A Comment, a Column, and Carnage

“There isn’t any iceberg. There was an iceberg but it’s in a totally different ocean. The iceberg is in this ocean but it will melt very soon. There is an iceberg but we didn’t hit the iceberg. We hit the iceberg, but the damage will be repaired very shortly. The iceberg is a Chinese iceberg. We are taking on water but every passenger who wants a lifeboat can get a lifeboat, and they are beautiful lifeboats. Look, passengers need to ask nicely for the lifeboats if they want them. We don’t have any lifeboats, we’re not lifeboat distributors. Passengers should have planned for icebergs and brought their own lifeboats. I really don’t think we need that many lifeboats and they’re supposed to be our lifeboats, not the passenger’s lifeboats. The lifeboats were left on shore by the last captain of this ship. Nobody could have foreseen this iceberg.”

Someone calling themselves “Citizen” submitted that comment after reading Paul Krugman’s latest column in The New York Times. Krugman wrote:

“I don’t know about you, but I’m feeling more and more as if we’re all trapped on the Titanic — except that this time around the captain is a madman who insists on steering straight for the iceberg. And his crew is too cowardly to contradict him, let alone mutiny to save the passengers.

A month ago it was still possible to hope that the push by Dxxxx Txxxx and the Txxxxist governors of Sunbelt states to relax social distancing and reopen businesses like restaurants and bars — even though we met none of the criteria for doing so safely — wouldn’t have completely catastrophic results.

At this point, however, it’s clear that everything the experts warned was likely to happen, is happening. Daily new cases of Covid-19 are running two and a half times as high as in early June, and rising fast. Hospitals in early-reopening states are under terrible pressure. National death totals are still declining thanks to falling fatalities in the Northeast, but they’re rising in the Sunbelt, and the worst is surely yet to come.

A normal president and a normal political party would be horrified by this turn of events. They would realize that they made a bad call and that it was time for a major course correction; they would start taking warnings from health experts seriously.

But Txxxx, who began his presidency with a lurid, fact-challenged rant about “American carnage,” [is] doubling down on his rejection of expertise, this week demanding full reopening of schools in defiance of existing guidelines……

Until early 2020, Txxxx led a charmed political life. All his recent predecessors had to deal with some kind of external challenge during their first three years…..But Trump inherited a nation at peace and in the middle of a long economic expansion that continued, with no visible change in the trend, after he took office.

Then came Covid-19. Another president might have seen the pandemic as a crisis to be dealt with. But that thought never seems to have crossed Txxxx’s mind. Instead, he has spent the past five months trying to will us back to where we were in February, when he was sitting on top of a moving train and pretending that he was driving it.”

Unquote.

After hearing Txxxx speak at his inauguration, former president George W. Bush remarked, “Well, that was some weird shit”. When — not if — Joe Biden becomes president in January, Txxxx’s story about American carnage will have come true.

No More Bad Bailouts

An opinion piece from The Boston Globe describes a policy a sensible government would adopt:

Twice in a dozen years, Congress has undertaken enormous bailouts to rescue companies and individuals in the economy. In 2008, the federal government drafted legislation on the fly that bailed out the big financial institutions, but left many homeowners drowning with underwater mortgages. Amid popular outcry, Congress then promised to end bailouts forever with the passage of the Dodd-Frank Wall Street Reform Act in 2010.

Less than a decade later, Congress has authorized an even more enormous bailout. This time, the legislative process has been even more complicated. Congress once again scrambled, drafting legislation to address both the public health and economic emergencies stemming from COVID-19. So far it has rushed through five separate relief bills in a matter of months because each successive bill was insufficient to address not only the public health crisis but also the economic crisis. Congress will now likely take up a sixth bill in late July [assuming Sen. Turtle Face, the Kentucky Republican, agrees], in part to deal with the imminent expiration of expanded unemployment insurance benefits.

Once again, the rescue legislation has been a bonanza for lobbyists, financial institutions, and big businesses, which have been able to get access to financing relatively swiftly and with few conditions. Once again, the public is left wondering where all the money went. And once again, workers and Main Street businesses have been relegated to second-class status. Small businesses have struggled to get limited rescue funds under the Paycheck Protection Act. Even with trillions of dollars going out the door, 40 million Americans remain out of work. The public health crisis continues, as testing remains woefully limited and incidence of the virus is growing in many parts of the country. Communities of color have been hit especially hard, setting back efforts to expand equality and opportunity.

