Aurelia Butler

(Reuters) – The Social Security Administration has announced plans to begin reopening its vast national network of field offices to the public in January following a 20-month COVID-19 shutdown. The reopening will give the agency a needed opportunity to improve public service, but also presents some thorny challenges.The pandemic forced an abrupt closure by the agency last March of its network of more than 1,200 field offices, which provide assistance on retirement and Medicare claims. The offices also assist on applications for Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), the benefit program for low-income, disabled or older people. In 2019, the offices had 43 million visitors, but since the pandemic began nearly all public service has been available only online, and by phone and mail.Earlier this month, the agency announced tentative plans for employees to return to their office posts on Jan. 3, 2022, with managers reporting to work in December. The agency also will continue to allow telework to varying degrees for different jobs.Social Security describes the phased re-entry as an “evaluation period,” and Mark Hinkle, press officer, said via email that some aspects of the shift still must be determined in negotiations with unions that represent the agency workforce – including the reopening date. The agency also will be “phasing in” its plans to allow walk-in service at the offices, beginning in January, he said. Currently, in office, in-person service is available only by appointment and only for limited, critical issues.Processing of Social Security retirement benefits and Medicare claims has not been impaired during the office shutdown, agency records show. But there was a sharp drop in 2020 in benefit awards for SSI (down 18%) and disability insurance (down 10%).  “The most serious problems are related to the drop in awards for the most vulnerable people,” said David Weaver, a former associate commissioner in Social Security’s Office of Research, Demonstration and Employment Support. “It’s people who might have less ability to get information off the internet, or easy access to information on how to contact the agency. And people seeking SSI and disability may have serious mental impairments or be homeless.”Had benefit awards continued at pre-pandemic levels for SSI and SSDI, 5.5 million more people would be receiving benefits for these two programs, according to Weaver’s calculation. (https:// BUDGET, LEADERSHIP CHALLENGESReopening the field office network presents an opportunity to address the inequities – but also some tough challenges as the agency works to keep employees and the public safe as the pandemic continues.The American Federation of Government Employees, which represents 43,000 employees working across a wide array of agency functions, generally is supportive of reopening. But it is seeking to bargain with the agency over specifics of the reopening plan related to COVID-19 safety.”We are concerned that the plan is vague and full of gaps,” said Rich Couture, president of the AFGE council representing hearings and appeals office personnel and spokesman for a committee made up of six AFGE bargaining councils. “It doesn’t specify what the plan will be for occupancy rates, or how we’ll make sure that waiting rooms don’t get overwhelmed.”Social Security notes that it is following the Centers for Disease Control and Prevention and government-wide guidelines for occupancy and physical distancing. “Our offices will use signage, seating arrangements, floor markings and Plexiglass barriers to assist with distancing and occupancy requirements,” Hinkle said. The agency also is monitoring the Nov. 22 deadline for all federal workers to be vaccinated, and is collecting vaccination information from workers. The vaccine mandate is another issue for some AFGE members, Couture noted. “We have some who are very vocally opposed, some who are vocally in support and others who are silent,” he said. “Our position has been to encourage people to get vaccinated, based on the science, but we want to bargain over all aspects of the mandate and we’ve asked for more flexibility on it.”Social Security also is waiting on a decision by the U.S. Congress to meet the funding needs to serve the public. Congress cut the agency’s budget by 13% in inflation-adjusted terms from 2010 to 2021 – a period when the number of Social Security beneficiaries grew by 22%. The Biden administration requested a 10% increase for the coming fiscal year – a bit less than the agency says it needs to avoid rising backlogs of disability claims, longer wait times for other benefit claimants and also on the toll-free number. Another issue is the lack of a confirmed leader for the Social Security Administration. Andrew Saul, the commissioner appointed by former President Donald Trump, was forced out in July by the Biden administration after a tenure marked by contentious relations with labor at the agency. Since then, the agency has been run by an acting commissioner, Kilolo Kijakazi, a Biden appointee who had been serving as deputy commissioner for retirement and disability policy.The Biden administration has yet to nominate a permanent commissioner, who would need to be confirmed by the U.S. Senate.”It is important that the Biden administration nominates a commissioner and the Senate confirms the nominee,” said Weaver. “That will provide SSA with stable leadership in a difficult operational and budget environment.”If you need to conduct business with Social Security during this transition, the agency advises that you use its website https://www.ssa.gov wherever possible or to call its national toll-free number 1-800-772-1213(1-800-772-1213) as a starting point to receive assistance. More

