Charles Krupa/AP Photo
Joe Biden and Elizabeth Warren, back in February when it was OK to shake hands
First Response
There’s a lot to say about Sunday’s McClatchy op-ed from Joe Biden and Elizabeth Warren about oversight of the coronavirus relief programs. But I’ll start by talking about the venue.
The New York Times or the Washington Post or virtually any news outlet in America would have been happy to take an op-ed from the presumptive Democratic nominee and the woman that Democrats appear to believe is the best choice for his vice-presidential running mate. McClatchy was a choice. It so happens that one of the larger McClatchy papers is the Miami Herald. And the Miami Herald is the hometown paper for one Donna Shalala.
As Unsanitized readers know, Shalala is on the Congressional Oversight Commission, one of the monitoring entities of the coronavirus response package (particularly the Federal Reserve bailout programs). Warren’s former aide Bharat Ramamurti is also on the commission. Last week Shalala took a shot at Ramamurti, indirectly referencing his aggressive public advocacy for more transparency from the Fed by saying “This is a commission, it’s not an individual assignment… we should not be rogue in this role.”
I don’t think the location of the op-ed is an accident, is all.
Read all of our Unsanitized reports
Now, to the substance. There’s an attempt made here to conflate Biden and Warren’s oversight experience, between Biden running the stimulus and Warren chairing the Congressional Oversight Panel that scrutinized the TARP bailout. This is amusing to anyone who knows the history of Warren’s fights with the Obama administration and with Biden himself. But this is undeniably true, and the reason oversight is needed: “Americans’ faith in government is undermined when the price of helping everyone else is more giveaways for those at the top.”
So what are they asking for? They want a repeal to the $170 billion tax giveaway to real estate developers and hedge funds that just so happened to make its way into the rescue package. On oversight, Biden and Warren say that “both of us have long refused to own or trade in individual stocks while in office, and this should be a requirement, not a choice, for members of Congress and other government officials responsible for the recovery programs.” That has resonance regarding Donna Shalala, who has been struggling to explain her violations of disclosure laws around stock trades and has admitted to still owning significant amounts of individual stock in UnitedHealth, to say nothing of several more she likely owns.
Biden and Warren also want conditions on firms accepting bailout funds, from restrictions on political spending and lobbying to protections for employees from being fired. Shalala has said “I’m not particularly interested in nitpicking” the Fed on the terms of their bailout programs. This would fall under nitpicking.
Finally, there’s a demand to protect inspectors general and whistleblowers from retaliation, a call for more transparency from the Fed and the Treasury Department on their bailout deals (complete with a link to Ramamurti’s op-ed on the subject), and a grant of subpoena power and a broader jurisdiction (including the small business lending program) for the bailout oversight panel. Biden commits to reviewing every pandemic response transaction if he gets into office, and referring any fraud to the Justice Department for criminal prosecution. “Trump may wink and nod at this corruption. We will not,” Biden and Warren write.
This op-ed will set political tongues wagging, but it’s important for two reasons. First, as already laid out, it puts pressure on Donna Shalala to fulfill her role, and on Nancy Pelosi for choosing her in the first place. Second, it highlights the theme of corruption that will be critical in the fall campaign. There are six months for venality in coronavirus response to come out, and aggressive oversight at all levels will be critical to that. Here is the standard bearer of the party and the most prominent anti-corruption politician putting that front and center.
Odds and Sods
Unrelated to COVID-19, but at the Prospect today I have a story about one of the political appointees accused of manipulating research to justify watering down payday lending rules at the Consumer Financial Protection Bureau. Turns out the appointee ran a Buy Here Pay Here high-cost auto loan shop for three years. Read here.
Also today, Ron Knox has an excellent piece on the meat monopoly and how this has exacerbated the problems during the coronavirus crisis. Read here.
All of our coronavirus coverage is at prospect.org/coronavirus.
In the Interest of Full Disclosure
Last week the New York Times reported that a number of media outlets had sought Paycheck Protection Program loans for their businesses. There’s a very strange development going on where businesses are paraded in front of the spotlight for the nation to determine their worthiness for a short-term, temporary forgivable loan, when Boeing and Carnival cruises and the oil industry get tens of billions of dollars thanks to the Federal Reserve buying entire credit markets.
But PPP is high-profile and tangible and easy to understand: either a business got a loan or they didn’t. And so let me be perfectly clear: the Prospect applied for a PPP loan, and last week, we received one. The loan is in the very low six figures, and since the Prospect has not laid anyone off through this crisis and don’t expect to, we expect that it will convert into a forgivable grant.
Like virtually every other business in media, the coronavirus crisis has harmed our ability to sell ads and raise funds. Our readers have really stepped up, and we had a successful donor match campaign last month. This is the bedrock of our financial strategy. But with so many struggling, it’s hard to consistently ask for more, and we saw the need for emergency assistance to bridge us through this time.
Our path to the PPP loan was instructive. We ended up trying through five different financial companies: our depository institution, another bank we have done business with, our payroll company, and two different technology firms. We started putting in applications on the first day of the first round, and were locked out. In the period before the second round we kept filling out applications and talking to representatives. The breakthrough was with Paypal, one of the companies we use to receive donations. We heard a day or so into the beginning of the second round.
I should say that I was not involved in any of these processes; our part-time accountant and our publisher did the legwork. We take seriously the separation between the editorial and business sides, and throughout the time that I was writing about the PPP, I wasn’t also trying to figure out how to get one. It didn’t affect our reporting on the front end and it won’t affect our reporting now.
Public funding for journalism has been a feature of America since the founding, when the postal service offered a lower rate for delivering newspapers. We are also a non-profit that follows the rules to maintain that status, with certain tax benefits as a result. None of this has played or will play any role in our coverage. But as soon as I heard about receiving the loan, the thought was not whether we would disclose this to our readers but how. So this is how. Thanks.
Today I Learned
- To a shocking degree, investors mostly follow Warren Buffett, so airline stocks were always going to collapse today. (Reuters)
- Buffett isn’t rescuing anything like he did in 2008, a signal of how uncertain the picture is economically. (New York Times)
- Another study of excess deaths. We’re probably already at 100,000 casualties. (Washington Post)
- Maybe it’s because other countries are lifting lockdowns that Americans are getting so antsy about ours? Of course, other countries are actually taking the proper steps. (Associated Press)
- The next relief bill just isn’t going to happen anytime soon. Leverage has been lost. (Axios)
- A tax cut for people who are working to help the 25 percent who aren’t is just, chef’s kiss. (The Hill)