This ad hoc approach to responding to economic crises is inefficient at best and malpractice at worst. Emergency response and disaster management professionals do not “wing it” every time there is a forest fire or a hurricane. They prepare in advance, developing policies and procedures so they can react swiftly and effectively. When Congress starts thinking about a response only after an economic crisis starts, it’s no surprise that the response isn’t very effective.

Policymakers should take a page from the disaster response playbook. Economic crises are emergencies, and just like with a fire or a hurricane, many aspects of a response can be anticipated — unemployment, income shocks, and liquidity constraints. What we need, therefore, is a standing set of procedures and policies — an emergency economic resilience and stabilization law that can be activated when a crisis hits.

The benefits of this approach are significant. Congress could respond to economic emergencies more quickly because it wouldn’t need to reinvent the wheel every time there is a crisis. Executive branch agencies would also be able to anticipate the administrative capacities needed to implement the program. And individuals and businesses would have a good sense of what happens during a crisis, reducing fear and uncertainty.

Because the standing law would address the major foreseeable problems, Congress could focus its attention on the unique causes of the specific downturn. In the case of COVID-19, for example, Congress would have been able to spend much of the spring focused on the public health aspect of the crisis, such as facilitating production of tests and establishing a contact tracing system.

A standing program would also reshape the political dynamics around rescue legislation. In the fog of an economic crisis, lobbyists see a bonanza: a chance to stuff goodies for their clients into must-pass legislation. Members of Congress who simply want good governance can end up using their limited political capital fighting off such bad policies or ensuring that uncontroversial provisions make it into the final bill rather than advancing the best policies.

While Congress would be free to change the economic resilience program even in the midst of a crisis, the fact that a program already exists would require members to explain any divergences. There would likely be fewer concerns about lobbying, favoritism, and corruption because the rules would be written without anyone knowing which particular companies need help—or which lobbied hardest. So what might such a program look like? We think it should have four parts.

First, it would end no-strings-attached bailouts by providing a restructuring process for large or publicly traded companies. The companies would have the option to get funding from the US government, but their shareholders would be wiped out. Their debt would be converted into equity — meaning the company would now be owned by its lenders and by the federal government, which would get a preferred equity stake. Alternatively, companies would still have the option to pursue a traditional restructuring in bankruptcy, but without federal aid.

Second, there would be a program for smaller businesses to cover payroll and operating expenses to prevent mass layoffs and closures on Main Street. The small business program would be akin to what Congress attempted with the Paycheck Protection Program, but with direct payroll subsidies for employers to maintain payroll and cover operating expenses, rather than operating through banks as third-party intermediaries.

Third, there would be reforms to the financial system infrastructure so that every person or business could get an account to which emergency government payments could immediately be credited. That would make it possible for people and businesses to get direct payments, like checks, much more quickly than they have in this crisis.

Finally, the program would include “automatic stabilizers,” a wonky term for policies that are automatically triggered based on data, rather than relying on repeated and recurrent congressional action. In the event of an economic crisis like the crash in 2008 or COVID-19 this past spring, funding for state and local governments, for example, would automatically kick in and would continue until the economy has bounced back.

A standing economic resilience program like this one is possible for a simple reason. We can predict many of the policy responses that are needed in a crisis. While every crisis undoubtedly has its own unique trigger and features, the next time won’t be very different. Rather than live through another round of ad hoc bailouts for the wealthy and powerful and suffering for everyone else, Congress should get prepared, so our country’s response to the next crisis can be quicker, fairer, and more effective.

Unquote.

This week the government was forced to identify some of the “small businesses” that received stimulus money. They included top law firms, the Secretary of the Treasury’s family business, several chains with wealthy private-equity investors, twenty-two tenants of an office building owned by the president, Kanye West’s company, the Ayn Rand Institute and the Archdiocese of New York. 

It would be cynical to say a sensible policy like this would never, ever happen in a country like ours.

(It would probably never happen in a country like ours.)

The Economy, the Virus and Us

Annie Lowery of The Atlantic says that economists have four major concerns regarding the US economy.

(1) The household fiscal cliff:  Government stimulus payments have kept the economy in fairly good shape this spring, despite massive unemployment. However, the stimulus is supposed to end a month from now. Republicans don’t favor renewing it. That will mean  “millions of families just keeping their head above water will sink”. Consumer spending will plummet.

(2) The great business die-off:  “This steep decline in consumer spending will hasten mass business failure… An estimated 100,000 small companies have shut permanently. On top of that, numerous businesses—airlines, restaurants, live-events businesses, hotels, private schools, oil and gas companies—face severe and stubborn slumps….Economists expect that 42 percent of people recently let go will not return to their former employers.