The bank, which has been under intense scrutiny by German regulators, said offerings for its 500,000 customers in the United States would stop from Jan. 11.It said it would “sharpen its focus on its European business”, and perhaps expand in eastern Europe.Earlier in November, the German financial regulator BaFin ordered N26 to limit the number of customers it takes on to 50,000 a month and appointed a second special representative to monitor the bank.In September, BaFin fined https://www.reuters.com/business/german-watchdog-bafin-orders-n26-pay-5-million-fine-2021-09-28 N26 for lapses in money-laundering controls, following on from orders in May. Before Thursday’s announcement, N26 said it had more than 7 million customers in 25 markets. More

KUALA LUMPUR (Reuters) – The United States’ planned Indo-Pacific economic framework will be inclusive and flexible, and will not be structured like a typical free trade deal, its commerce secretary Gina Raimondo said on Thursday.In a teleconference call during a visit to Malaysia, Raimondo said discussions on the framework are in preliminary stages, but could involve several key areas including the digital economy, supply chain resiliency, infrastructure, export control, and clean energy.”We absolutely do not envision this to be a traditional trade agreement, absolutely do not envision it to require Congress to be involved,” she said, adding that the U.S. will develop the framework with allies in the months to come.On Wednesday, Raimondo said an Indo-Pacific economic framework could be launched at the start of next year https://www.reuters.com/world/asia-pacific/us-commerce-chief-sees-indo-pacific-economic-framework-early-next-year-2021-11-17, and her Asia visit was to lay the groundwork for potential partnerships.Critics of U.S. strategy for the region have pointed to its lack of an economic component after former President Donald Trump withdrew in 2017 from a U.S.-inspired trade deal, now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.Earlier on Thursday, the U.S. and Malaysia said in a joint statement that both countries plan to sign an agreement by early 2022 towards improving transparency, resilience and security in the semiconductor and manufacturing sector supply chains.The agreement comes as Malaysia seeks to tackle a shortage in semiconductor chips after supplies were disrupted due to curbs imposed to stem a surge in COVID-19 cases this year. Malaysia’s chip assembly industry, accounting for more than a tenth of a global trade worth over $20 billion, has warned that shortages will last at least two years.Raimondo said both governments had a broad ranging discussion with the semiconductor industry on Thursday, including to cut out redundancy in investments and to boost supplies. More

