Could This Covid Wave Reverse the Recovery? Here’s What to Watch.

The spread of the Delta variant has delayed office reopenings, disrupted the start of school and generally dashed hopes for a return to normal after Labor Day. But it has not pushed the U.S. economic recovery into reverse.

Now that recovery faces a new test: the removal of much of the aid that has helped keep households and businesses afloat for the past year and a half.

The Paycheck Protection Program, which distributed hundreds of billions of dollars in grants and loans to thousands of small businesses, concluded last spring. A federal eviction moratorium ended last month after the Supreme Court blocked the Biden administration’s last-minute effort to extend it. Most recently, an estimated 7.5 million people lost unemployment benefits when programs that expanded the system during the pandemic were allowed to lapse.

Next up: the Federal Reserve, which on Wednesday indicated it could start pulling back its stimulus efforts as early as November.

OpenTable, for example, have fallen less than 10 percent from their early-July peak. That is a far smaller decline than during the last Covid surge, last winter.

“It has moved down, but it’s not the same sort of decline,” Mr. Bryson said of the OpenTable data. “We’re living with it.”

$120 billion in monthly bond purchases — which have kept borrowing cheap and money flowing through the economy — but it will almost certainly keep interest rates near zero into next year. Millions of parents will continue to receive monthly checks through the end of the year because of the expanded child tax credit passed in March as part of President Biden’s $1.9 trillion aid package.

That bill, known as the American Rescue Plan, also provided $350 billion to state and local governments, $21.6 billion in rental aid and $10 billion in mortgage assistance, among other programs. But much has not been spent, said Wendy Edelberg, director of the Hamilton Project, an economic-policy arm of the Brookings Institution.

“Those delays are frustrating,” she said. “At the same time, what that also means is that support is going to continue having an effect over the next several quarters.”

Economists, including officials in the Biden administration, say that as the economy heals, there will be a gradual “handoff” from government aid to the private sector. That transition could be eased by a record-setting pile of household savings, which could help prop up consumer spending as government aid wanes.

A lot of that money is held by richer, white-collar workers who held on to their jobs and saw their stock portfolios swell even as the pandemic constrained their spending. But many lower-income households have built up at least a small savings cushion during the pandemic because of stimulus checks, enhanced unemployment benefits and other aid, according to researchers at the JPMorgan Chase Institute.

“The good news is that people are going into the fall with some reserves, more reserves than normal,” said Fiona Greig, co-director of the institute. “That can give them some runway in which to look for a job.”

recent survey by Alignable, a social network for small business owners. Not all have had sales turn lower, said Eric Groves, the company’s chief executive. But the uncertainty is hitting at a crucial moment, heading into the holiday season.

“This is a time of year when business owners in the consumer sector in particular are trying to pull out their crystal ball,” he said. “Now is when they have to be purchasing inventory and doing all that planning.”

open a new location as part of a development project on the West Side of Manhattan.

Go big. If some aid ended up going to people or businesses that didn’t really need help, that was a reasonable trade-off for the benefit of getting money to the millions who did.

Today, the calculus is different. The impact of the pandemic is more tightly focused on a few industries and groups. At the same time, many businesses are having trouble getting workers and materials to meet existing demand. Traditional forms of stimulus that seek to stoke demand won’t help them. If automakers can’t get needed parts, for example, giving money to households won’t lead to more car sales — but it might lead to higher prices.

That puts policymakers in a tight spot. If they don’t get help to those who are struggling, it could cause individual hardship and weaken the recovery. But indiscriminate spending could worsen supply problems and lead to inflation. That calls for a more targeted approach, focusing on the specific groups and industries that need it most, said Nela Richardson, chief economist for ADP, the payroll processing firm.

“There are a lot of arrows in the quiver still, but you need them to go into the bull’s-eye now rather than just going all over,” Ms. Richardson said.

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Federal Reserve Signals a Shift Away From Pandemic Support

Federal Reserve officials indicated on Wednesday that they expect to soon slow the asset purchases they have been using to support the economy and predicted they might raise interest rates next year, sending a clear signal that policymakers are preparing to curtail full-blast monetary help as the business environment snaps back from the pandemic shock.

Jerome H. Powell, the Fed’s chair, said during a news conference that the central bank’s bond purchases, which have propped up the economy since the depths of the pandemic downturn, “still have a use, but it’s time for us to begin to taper them.”