(3) The state and local budget shortfall:  Every state except Vermont is required to balance its budget, but “sales taxes, real-estate-transfer taxes, income taxes, fines and fees—they are all collapsing, leaving local governments with a budget gap expected to total $1 trillion next year. Without help from Washington, this will necessarily mean massive service cuts and job losses: namely, an estimated 5.3 million job losses.

(4) The lingering health crisis:  “The catastrophe of the American government’s management of the … pandemic …  has led to the unnecessary deaths of tens of thousands of people…. The country is reopening with the disease still spreading and maiming and killing, as several states experience a dramatic surge in caseloads. Never getting the pandemic under control means never unleashing the economy…. Ending the pandemic would have been the single best thing the federal government could have done to preserve the country’s wealth, health, and economic functioning. The Txxxx administration, in its hubris, obstinacy, and incompetence, failed to do it.”

“Congress could extend unemployment insurance, offer new help to flailing businesses, send monthly cash grants to poor families, offer fiscal relief to the states, and implement a nationwide test-and-trace program.” Or things may get a lot worse.

From Stat News:

The “respiratory” virus that causes Covid-19 made some patients nauseous. It left others unable to smell. In some, it caused acute kidney injury….The Centers for Disease Control and Prevention constantly scrambled to update its list [of symptoms] in an effort to help clinicians identify likely cases.

[But] in late January, … scientists in China identified one of the two receptors by which the coronavirus, SARS-CoV-2, enters cells. It was the same gateway, called the ACE2 receptor, that the original SARS virus used. Studies going back some two decades had mapped the body’s ACE2 receptors, showing that they’re in cells that line the insides of blood vessels — in what are called vascular endothelial cells — in cells of the kidney’s tubules, in the gastrointestinal tract, and even in the testes.

Given that, it’s not clear why the new coronavirus’ ability to wreak havoc from head to toe came as a surprise to clinicians. Since “ACE2 is also the receptor for SARS, its expression in other organs and cell types has been well-known”….

The assumption that infection would first and foremost cause respiratory symptoms was misplaced. In the week before they were diagnosed, Covid-19 patients were 27 times more likely than people who tested negative for the virus to have lost their sense of smell. They were only 2.6 times more likely to have fever or chills, 2.2 times more likely to have trouble breathing or to be coughing, and twice as likely to have muscle aches. For months, government guidelines kept people not experiencing such typical signs of a respiratory infection from getting tested.

Faced with a disease the world had never seen before, physicians are learning as they go. By following the trail of ACE2 receptors, they are more and more prepared to look for, and treat, consequences of SARS-CoV-2 infection well beyond the obvious.

A Reminder Where the Real Money Is

From Philadephia Inquirer columnist Will Bunch’s newsletter (you can sign up here — it’s free):

>> The billions for a more just, less racist America are hiding in plain sight at the Pentagon 

You couldn’t blame the legions of marchers who’ve taken over some of America’s streets this past month in the name of justice for George Floyd for wondering which army they were fighting. Many protests have been met with weapons of warfare — with choking tear gas (actually, the UN doesn’t even allow that in war!), sharpshooters taking out eyes with rubber bullets, or cops tossing grenades that go flash and bang, occasionally with an armored personnel carrier as a scenic backdrop.

To protesters, the massive response by helmeted robocops is proving their point that America spends too much on policing, and it does! $115 billion a year to be exact. But what if the problem with “militarized police” isn’t only the police but the “militarized” part? … a sickness that manifests itself in warrior cops at home but also drone strikes in an endless U.S. “forever war” overseas.

What if the money to pay for all the social programs that our over-policed cities really need — to hire school nurses and buy new textbooks, and recruit a new kind of army of social workers and drug counselors — isn’t only supporting your local police, but hiding in plain sight on the left bank of the Potomac River?

No political leaders from either party ever ask how taxpayers could possibly afford the $1.5 trillion for the Pentagon’s underwhelming F-35 stealth jet, even as your coronavirus nurse works the ICU wearing a Hefty bag. — Will Bunch

Defund the police? Sure. But real leaders defund the Pentagon.

“Our security investments have been in too many of the wrong places,” Matt Duss, the top foreign-policy advisor to former presidential candidate Sen. Bernie Sanders, told me this week, in what could arguably be called an understatement. “We’ve need to have a serious conversation about reducing the defense budget.”