Those who have warned that current macroeconomic policies risk permanently higher inflation were tempted to take a victory lap this week. Both the US and the UK published very high inflation numbers: in just one month Britain’s consumer prices index jumped 1.1 per cent, the American CPI by 0.9 per cent and the eurozone harmonised index of consumer prices by 0.7 per cent (the last two both seasonally adjusted). If such price changes were sustained over a year, we would be seeing annualised inflation above 10 per cent.Cue Lawrence Summers calling on “team transitory” to “stand down”, Martin Wolf channelling the 1970s and my Swamp Notes colleagues agreeing that “Summers was right”. The implication of these views is that the US Federal Reserve should rein in its monetary stimulus, a policy conclusion comprehensively set out by Jason Furman in a recent lecture.These are sharp commentators who are well aware of the uncertainty of their judgments. But in the broader, lazier public debate, one can feel an emerging consensus that calling this level of inflation “transitory” has now become a bit ridiculous. The implication is that those who want macroeconomic policy to keep stimulating the economy are guilty of a bad mistake. Continued demand stimulus risks permanently higher inflation or a recession caused by having to raise interest rates much more drastically after leaving it too late.What can team transitory, of which I am a proud member, reply? The honest thing to do is to revisit what we have said in the past, to examine whether current inflation rises prove us wrong. In my case, my most relevant contribution was in April 2020. I wrote then that we should expect a bounce in inflation and that this would be a good thing: “We should not be overly worried by this repressed inflation. To the extent reduced production catches up with sustained demand later on, the inflationary pressures will be eliminated — and it is precisely by sustaining nominal incomes that we stand the best chance of maintaining productive capacity through the crisis. Indeed, we should even hope that when pent-up demand is released from its effective rationing, the demand pressure encourages production above normal capacity, as business and people may be willing to put in extra effort to make up for lost time.Seen in this light, if standard inflation metrics were to accelerate, we should count it as a triumph. It would mean we were not letting demand fall below the economy’s amputated supply capacity; in other words, that we were maximising the chance of a quick recovery once the crisis passes. Conversely, we should be worried if inflation is too low because it would mean we had let demand fall even further than supply.”It may be too soon to claim my triumph, but I certainly do not feel embarrassed by the latest inflation numbers. Nor am I embarrassed by another relevant piece, in which I pointed out that, as of two months ago, inflation was actually falling on both sides of the Atlantic. That remains correct — the October rises follow months of slowing inflation. I wrote then that “inflation could still become unmoored”. But the fact that slowing inflation then did not prevent a rise today should make us appreciate that a one-month increase need not mean inflation could not slow again soon. The reason for thinking it might is what I described in May as the “ketchup-bottle economy”. Many of the obvious causes for the current high inflation — extraordinary fiscal stimulus and bottlenecks in manufacturing supply chains — are very likely to go into reverse. This has not changed. Quite the contrary; the ketchup-bottle argument is strengthened if we note that both bottlenecks and inflation are predominantly taking place in goods production, not services production. (The UK is a bit different, probably because of the trade frictions it decided to place upon itself by leaving the EU.) A new, short article in the Bank for International Settlements Bulletin underlines this point (also read the excellent Twitter thread by BIS head of research Hyun Song Shin). It points out that the pandemic shifted the composition of demand from services to goods, and that goods production is more prone to bottlenecks and the “bullwhip” effect, where producers hoard stock everywhere in the supply chain to avoid shortages. But by the same token, if demand shifts back to services, the opposite mechanisms kick in:“Some price trends could even go into reverse as bottlenecks and precautionary hoarding behaviour wane. The mechanical effect on CPI could well turn disinflationary during this second phase.”Take a look at the magnitudes of this effect in the US. Here is the evolution of personal consumptions expenditure on goods and services.Note two things about this chart. People have been able to keep consumption up — while the chart shows nominal consumption spending, inflation-adjusted personal consumption expenditures are also up by 3.5 per cent since the start of the pandemic. That, by itself, is a policy victory to celebrate in the worst economic disruption in a century. But, second, the shift in consumption towards goods is enormous. The services share of personal consumption expenditures has fallen from 69 to 65 per cent since February 2020. The growth in nominal demand for goods, of about 22 per cent in that period, is much greater than the boost fiscal stimulus gave to the economy as a whole.It is no surprise, then, that prices soar in the goods sector. By extension, inflation is, to a large extent, a product of the shift in demand composition rather than overall demand quantity. Look at the chart below and write to me if you can spot any acceleration in services prices. The entire increase in US inflation is down to goods prices.The single most important question for the inflation debate, then, should be whether demand patterns are going to shift back towards services. There are signs this is beginning to happen: spending on durable goods has fallen by 8 per cent since April. What about policy? Those warning about inflation think holding off on monetary tightening would be a policy mistake. In the spirit of holding ourselves to account, let me share what I wrote to a colleague taking the other side in the inflation debate:“As for me, I’d be happy to admit I was wrong in the following circumstances: a) by early 2023, inflation has been sustainably above 5%; b) the Fed has significantly tightened policy in 2022; c) employment has stagnated and even fallen, with little sign of inflation abating.” That is to say, inflation does not go away by itself and the Fed causes damage by acting too late.The inflation worriers want the Fed to avoid this by tightening pre-emptively now. But let us be clear about what this means. Monetary policy reduces inflationary pressures by reducing the amount of activity in the economy. Hawkish calls amount to recommending that the US economy — still below its pre-pandemic trend and with millions fewer people in work — should have less consumption or investment (or both) than people enjoy at present. To me, that looks like a much worse mistake. It ignores the very likely possibility of ketchup-bottle dynamics. It fails to admit that less consumption and investment means less economic wellbeing. Above all, it seems blind to the fact that high demand is having its desired effect to boost supply. Despite the talk of shortages, people are actually succeeding in consuming significantly more goods than they would have on pre-pandemic trends. The BIS points out that semiconductor exports from east Asia are greater than in 2019. In short, capitalist globalisation is working!Supply is expanding because the demand is there. If producers expect demand to remain hot, they will invest in greater capacity still. If, in contrast, they are taught — again — that as soon as demand outstrips supply, expert policymakers will cut demand back, the incentive to grow disappears. That is the mistake we have been making for the past 30 years. It would be a tragedy to return to it just when learn we can in fact do better.Other readablesThe EU gets ready to take on Big Tech with two big pieces of legislation that may influence regulation worldwide.The least noted but perhaps most consequential achievement of the COP26 climate conference may be the technical work needed for a global carbon market. A special open access issue of the Fiscal Studies journal is devoted to new research about net wealth taxes. Numbers newsRobin Wigglesworth asks whether academic financial economics faces a replication crisis. More