That unusual candor came for a reason: Fed officials have been trying to fully prepare markets for their first move away from enormous economic support. Policymakers could announce a slowdown to their monthly government-backed securities purchases as soon as November, the Fed’s next meeting, and the program may come to a complete end by the middle of next year, Mr. Powell later said. He added that there was “very broad support” on the policy-setting Federal Open Market Committee for such a plan.

Nearly 20 months after the coronavirus pandemic first shook America, the Fed is trying to guide an economy in which business has rebounded as consumers spend strongly, helped along by repeated government stimulus checks and other benefits.

markets on edge. In the United States, partisan wrangling could imperil future government spending plans or even cause a destabilizing delay to a needed debt ceiling increase.

Mr. Powell and his colleagues are navigating those crosscurrents at a time when inflation is high and the labor market, while healing, remains far from full strength. They are weighing when and how to reduce their monetary policy support, hoping to prevent economic or financial market overheating while keeping the recovery on track.

“They want to start the exit,” said Priya Misra, global head of rates strategy at T.D. Securities. “They’re putting the markets on notice.”

Investors took the latest update in stride. The S&P 500 ended up 1 percent for the day, slightly higher than it was before the Fed’s policy statement was released, and yields on government bonds ticked lower, suggesting that investors didn’t see a reason to radically change their expectations for interest rates.

The Fed has been holding its policy rate at rock bottom since March 2020 and is buying $120 billion in government-backed bonds each month, policies that work together to keep many types of borrowing cheap. The combination has fueled lending and spending and helped to foster stronger economic growth, while also contributing to record highs in the stock market.

fresh set of economic projections on Wednesday, laying out their predictions for growth, inflation and the funds rate through the end of 2024. Those included the “dot plot” — a set of anonymous individual estimates showing where each of the Fed’s 18 policymakers expect their interest rate to fall at the end of each year.

last released in June. This was the first time the Fed has released 2024 projections, and officials expected rates to stand at 1.8 percent at the end of that year.

sharply higher in recent months, elevated by supply-chain disruptions and other quirks tied to the pandemic. The Fed’s preferred metric, the personal consumption expenditures index, climbed 4.2 percent in July from a year earlier.

Fed officials expected inflation to average 4.2 percent in the final quarter of 2021 before falling to 2.2 percent in 2022, the new forecasts showed.

Central bankers are trying to predict how inflation will evolve in the coming months and years. Some officials worry that it will remain elevated, fueled by strong consumption and newfound corporate pricing power as consumers come to expect and accept higher costs.

Others fret that the same factors pushing prices higher today will lead to uncomfortably low inflation down the road — for instance, used car prices have contributed heavily to the 2021 increase and could fall as demand wanes. Tepid price increases prevailed before the pandemic started, and the same global trends that had been weighing inflation down could once again dominate.

“Inflation expectations are terribly important, we spend a lot of time watching them, and if we did see them moving up in a troubling way” then “we would certainly react to that,” Mr. Powell said. “We don’t really see that now.”

The Fed’s second goal — full employment — also remains elusive. Millions of jobs remain missing compared with before the pandemic, even after months of historically rapid employment gains. Officials want to avoid lifting interest rates to cool off the economy before the labor market has fully healed. It’s difficult to know when that might be, because the economy has never recovered from pandemic-induced lockdowns before.

“The process of reopening the economy is unprecedented, as was the shutdown at the onset of the pandemic,” Mr. Powell said on Wednesday.

Given those uncertainties, the Fed is likely to move cautiously on raising interest rates. And while Mr. Powell teed up a possible November announcement that the Fed would start slowing its bond-buying, even that is subject to change if the economy does not shape up as expected — or if major risks on the horizon materialize.

“The start of tapering would be delayed if the debt ceiling standoff is unresolved and markets are in turmoil,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note following the meeting.

Yet Mr. Powell made clear that the Fed was not equipped to ride to the rescue if lawmakers could not resolve their differences.

“It’s just very important that the debt ceiling be raised in a timely fashion,” Mr. Powell said, adding that “no one should assume the Fed or anyone else can protect markets and the economy in the event of a failure” to “make sure that we do pay those, when they’re due.”

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Pentair Announces Quarterly Cash Dividend

LONDON–(BUSINESS WIRE)–Pentair plc (NYSE: PNR) announced today that it will pay a regular quarterly cash dividend of $0.20 per share on November 5, 2021 to shareholders of record at the close of business on October 22, 2021. 2021 marks the 45th consecutive year that Pentair has increased its dividend.

ABOUT PENTAIR PLC

Pentair makes the most of life’s essential resources. From our residential and business solutions that help people move, improve and enjoy their water, to our sustainable innovations and applications, we deliver smart, sustainable solutions for life.

