Unsanitized: Again With the Closures

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Bill Sikes/AP Photo

Unsanitized-071420

Those school supplies probably aren't getting purchased just yet.

First Response

The economy is officially shutting down again, but that’s really just a concession to an existing reality. California ordered a statewide shutdown of indoor dining, bars, and museums, and closures of gyms, malls, and churches in the counties where 80 percent of the state lives. Oregon also limited indoor gatherings to 10 people or less, an effective lockdown of most non-essential indoor activities. More states will follow.

Those places were shutting down without any governor’s help. Pretty much every good economic indicator in states that saw renewed numbers of cases faltered in the middle of June. The virus is teaching us that most people are actually not stupid. If a deadly disease is raging in their community, they’ll stay inside.

That fact—that the pandemic is the economy—just makes the official closures a formality. Though I would argue that official reopening does send an “all-clear” signal, which is harmful if all is not clear. That’s why the deprivation of state and local fiscal support was so important, because it did tell people it was safe to go back into the water, when it wasn’t.

Stopping and starting and stopping again is far more brutal for the economy than just stopping until the virus is actually suppressed. We’re hearing stories of small businesses giving up when the second lockdown order comes down, some of whom already received and exhausted a PPP grant once. Larger business bankruptcies are likely to grow. Failing to crush the virus has terrible impacts, and now we’re seeing a bifurcation within the country: states in the Northeast that suffered more early but got a handle on it can function in a more normal fashion, while the Sun Belt goes into lockdown in all but name. Of course, an outbreak is just one person across state lines away.

Read all of our Unsanitized reports

The other major announcement yesterday was that L.A. Unified School District, the nation’s second-largest, would not reopen to in-person schooling next month. This is tragic, especially if you’re skeptical of online instruction’s value for kids, who are set further and further behind, and if you know that, absent childcare, working parents are tethered home indefinitely.

But this was inevitable. The bleating at the White House over how schools “must” open did not accompany an actual method to do so. To test everyone in L.A. Unified once a week, school superintendent Austin Beutner noted, would cost $300 per year per person; L.A. Unified has over 700,000 students alone, and 60,000 teachers and staff. That testing money doesn’t exist and it’s not in any way the only expense. If you need to drop class sizes to keep students distanced, well, the class size debate has played out for decades, with higher class sizes winning. What makes you think that will reverse itself? CDC recommends circulating fresh air through schools. Have you been to a school lately? Where’s the money for retooling air systems? Trump is belatedly discussing school aid, but I don’t think anyone would believe it would be close to sufficient.

There are ways to reopen schools, informed by experience around the world (though nobody has tried it in the heart of a pandemic). It does seem like you can open elementary schools first, albeit with care, proper distancing, and sanitization. Maybe some other schools will reopen, at least until the first student or personnel member has to visit the hospital.

The biggest plan for reopening schools, really, is suppressing the virus. Just like with the rest of the economy, if people aren’t satisfied that everything is safe they’re not going to send themselves into harm’s way and they’re really not going to send their children (even if children are more just carriers; you try telling a parent that, well, only a handful of their kids will ever die from going to school). The polling on this shows close to three-quarters of parents uneasy with sending children to school. Until that changes, schools won’t reopen. And this is a wholly self-inflicted wound.

Reassurance will either take non-existent money or non-existent lifting of the viral threat. It’d be good to make either of those, or both, exist.

Odds and Sods

In coronavirus coverage this week at the Prospect, we have Michael Sainato with some stories of the unemployed who are collecting enhanced benefits that run out in only two weeks. Marcia Brown looks at ICE’s intolerable decision to require foreign students whose college classes have moved online only to leave the country. And J.W. Mason’s book review of Stephanie Kelton’s The Deficit Myth will become very important in the new few years of crisis response and heavy federal spending needs.

All of our coronavirus coverage is at prospect.org/coronavirus. And I haven’t mentioned this in a while, but send me your thoughts and tips via email.

A Taxing Day

Tomorrow is the new deadline for federal tax filing, and most state and local filing as well, depending on the state. This was pushed back from April 15. The reason for that delay was two-fold: one, the IRS moved everyone to work from home, and they needed the extra three months to get their systems set up to process returns. But the second reason was that this gave Americans a little bit of extra cash flow. You probably didn’t wait until now if you expected a refund. But if you owed money you could put it off from April until July.

That ends tomorrow. Treasury considered extending once more to September, but ultimately didn’t. So if you have a tax bill, you’re going to need to get it in by tomorrow. And that will end this cash flow reprieve that many have experienced. Right now the IRS is only down about 6 million returns, though many could have filed and just not sent in the money owed until it was due, which is what a certain person writing this newsletter did.

Now, in no way am I saying that nobody should pay their taxes. It’s just another in a series of bad breaks. The timing of this should have been perfect; a boost in the spring, and everyone pays once the economy springs back when the virus is suppressed. As with everything else, that plan was upended by governmental failure to contain the spread.

Days Without a Bailout Oversight Chair

109.

Today I Learned

• There are massive errors in the data every major news organization used to single out “undeserving” PPP recipients. Just completely corrupted data. Will any outlet retract their story? (Bloomberg)
• Also, PPP didn’t work, it was never designed for a long-term crisis. (Axios)
• Banks estimated to get $18 billion in fees to process PPP claims, the easiest money they’ve ever made. Totally risk-free. (The Intercept)
• Jane Mayer on one chicken producer (albeit a small one, not a “tycoon” as the headline says) getting rich during the pandemic. (The New Yorker)
• 5.4 million people lost their health insurance just through May. (New York Times)
• The World Economic Forum—the body that runs Davos—is talking about “revolutions” if the pandemic crisis doesn’t lead to meaningful change. (CNBC)
• Coronavirus pandemic raises fears of being unable to deliver flu vaccine, and therefore a flu epidemic. (TPM)
• Woman becomes a dishwasher at an assisted-living facility so she can see her husband. (Washington Post)