TOKYO (Reuters) -Japan’s supreme court dismissed on Thursday a request to block a plan by Tokyo Kikai Seisakusho Ltd for a “poison pill” takeover defence, in a closely watched ruling with implications for future hostile bids in the country.The decision, Japan’s first on a bid to exclude an investor from a shareholder vote on whether to adopt a poison pill, could make it much easier for other firms to thwart hostile takeovers using a similar strategy.It means Tokyo Kikai can now go ahead with an issue of new shares that would dilute the 40% stake of top shareholder Asia Development Capital (ADC), a step already approved by shareholders in a controversial vote that excluded the firm.”This is the final court judgement over (ADC’s) injunction request,” Tokyo Kikai said in a statement. “We believe this is a totally proper judgement.”Asia Development Capital had sought the injunction on the grounds that shareholder equality was infringed by the actions taken to exclude it, as an “interested party”, from a vote by Tokyo Kikai shareholders on the poison pill strategy.Lower courts concluded that the actions were justified, as the vote was designed to allow other shareholders to judge whether the acquisition would hurt their interests.Governance experts say they are concerned about the implications of the court decision, as it could be interpreted as authorising a board to refuse to count the votes of certain shareholders in some circumstances.The latest decision would “invite reams of litigation” over which shareholders are allowed to vote,” said Stephen Givens, a corporate lawyer based in Tokyo.”Who is an ‘interested’ shareholder in a vote on a poison pill is a question without obvious answers,” he added. On Wednesday, Tokyo Kikai had said it would put its use of the tactic on hold as ADC offered to cut its stake to 32.72%. The manufacturer of newspaper printing presses said it would review ADC’s offer before making an official decision.ADC, which had quickly built up its 40% stake despite warnings from Tokyo Kikai, said in a statement it would ensure other shareholders have enough time and information when it next decides to sharply increase its stake.In Japan, a stake of more than 33% gives the stakeholder veto rights over important board decisions and, sometimes, de facto control. More

A chronic shortage of truck drivers is bedevilling US supply chains, leaving businesses struggling to secure the products they need. But when Matt Schrap visited a truck yard near the twin California seaports of Los Angeles and Long Beach recently, he saw 20 trucks idle. The scene pointed to another factor in the nation’s goods delivery problems: empty shipping containers. As they sit at ports awaiting their return to exporters, many are taking up space on chassis — the specialised trailers that drivers need to pick up full containers arriving from Asia. “It’s really gumming up the works,” said Schrap, head of the Harbor Trucking Association. “Because we can’t pick up these chassis, we’re actually sending guys home.” The empty container problem has become a priority for port operators, ocean carriers and the Biden administration as they work to fix a supply chain stretched by surging consumer demand.Gene Seroka, executive director of the Port of Los Angeles, said this week that 65,000 empty containers were on its docks, up from 55,000 a couple of weeks ago. Data from three large chassis pool operators shows that 90 per cent of all chassis in the ports are now in use, up from 75 per cent in January.At the same time, the number of container ships at anchor outside the Los Angeles and Long Beach ports, in line to unload, hit a new record of 86 this week. The situation was set in motion earlier this year, when containers were stranded in the middle of the country because some truckers did not want to drive empty boxes back to the coasts. More money could be earned carrying full loads, according to supply chain experts. In response, shipping groups began to keep containers close to the docks, exacerbating the pile-up around ports, industry executives said. Caitlin Murphy, chief executive of Global Gateway Logistics, a Missouri-based freight forwarder, said she has had difficulty since May getting cargo moved inland by train from Los Angeles and Long Beach.“Normally, loaded containers should be moving by rail to inland points; they’re no longer doing that,” she said, because the shipping groups which own or lease the boxes “want those containers to be available to go back to Asia”.She urged the Biden administration to focus more on getting rail service running smoothly, as opposed to focusing largely on the seaports. “Cutting off the rail choked the supply chain,” she said.