Pentair had revenue in 2020 of $3 billion, and trades under the ticker symbol PNR. With approximately 9,750 global employees serving customers in more than 150 countries, we work to help improve lives and the environment around the world. To learn more, visit Pentair.com.

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Canada Election 2021: Justin Trudeau Projected to Remain Prime Minister

OTTAWA — Prime Minister Justin Trudeau’s political gamble failed to pay off Monday when Canadian voters returned him to office but denied him the expanded bloc of power he was seeking in Parliament.

Election returns late on Monday showed that while he would remain prime minister, it will again be as the head of a minority government, Canadian broadcasters projected.

In August, with his approval ratings high, Mr. Trudeau called a “snap election,” summoning voters to the polls two years before he had to. The goal, he said, was to obtain a strong mandate for his Liberal Party to lead the nation out of the pandemic and into recovery.

But many Canadians suspected that his true ambitions were mere political opportunism, and that he was trying to regain the parliamentary majority the Liberals had until they lost seats in the 2019 election.

Mr. O’Toole, seeking to broaden Conservatives’ appeal, produced a 160-page campaign platform that essentially turned the party’s back on many once-central positions, like opposition to carbon taxes.

Mr. Trudeau broke ethics laws when he and his staff pressured his justice minister, an Indigenous woman, in 2018 to offer a large Canadian engineering firm a deal allowing it to avoid a criminal conviction on corruption charges. Last year a charity with close ties to the Trudeau family was awarded a no-bid contract to administer a Covid-19 financial assistance plan for students. The group withdrew, the program was canceled and Mr. Trudeau was cleared of conflict of interest allegations.

And while Mr. Trudeau champions diversity and racial justice, it came out during the 2019 vote that he had worn blackface or brownface at least three times in the past.

“Every Canadian has met a Justin Trudeau in their lives — privileged, entitled and always looking out for No. 1,” Mr. O’Toole said during the campaign. “He’ll say anything to get elected, regardless of the damage it does to our country.”

Mr. Trudeau returned the criticism, saying Mr. O’Toole’s willingness to ditch Conservative policies and alter his platform mid-campaign showed it was he who would say or promise anything to voters.

While many voters eagerly bumped elbows and posed for selfies with Mr. Trudeau at campaign stops, his campaign was often disturbed by unruly mobs protesting mandatory vaccines and vaccine passports. One event was canceled out of safety concerns, and Mr. Trudeau was pelted with gravel at another.

Mr. Trudeau did have a strong political challenger on the left nationally with Jagmeet Singh of the New Democrats. Mr. Singh, a lawyer and former provincial lawmaker from Ontario, consistently had the highest approval ratings of all the leaders before and during the campaign. But personal popularity was not enough: His party gained three seats but won only a total of 27.

As before the election, the New Democrats are likely to be Mr. Trudeau’s primary source of support in Parliament.

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Global Markets Swoon as Worries Mount Over Superpowers’ Plans

Investors on three continents dumped stocks on Monday, fretting that the governments of the world’s two largest economies — China and the United States — would act in ways that could undercut the nascent global economic recovery.

The Chinese government’s reluctance to step in and save a highly indebted property developer just days before a big interest payment is due signaled to investors that Beijing might break with its longstanding policy of bailing out its homegrown stars.

And in the United States, the globe’s No. 1 economy, investors worried that the Federal Reserve would soon begin cutting back its huge purchases of government bonds, which had helped drive stocks to a series of record highs since the coronavirus pandemic hit.

The sell-off started in Asia and spread to Europe — where exporters to China were slammed — before landing in the United States, where stocks appeared to be heading for their worst performance of the year before a rally at the end of the trading day. The S&P 500 closed down 1.7 percent, its worst daily performance since mid-May, after being down as much as 2.9 percent in the afternoon.

to ignore a variety of issues complicating the recovery — including the emergence of the Delta variant and the supply chain snarls that have bedeviled consumers and manufacturers alike.

But beginning this month, as Evergrande began to teeter and the likelihood of the Fed’s scaling back — or tapering — its bond-buying programs grew, the market’s protective bubble began to deflate. Some U.S. investors are also concerned that tax increases are in the offing — including on share buybacks and corporate profits — to help pay for a spending push by the federal government, the signature piece of which is President Biden’s proposed $3.5 trillion budget bill. Separately, Congress also must act to raise the government’s borrowing limit, a politically charged process that has at times thrown markets for a loop.

