings this season.

“We’re probably going to start one way, where we’re maybe a little bit more conservative than many of the jurisdictions allow,” he said. “What we’ve said to our teams is that we’ll continue to work with public health authorities. Arena issues are different than outdoor stadium issues. There will be certain standards for air filtration and air circulation. There may be a different standard for a suite than there will be for fans spaced in seats.”

Silver said there will be standardized protocols that are consistent from arena to arena, such as proximity between players and fans: “In certain cases, for seats near the floor, we’re going to be putting in testing programs, where fans will certify that they’ve been tested — some within 48 hours, some within day of game.” While Silver supported a continued expansion of the NBA postseason through its play-in tournament, Bettman said that he’s not in favor of expanded playoffs or “playing with the fundamentals of the game.” The NHL had 24 teams in its postseason last summer.

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The Battleground States Where We’ve Seen Some Movement In The Polls

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With apologies to The Raconteurs, the presidential race continues to be “steady as she goes,” with little sign of tightening despite a plethora of new polls. FiveThirtyEight’s presidential forecast gives Joe Biden an 89 in 100 shot at winning the election, while President Trump has just an 11 in 100 chance. This makes Biden the favorite, but still leaves open a narrow path to victory for Trump, for whom a reelection win would be surprising — but not utterly shocking.

At the same time, we also have fewer polls from live-caller surveys, which have historically been more accurate and have shown slightly better numbers for Biden, than polls that use other methodologies, such as polls conducted primarily online or through automated telephone calls. Nevertheless, while the overall picture has shifted only a little in recent days, a few battleground states have seen at least some movement in their polls, which has slightly altered the odds Biden or Trump wins in each of those places.

What election stories need to get more coverage | FiveThirtyEight Politics Podcast

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