Keith Winter, chief executive of Crane Worldwide Logistics, another freight forwarder, echoed her concern, saying that ocean carriers had become more conservative about offering slots to move cargo by rail, limiting the usual flow of containers to inland hubs.The shortage of containers in the US interior in turn has affected exporters who would usually load the empty boxes up with goods for international markets, said Michael Farlekas, chief executive of E2open, which produces software for booking ocean freight.More than 80 per cent of the containers exported from the Port of Los Angeles in September were empty, the New York Times reported recently, up from about two-thirds in September 2020 and September 2019.The US used to have more uses for “empty” containers, until exports of recyclable materials to China stopped in 2018, noted Lisa Ellram, professor of supply chain management at Miami University. “This helped the back flow to China,” she added, since the US imports more than it exports.But “chaos” at the ports themselves — which have tens of thousands of importers, thousands of truck drivers, almost 20 different terminal operators and few centralised controls — is part of the problem, she added.Southern California port operators have tried to unblock the staging areas where containers are piling up, announcing in late October that they would introduce surcharges on containers left too long on their facilities, with fines ratcheting up from $100 per container a day.Though the surcharges are not due to go into effect until Monday, Seroka said this week the number of containers that would be subject to them had since dropped by about 29 per cent.Ocean carriers have arranged for six “sweeper ships” to pick up about 17,500 20-foot equivalent units of empty containers, he added, and another two are on the way. Pete Buttigieg, Biden’s transportation secretary, hailed their arrival on Twitter, but Schrap and others say far more will be needed to clear the backlog.Truckers’ biggest challenge is a more bureaucratic one, Schrap said: without an appointment to return an empty container, drivers cannot free up a chassis to pick up a full one. But the terminal operators inside the port complex will not accept empty boxes without knowing that a vessel will be arriving to remove them. The Port of Los Angeles is working to provide incentives for truckers to bring in an empty container each time they pick up a new load, Ellram said. “They have to make it worth their while to put up with more delays,” she said. If it is not fixed fast, Schrap worries that the drivers who make their living shuttling loads in and out of the ports will look for other work. “It’s ridiculous,” he warned: “If they don’t get work here, they’re in high demand. What’s stopping them from going and looking for another driving job?”

Video: WTO director-general says supply chain problems could last months More

The UN has warned that elevated shipping costs resulting from the global supply chain crunch will further fuel inflation around the world and disproportionately hit developing nations’ economies.The surge in freight rates is likely to push up global consumer prices by an additional 1.5 per cent should they remain high for the next year, according to estimates by the United Nations Conference on Trade and Development in a report on Thursday.The pandemic-induced boom in demand for goods, combined with supply chain disruptions from congested ports to the Suez Canal blockage, have caused freight rates to rocket to record highs, reaching about five times their average over the past decade.But import-dependent developing nations are set for a deeper blow from high shipping costs. Consumer prices are expected to rise by an estimated additional 2.2 per cent for the world’s 46 least developed nations and 7.5 per cent for small island developing nations such as Fiji, Mauritius and Jamaica, the report showed.“The impact on prices in developing countries, especially small island developing countries, is five times higher,” said Shamika Sirimanne, director of technology and logistics at Unctad. “This is a real concern.”With prices soaring for everything from steel to energy, central banks are judging whether inflation is likely to settle once supply chain kinks have been ironed out. UK inflation jumped to 4.2 per cent in October, its highest level in almost a decade, increasing pressure on the Bank of England to raise interest rates. In the US, consumer prices rose by 6.2 per cent, their fastest increase since 1990, while eurozone inflation is running at a 13-year high of 4.1 per cent.Jan Hoffmann, chief of trade logistics at Unctad, said that the shipping industry has tended to play down its contribution to inflation. Executives often cite that it only costs a few cents to send a pair of shoes from China or a bottle of wine from Australia to Europe or the US, implying that a multifold jump is relatively insignificant for consumers. But Hoffmann said the vast scale of goods shipped by container made the surge in freight rates relevant to the debate on global inflation.“If we look at the inflation targets in Europe and the US, then 1.5 per cent is significant,” he said.The impact of freight costs on the price paid by the consumer varies significantly depending on the product. Those underpinned by complex global supply chains such as computers, as well as cheaper bulky items including furniture and textiles, are likely to cost at least 10 per cent more as a result of the elevated shipping costs, the report said.Container freight rates have eased in recent weeks because peak season has ended, but remain extremely high. Sea-Intelligence, a maritime consultancy, forecast this week that it could take up to 30 months for rates to return to normal due to the depth of the supply chain crisis.Sirimanne warned that further consolidation of logistics by ocean carriers, which are flush with bumper profits, could make higher shipping prices “stickier”.She urged governments to support Covid-19 vaccination efforts in developing nations to help ease supply chain and pricing pressures. More