On Monday, those currents combined, reflecting the interconnectedness of the global markets as investors everywhere sold their holdings.

the rancorous debate about increasing the debt limit was accompanied by a sharp market slump, as representatives in Washington appeared to flirt with the idea of not raising the constraint on borrowing, which would effectively amount to a default on Treasury bonds.

“It’s going to be drama for the sake of politics,” said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management. “People don’t like that.”

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Why Louisiana’s Electric Grid Failed in Hurricane Ida

Just weeks before Hurricane Ida knocked out power to much of Louisiana, leaving its residents exposed to extreme heat and humidity, the chief executive of Entergy, the state’s biggest utility company, told Wall Street that it had been upgrading power lines and equipment to withstand big storms.

“Building greater resiliency into our system is an ongoing focus,” the executive, Leo P. Denault, told financial analysts on a conference call on Aug. 4, adding that Entergy was replacing its towers and poles with equipment “able to handle higher wind loading and flood levels.”

Mr. Denault’s statements would soon be tested harshly. On the last Sunday in August, Hurricane Ida made landfall in Louisiana and dealt a catastrophic blow to Entergy’s power lines, towers and poles, many of which were built decades ago to withstand much weaker hurricanes. The company had not upgraded or replaced a lot of that equipment with more modern gear designed to survive the 150 mile-an-hour wind gusts that Ida brought to bear on the state.

A hurricane like Ida would have been a challenge to any power system built over many decades that contains a mix of dated and new equipment. But some energy experts said Entergy was clearly unprepared for the Category 4 storm despite what executives have said about efforts to strengthen its network.

a Category 2 storm, according to an analysis of regulatory filing and other company records by McCullough Research, a consulting firm based in Portland, Ore., that advises power companies and government agencies.

Entergy said that analysis was inaccurate but wouldn’t say how many of its transmission structures were built to withstand 150 mile-per-hour winds. The company has said that its towers met the safety standards in place at the time of installation but older standards often assumed wind speeds well below 150 m.p.h.

The Institute of Electrical and Electronics Engineers, a professional group whose guidelines are widely followed by utilities and other industries, recommends that power companies that operate in areas vulnerable to hurricanes install equipment that can withstand major storms and return service quickly when systems fail. In coastal areas of Louisiana, for example, it says large transmission equipment should be designed to withstand winds of 150 m.p.h.

growing ferocity of hurricanes. The company says it had acted with alacrity. Its critics contend that it dragged its feet.

to restart a $210 million natural gas-fired plant the company opened in New Orleans last year that it said would provide power during periods of high demand, including after storms. But energy experts say it is a lot more concerning that so many of the company’s lines went down — and did so for the second year in a row.

Last year, Hurricane Laura, a Category 4 storm, destroyed and damaged hundreds of Entergy’s towers and poles in Southwestern Louisiana. In April, Entergy told the Louisiana Public Service Commission, which regulates its operations outside New Orleans, that the company had strengthened its equipment, including the installation of stronger distribution poles in coastal areas particularly vulnerable to high winds.

Michelle P. Bourg, who is responsible for transmission at Entergy’s Louisiana operations, told regulators that because it was too expensive to make the entire network resilient, Entergy pursued “targeted programs that cost effectively reduce the risks to reliability.”

In a statement, Entergy said its spending on transmission was working, noting that Ida destroyed or damaged 508 transmission structures, compared with 1,909 during Laura and 1,003 in Katrina. The company added that its annual investment in transmission in Louisiana and New Orleans has increased over the last eight years and totaled $926 million in 2020, when it spent extensively on repairs after Laura. The company spent $471 million on transmission in 2019.

“The facts of this storm support that we have made substantial progress in terms of resiliency since the storms that hit our system in the early 2000s — both generally and with respect to transmission in particular,” said Jerry Nappi, an Entergy spokesman.

The company declined to provide the age of damaged or destroyed transmission structures and an age range for the damaged distribution poles and equipment. Mr. Nappi acknowledged that distribution poles suffered widespread destruction and were not built to withstand winds of 130 to 150 m.p.h.

“Substantial additional investment will be required to mitigate hardship and avoid lengthy outages as increasingly powerful storms hit with increasing frequency,” he said in an email. “We are pursuing much-needed federal support for the additional hardening needed without compromising the affordability of electricity on which our customers and communities depend.”

The company’s plea for more help comes as President Biden is pushing to upgrade and expand the nation’s electricity system to address climate change as well as to harden equipment against disasters. Part of his plan includes spending tens of billions of dollars on transmission lines. Mr. Biden also wants to provide incentives for clean energy sources like solar and wind power and batteries — the kinds of improvements that community leaders in New Orleans had sought for years and that Entergy has often pushed back on.