Do we ever! The current Pentagon annual budget of $736 billion is larger than military spending by the next 10 biggest nations combined — and we’re talking about places like China, Russia and India. (For the curious, only China’s military spends more than that $115 billion America spends just on cops.) Yet somehow, no political leaders from either party ever ask how taxpayers could possibly afford the $1.5 trillion (yes, with a “t”) that’s gone down a sinkhole for the Pentagon’s underwhelming F-35 stealth jet, even as your coronavirus nurse works the ICU wearing a Hefty bag.

The weird part of this, though, is the way that congressional Democrats — who once could be counted on to at least pay lip service to curbing the military-industrial complex — have thrown in the towel on defense cuts in the Trump era. When Democrats re-took control of the House in 2019, their $733 billion proposal for the Pentagon was only a tad smaller than President Trump’s bloated plan.

“Members of Congress are very concerned about being cast as ‘weak on defense,‘” Duss told me — a problem that’s become deeply rooted in the so-called “war on terror” era, post 9/11. There’s other issues — America’s politically wired allies in the Middle East and elsewhere pushing for a U.S. military presence, and defense jobs scattered across so many congressional districts.

Despite all these roadblocks, Congress, led by Duss’ boss, Vermont’s Sanders, last year turned heads with an unprecedented vote to end U.S. support for Saudi Arabia’s war in Yemen — thwarted, of course, by a Trump veto. Now, in a George Floyd moment where radical change seems possible, Sanders is pushing an amendment to immediate cut defense spending by 10 percent to funnel more than $70 billion into anti-poverty programs.

Currently the most ambitious dreamer among the defund-the-Pentagon crowd is California Rep. Barbara Lee, the only House member to cast a “no” vote on authorizing the anti-terror war in 2001. Her resolution aims to cut U.S. defense spending roughly in half — some $350 million — which would include canceling Trump’s Space Force (the real one, not the badly reviewed TV show) and getting rid of a majority of America’s global archipelago of military bases. Can’t afford it? With a deep economic recession and pressing social needs, can we afford not to?

Taking on the military-industrial complex isn’t a distraction from the demands on the street for racial justice; rather, it cuts to the core of the problem. Whether armed men are firing tear gas into Lafayette Square or Predator drones into weddings in Afghanistan, the amount of money that America spends on suppressing, attacking and killing human beings is obscene. And there’s a new generation, with a new explanation, that’s figuring this out.

Relevant Comments from the Last Century

Ken Makin of the Christian Science Monitor says that, at times like this, it’s too easy to quote the final words of Martin Luther King’s “I Have A Dream” speech, when King looked forward to the day “all of God’s children … will be able to join hands and sing … Free at last! Thank God almighty, we’re free at last!” Mr. Makin suggests we remember some of Dr. King’s other, more specific words.

From his last book, Where Do We Go From Here: Chaos or Community?:

Ever since the birth of our nation, white America has had a schizophrenic personality on the question of race. She has been torn between selves – a self in which she proudly professed the great principles of democracy and a self in which she sadly practiced the antithesis of democracy. This tragic duality has produced a strange indecisiveness and ambivalence toward the Negro, causing America to take a step backward simultaneously with every step forward on the question of racial justice, to be at once attracted to the Negro and repelled by him, to love and to hate him. There has never been a solid, unified, and determined thrust to make justice a reality for Afro-Americans.

From his final speech, “I’ve Been to the Mountaintop”, delivered in Memphis, Tennessee, the day before he was shot:

Let us keep the issues where they are. The issue is injustice. The issue is the refusal of Memphis to be fair and honest in its dealings with its public servants, who happen to be sanitation workers. Now, we’ve got to keep attention on that. That’s always the problem with a little violence. You know what happened the other day, and the press dealt only with the window-breaking. I read the articles. They very seldom got around to mentioning the fact that one thousand, three hundred sanitation workers were on strike, and that Memphis is not being fair to them, and that Mayor Loeb is in dire need of a doctor [the mayor being one of our “sick white brothers”]. They didn’t get around to that.

And from the “I Have a Dream” speech five years earlier:

It would be fatal for the nation to overlook the urgency of the moment. This sweltering summer of the Negro’s legitimate discontent will not pass until there is an invigorating autumn of freedom and equality. Nineteen sixty-three is not an end, but a beginning. And those who hope that the Negro needed to blow off steam and will now be content will have a rude awakening if the nation returns to business as usual. And there will be neither rest nor tranquility in America until the Negro is granted his citizenship rights. The whirlwinds of revolt will continue to shake the foundations of our nation until the bright day of justice emerges.