The US trade ambassador has admitted that America needs to make a “course correction” in the Asia-Pacific region, as Washington attempts to re-establish its economic superpower credentials following its withdrawal from a trade pact under Donald Trump.Katherine Tai, the US trade representative, was asked directly by Japan’s foreign minister during her visit to Tokyo to lead the US back into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the successor to the Trans-Pacific Partnership (TPP).But in an exclusive interview with the Financial Times on Thursday, Tai set out the ways in which the US planned to strengthen relations with partners without joining the regional pact. She argued that there were other structures that were better placed to address challenges than a trade deal negotiated more than eight years ago. Tai said that a focus of her visit, which comes amid a phase of greater Chinese assertiveness, had been to impress upon partners such as Japan the “durability” of US trade policies. “The goal of this is to accomplish a course correction,” she said when asked if she was redressing a credibility deficit in the Asia-Pacific region. She added that for US allies in the region, there was an obligation to offer “a durability for our trade policies that will enjoy a broad base of support politically”. Tai added that there was “a real opportunity for collaboration between the United States and our partners here on challenges that we face together from China’s non-market policies and industrial policies”.Joe Biden, the US president, has tried to strengthen his country’s relationships with allies in Asia in a bid to counter China’s rising economic and military might.During her visit, Tai agreed on a new bilateral trade partnership with Japan and agreed to renew a trilateral pact between the US, Japan and Europe. Few details of the deal were revealed by either side, which people close to both governments believe was a symptom of US political sensitivities surrounding trade. Even if the Biden administration thought there was no better option than joining the CPTPP, analysts said, domestic pressures meant it could not pursue regional trade pacts. Japanese trade officials said that the emphasis of Tai’s visit appeared to have been on drawing a clear line under the Trump era. The Japanese side said that the new bilateral framework represented a US response to Tokyo’s calls for greater US involvement in the Indo-Pacific region.Tai, meanwhile, described the partnership as a platform to address issues, such as the post-Covid recovery and climate crisis, that did not fall under the scope of existing regional trade agreements.

“There really is so much for us to work on and talk about. The challenges in the global economy are coming at us fast and furiously. And there’s no time to waste. And I think these structures are going to be incredibly valuable to us in strengthening our relationship,” she said.Tai’s tour, which includes stops in South Korea and India, takes place almost four years after the US abruptly pulled out of the TPP even though it had played a central role in its creation. In the wake of its collapse, the TPP was replaced with the CPTPP, which has now attracted applications from both China and Taiwan. Tai said that the global and regional situation — in particular relating to the environment and post-Covid recovery — was now very different from when the original 12-member partnership had been negotiated over eight years ago. “In this moment when we are all still struggling to accomplish really robust economic recoveries, and trying [to come] out of the pandemic . . . those are the issues that are most pressing, and most relevant to our partnership and our commitment to the region,” she said.Tai’s comments coincided with mounting concerns over the robustness of supply chains, resource security and whether the combination of those issues would accelerate a “decoupling” of China and other economies in the Asia-Pacific region. More