Susan Guidry, a former member of the New Orleans City Council, said she opposed the construction of the new natural gas plant, which was located in a low-lying area near neighborhoods made up mostly of African Americans and Vietnamese Americans. Instead, she pushed for upgrades to the transmission and distribution system and more investment in solar power and batteries. The council ultimately approved Entergy’s plans for the plant over her objections.

“One of the things we argued about was that they should be upgrading transmission lines rather than building a peaking plant,” Ms. Guidry said.

In addition, she said, she called for the company to replace the wooden poles in neighborhoods with those built with stronger materials.

Robert McCullough, principal of McCullough Research, said it was hard to understand why Entergy had not upgraded towers and poles more quickly.

“Wood poles no longer have the expected lifetime in the face of climate change,” he said. “Given the repeated failures, it is going to be cost-effective to replace them with more durable options that can survive repeated Category 4 storms — including going to metal poles in many circumstances.”

Had Entergy invested more in its transmission and distribution lines and solar panels and battery systems, some green energy activists argued, the city and state would not have suffered as widespread and as long a power outage as it did after Ida.

“Entergy Louisiana needs to be held accountable for this,” said one of those activists, Logan Atkinson Burke, executive director of the Alliance for Affordable Clean Energy.

Entergy has argued that the natural gas plant was a much more affordable and reliable option for providing electricity during periods of high demand than solar panels and batteries.

Jennifer Granholm, Mr. Biden’s energy secretary, said that Ida highlighted the need for a big investment in electric grids. That might include putting more power lines serving homes and businesses under ground. Burying wires would protect them from winds, though it could make it harder to access the lines during floods.

“Clearly, as New Orleans builds back, it really does have to build back better in some areas,” Ms. Granholm said in an interview this month.

Mr. Nappi, the Entergy spokesman, said that distribution lines in some parts of New Orleans and elsewhere are already underground but that burying more of them would be expensive. “Distribution assets can be made to withstand extreme winds, through engineering or under grounding, but at significant cost and disruption to customers and to the community,” he said.

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The Battle for Digital Privacy Is Reshaping the Internet

“The internet is answering a question that it’s been wrestling with for decades, which is: How is the internet going to pay for itself?” he said.

The fallout may hurt brands that relied on targeted ads to get people to buy their goods. It may also initially hurt tech giants like Facebook — but not for long. Instead, businesses that can no longer track people but still need to advertise are likely to spend more with the largest tech platforms, which still have the most data on consumers.

David Cohen, chief executive of the Interactive Advertising Bureau, a trade group, said the changes would continue to “drive money and attention to Google, Facebook, Twitter.”

The shifts are complicated by Google’s and Apple’s opposing views on how much ad tracking should be dialed back. Apple wants its customers, who pay a premium for its iPhones, to have the right to block tracking entirely. But Google executives have suggested that Apple has turned privacy into a privilege for those who can afford its products.

For many people, that means the internet may start looking different depending on the products they use. On Apple gadgets, ads may be only somewhat relevant to a person’s interests, compared with highly targeted promotions inside Google’s web. Website creators may eventually choose sides, so some sites that work well in Google’s browser might not even load in Apple’s browser, said Brendan Eich, a founder of Brave, the private web browser.

“It will be a tale of two internets,” he said.

Businesses that do not keep up with the changes risk getting run over. Increasingly, media publishers and even apps that show the weather are charging subscription fees, in the same way that Netflix levies a monthly fee for video streaming. Some e-commerce sites are considering raising product prices to keep their revenues up.

Consider Seven Sisters Scones, a mail-order pastry shop in Johns Creek, Ga., which relies on Facebook ads to promote its items. Nate Martin, who leads the bakery’s digital marketing, said that after Apple blocked some ad tracking, its digital marketing campaigns on Facebook became less effective. Because Facebook could no longer get as much data on which customers like baked goods, it was harder for the store to find interested buyers online.

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A Million Afghan Children Could Die in ‘Most Perilous Hour,’ U.N. Warns

Millions of Afghans could run out of food before the arrival of winter and one million children are at risk of starvation and death if their immediate needs are not met, top United Nations officials warned on Monday, putting the country’s plight into stark relief.

Secretary General António Guterres, speaking at a high-level U.N. conference in Geneva convened to address the crisis, said that since the Taliban takeover in Afghanistan last month, the nation’s poverty rate has soared and basic public services have neared collapse and, in the past year, hundreds of thousands of people have been made homeless after being forced to flee fighting.

“After decades of war, suffering and insecurity, they face perhaps their most perilous hour,” Mr. Guterres said, adding that one in three Afghans do not know where they will get their next meal.

The deepening humanitarian crisis tops a dizzying array of challenges confronting the new Taliban regime as it navigates governing a country propped up for decades by aid from international donors.

face potential collapse. At a local hospital in Chak-e Wardak, administrators have been unable to pay salaries or purchase new medicines with banks still closed, according to Faridullah, the facility’s resident doctor.

as drought enveloped the nation.

On Monday, in his first public remarks to Congress, Secretary of State Antony J. Blinken defended the Biden administration’s withdrawal from Afghanistan, saying there was no reason to believe the country would have stabilized had the United States remained.

“There’s no evidence that staying longer would have made the Afghan security forces or the Afghan government any more resilient or self-sustaining,” Mr. Blinken told the House Foreign Affairs Committee, in a live teleconference call. “If 20 years and hundreds of billions of dollars in support, equipment, and training did not suffice, why would another year, or five, or 10, make a difference?”

international aid workers having fled the country out of safety concerns. Those who remain are unsure if they will be able to continue their work.

During the conference on Monday, the U.N. said it needed $606 million in emergency funding to address the immediate crisis, while acknowledging that money alone will not be enough. The organization has pressed the Taliban to provide assurances that aid workers can go about their business safely. By the end of the gathering, international pledges had surpassed the amount requested.

But even as the Taliban sought to make that pledge, the U.N.’s human rights chief, Michelle Bachelet, also speaking in Geneva, said Afghanistan was in a “new and perilous phase” since the militant Islamist group seized power.

“In contradiction to assurances that the Taliban would uphold women’s rights, over the past three weeks, women have instead been progressively excluded from the public sphere,” she said, a warning that the Taliban would need to use more than words to demonstrate their commitment to aid workers’ safety.

Monday’s conference was also intended to drive home the enormousness of the crisis and offer some reassurance to Western governments hesitant to provide assistance that could legitimize the authority of a Taliban government that includes leaders identified by the U.N. as international terrorists with links to Al Qaeda.

their origin story and their record as rulers.

On Sunday, Taliban authorities sent assurances that they would facilitate humanitarian aid deliveries by road, he said.

some $12 billion in assistance to Afghanistan over four years.

While the Taliban did not have a representative in Geneva for the meeting, Zabihullah Mujahid, the Taliban’s deputy information and culture minister, said the government welcomed all humanitarian efforts by any nation, including the United States.

He also acknowledged that not even the Taliban expected to be in control of the country so quickly.

“It was a surprise for us how the former administration abandoned the government,” he said. “We were not fully prepared for that and are still trying to figure things out to manage the crisis and try to help people in any way possible.”

More than half a million Afghans were driven from their homes by fighting and insecurity this year, bringing the total number of people displaced within the country to 3.5 million, Filippo Grandi, the U.N. refugee chief said.

The danger of economic collapse raised the possibility of stoking an outflow of refugees to neighboring countries.

Said, 33, lived in Kunduz before fleeing to Kabul, where he now lives in a tent in a park. He has been there with his wife and three children for a month.

“It’s cold here, we have no food, no shelter, and we can’t find a job in this city,” he said, adding that he had not received any aid. “We all have children and they need food and shelter, and it’s not easy to live here.”

Jim Huylebroek contributed reporting from Chak-e Wardak, Afghanistan. Sami Sahak also contributed reporting.

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Phony Diagnoses Hide High Rates of Drugging at Nursing Homes

The handwritten doctor’s order was just eight words long, but it solved a problem for Dundee Manor, a nursing home in rural South Carolina struggling to handle a new resident with severe dementia.

David Blakeney, 63, was restless and agitated. The home’s doctor wanted him on an antipsychotic medication called Haldol, a powerful sedative.

“Add Dx of schizophrenia for use of Haldol,” read the doctor’s order, using the medical shorthand for “diagnosis.”

But there was no evidence that Mr. Blakeney actually had schizophrenia.

Antipsychotic drugs — which for decades have faced criticism as “chemical straitjackets” — are dangerous for older people with dementia, nearly doubling their chance of death from heart problems, infections, falls and other ailments. But understaffed nursing homes have often used the sedatives so they don’t have to hire more staff to handle residents.

one in 150 people.

Schizophrenia, which often causes delusions, hallucinations and dampened emotions, is almost always diagnosed before the age of 40.

“People don’t just wake up with schizophrenia when they are elderly,” said Dr. Michael Wasserman, a geriatrician and former nursing home executive who has become a critic of the industry. “It’s used to skirt the rules.”

refuge of last resort for people with the disorder, after large psychiatric hospitals closed decades ago.

But unfounded diagnoses are also driving the increase. In May, a report by a federal oversight agency said nearly one-third of long-term nursing home residents with schizophrenia diagnoses in 2018 had no Medicare record of being treated for the condition.

hide serious problems — like inadequate staffing and haphazard care — from government audits and inspectors.

One result of the inaccurate diagnoses is that the government is understating how many of the country’s 1.1 million nursing home residents are on antipsychotic medications.

According to Medicare’s web page that tracks the effort to reduce the use of antipsychotics, fewer than 15 percent of nursing home residents are on such medications. But that figure excludes patients with schizophrenia diagnoses.

To determine the full number of residents being drugged nationally and at specific homes, The Times obtained unfiltered data that was posted on another, little-known Medicare web page, as well as facility-by-facility data that a patient advocacy group got from Medicare via an open records request and shared with The Times.

The figures showed that at least 21 percent of nursing home residents — about 225,000 people — are on antipsychotics.

The Centers for Medicare and Medicaid Services, which oversees nursing homes, is “concerned about this practice as a way to circumvent the protections these regulations afford,” said Catherine Howden, a spokeswoman for the agency, which is known as C.M.S.

“It is unacceptable for a facility to inappropriately classify a resident’s diagnosis to improve their performance measures,” she said. “We will continue to identify facilities which do so and hold them accountable.”

significant drop since 2012 in the share of residents on the drugs.

But when residents with diagnoses like schizophrenia are included, the decline is less than half what the government and industry claim. And when the pandemic hit in 2020, the trend reversed and antipsychotic drug use increased.

For decades, nursing homes have been using drugs to control dementia patients. For nearly as long, there have been calls for reform.

In 1987, President Ronald Reagan signed a law banning the use of drugs that serve the interest of the nursing home or its staff, not the patient.

But the practice persisted. In the early 2000s, studies found that antipsychotic drugs like Seroquel, Zyprexa and Abilify made older people drowsy and more likely to fall. The drugs were also linked to heart problems in people with dementia. More than a dozen clinical trials concluded that the drugs nearly doubled the risk of death for older dementia patients.

11 percent from less than 7 percent, records show.

The diagnoses rose even as nursing homes reported a decline in behaviors associated with the disorder. The number of residents experiencing delusions, for example, fell to 4 percent from 6 percent.

Caring for dementia patients is time- and labor-intensive. Workers need to be trained to handle challenging behaviors like wandering and aggression. But many nursing homes are chronically understaffed and do not pay enough to retain employees, especially the nursing assistants who provide the bulk of residents’ daily care.

Studies have found that the worse a home’s staffing situation, the greater its use of antipsychotic drugs. That suggests that some homes are using the powerful drugs to subdue patients and avoid having to hire extra staff. (Homes with staffing shortages are also the most likely to understate the number of residents on antipsychotics, according to the Times’s analysis of Medicare data.)

more than 200,000 since early last year and is at its lowest level since 1994.

As staffing dropped, the use of antipsychotics rose.

Even some of the country’s leading experts on elder care have been taken aback by the frequency of false diagnoses and the overuse of antipsychotics.

Barbara Coulter Edwards, a senior Medicaid official in the Obama administration, said she had discovered that her father was given an incorrect diagnosis of psychosis in the nursing home where he lived even though he had dementia.

“I just was shocked,” Ms. Edwards said. “And the first thing that flashed through my head was this covers a lot of ills for this nursing home if they want to give him drugs.”

Homes that violate the rules face few consequences.

In 2019 and 2021, Medicare said it planned to conduct targeted inspections to examine the issue of false schizophrenia diagnoses, but those plans were repeatedly put on hold because of the pandemic.

In an analysis of government inspection reports, The Times found about 5,600 instances of inspectors citing nursing homes for misusing antipsychotic medications. Nursing home officials told inspectors that they were dispensing the powerful drugs to frail patients for reasons that ranged from “health maintenance” to efforts to deal with residents who were “whining” or “asking for help.”

a state inspector cited Hialeah Shores for giving a false schizophrenia diagnosis to a woman. She was so heavily dosed with antipsychotics that the inspector was unable to rouse her on three consecutive days.

There was no evidence that the woman had been experiencing the delusions common in people with schizophrenia, the inspector found. Instead, staff at the nursing home said she had been “resistive and noncooperative with care.”

Dr. Jonathan Evans, a medical director for nursing homes in Virginia who reviewed the inspector’s findings for The Times, described the woman’s fear and resistance as “classic dementia behavior.”

“This wasn’t five-star care,” said Dr. Evans, who previously was president of a group that represents medical staff in nursing homes. He said he was alarmed that the inspector had decided the violation caused only “minimal harm or potential for harm” to the patient, despite her heavy sedation. As a result, he said, “there’s nothing about this that would deter this facility from doing this again.”

Representatives of Hialeah Shores declined to comment.

Seven of the 52 homes on the inspector general’s list were owned by a large Texas company, Daybreak Venture. At four of those homes, the official rate of antipsychotic drug use for long-term residents was zero, while the actual rate was much higher, according to the Times analysis comparing official C.M.S. figures with unpublished data obtained by the California advocacy group.

make people drowsy and increases the risk of falls. Peer-reviewed studies have shown that it does not help with dementia, and the government has not approved it for that use.

But prescriptions of Depakote and similar anti-seizure drugs have accelerated since the government started publicly reporting nursing homes’ use of antipsychotics.

Between 2015 and 2018, the most recent data available, the use of anti-seizure drugs rose 15 percent in nursing home residents with dementia, according to an analysis of Medicare insurance claims that researchers at the University of Michigan prepared for The Times.

in a “sprinkle” form that makes it easy to slip into food undetected.

“It’s a drug that’s tailor-made to chemically restrain residents without anybody knowing,” he said.

In the early 2000s, Depakote’s manufacturer, Abbott Laboratories, began falsely pitching the drug to nursing homes as a way to sidestep the 1987 law prohibiting facilities from using drugs as “chemical restraints,” according to a federal whistle-blower lawsuit filed by a former Abbott saleswoman.

According to the lawsuit, Abbott’s representatives told pharmacists and nurses that Depakote would “fly under the radar screen” of federal regulations.

Abbott settled the lawsuit in 2012, agreeing to pay the government $1.5 billion to resolve allegations that it had improperly marketed the drugs, including to nursing homes.

Nursing homes are required to report to federal regulators how many of their patients take a wide variety of psychotropic drugs — not just antipsychotics but also anti-anxiety medications, antidepressants and sleeping pills. But homes do not have to report Depakote or similar drugs to the federal government.

“It is like an arrow pointing to that class of medications, like ‘Use us, use us!’” Dr. Maust said. “No one is keeping track of this.”

published a brochure titled “Nursing Homes: Times have changed.”

“Nursing homes have replaced restraints and antipsychotic medications with robust activity programs, religious services, social workers and resident councils so that residents can be mentally, physically and socially engaged,” the colorful two-page leaflet boasted.

Last year, though, the industry teamed up with drug companies and others to push Congress and federal regulators to broaden the list of conditions under which antipsychotics don’t need to be publicly disclosed.

“There is specific and compelling evidence that psychotropics are underutilized in treating dementia and it is time for C.M.S. to re-evaluate its regulations,” wrote Jim Scott, the chairman of the Alliance for Aging Research, which is coordinating the campaign.

The lobbying was financed by drug companies including Avanir Pharmaceuticals and Acadia Pharmaceuticals. Both have tried — and so far failed — to get their drugs approved for treating patients with dementia. (In 2019, Avanir agreed to pay $108 million to settle charges that it had inappropriately marketed its drug for use in dementia patients in nursing homes.)

Ms. Blakeney said that only after hiring a lawyer to sue Dundee Manor for her husband’s death did she learn he had been on Haldol and other powerful drugs. (Dundee Manor has denied Ms. Blakeney’s claims in court filings.)

During her visits, though, Ms. Blakeney noticed that many residents were sleeping most of the time. A pair of women, in particular, always caught her attention. “There were two of them, laying in the same room, like they were dead,” she said.

In his first few months at Dundee Manor, Mr. Blakeney was in and out of the hospital, for bedsores, pneumonia and dehydration. During one hospital visit in December, a doctor noted that Mr. Blakeney was unable to communicate and could no longer walk.

“Hold the patient’s Ambien, trazodone and Zyprexa because of his mental status changes,” the doctor wrote. “Hold his Haldol.”

Mr. Blakeney continued to be prescribed the drugs after he returned to Dundee Manor. By April 2017, the bedsore on his right heel — a result, in part, of his rarely getting out of bed or his wheelchair — required the foot to be amputated.

In June, after weeks of fruitless searching for another nursing home, Ms. Blakeney found one and transferred him there. Later that month, he died.

“I tried to get him out — I tried and tried and tried,” his wife said. “But when I did get him out, it was too late.”

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