Unsanitized: A Modest Proposal: It’s Time to Sue Every Corporation to Prevent a Depression

Plus, how Big Media rips off its competitors. This is The COVID-19 Daily Report for August 12, 2020.

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First Response

Amid the Trump and circumstance and everyone’s take on Kamala Harris, we have lost sight of an economic depression now playing out in slow motion. As of this moment, no unemployed person in America is getting anything above their state’s share in weekly checks. After governors pushed back strongly on Trump’s executive measure, which would have had them pony up 25 percent of a $400 unemployment boost (California, Kentucky, New Jersey, and really everybody; this map lists the states that have spoken publicly on it), the White House acknowledged that the state share will not be required, and unemployed workers will just get $300. This appears to be illegal under the statutory authority they’re using to do this unilaterally, which requires a 25 percent match. But since when has the law been relevant?

When anyone will get even that $300 is an open question, as it will take significant reprogramming of state unemployment systems. Meanwhile, I haven’t heard a single company say they’ll actually stop withholding payroll taxes to give workers a temporary, ephemeral 6.2 percent pay boost. So for the foreseeable future, the economic impact of the Trump unilateral actions is nothing.

There is increasingly no hope of actual talks to create a Congressional package. Claims from both sides that they’re “open” to talks haven’t led any to happen, the chief of staff and chief enforcer in deal negotiations Mark Meadows has left town for a week, and the House is out of town until September 14. Every expectation is that nothing will happen until at least then, and I think it could be longer. You have Republicans who’ve found their inner deficit hawk cheerleading failure, and in general there’s nothing compelling bringing them to the table, after the corporate bailout was set in motion in March.

Read all of our Unsanitized reports

In the meantime, we can expect the economy to deteriorate, potentially rapidly. More rent payments are getting put on credit cards, a sign of financial stress. People are liquidating 401(k) plans for ready cash. Food pantries are seeing record demand. The evictions have begun. People are saving in expectation of an extended recession, creating the vicious cycle that leads to recession-induced job loss, not just pandemic-related layoffs. State and local budget crunches (5.6 percent annualized spending cuts last quarter, with more to come) are just going to compound this pain, and the federal government has pulled out all the supports for the economy. This situation is dire.

What can be done about it? How can depression be prevented through a fiscal deal?

The answer, in my estimation, lies in suing every corporation in sight.

There are only a couple ways to get Republicans, who have little interest in further relief on its own, to the table to make a deal. One would be a collapse of the stock market. But it’s approaching an all-time high, and whatever stumble came at the end of yesterday’s session after fears of an impasse on fiscal relief have subsided by today, as stocks are up. As long as the Fed keeps vowing to inflate assets, and as long as the companies dominating the Dow—Big Tech, essentially—keep expanding their market position, there’s little reason for investors to worry.

Even if the market does deteriorate as the reality of the next depression hits, by that time we’ll be in the undertow of an economic collapse. This is not what you want to wait for to get Republicans to think seriously about a fiscal response. So hoping stocks go under is not a realistic option.

The only other thing that has roused Republicans in recent weeks is this idea that corporations will be endlessly sued by workers and customers over contracting COVID-19, and that we need a mass liability release to protect them. The problem is that there is no flood of lawsuits at the moment, relieving the pressure for this. But let’s do a thought experiment here. What if every trial lawyer in America started streaming into courts with wrongful death and injury lawsuits? What if every corporation in America suddenly had to deal with liability on a mass scale? What if the suits sought to make CEOs personally liable for this activity?

Maybe the courts are so in hock to corporate interests that this wouldn’t cause much concern either. But I’d gather that more lobbyists would be in the ear of Republicans to get to bargaining if there were thousands of lawsuits hanging over them, compared to now, when almost no suits have been filed.

Sure, what would result would be distasteful: Republicans would eagerly seek immunity for corporations’ role in the deaths of thousands of people. But this depression will also kill thousands of people. And what’s standing in the way of that right now is a lack of interest on the part of Republicans to do anything about it. The immunity can be written far more narrowly than Mitch McConnell’s opening bid, which pretty much would have put medical malpractice cases on ice for five years. But at least if immunity were on the table, there might actually be a negotiation.

This modest proposal reverses the terrible mistake Democrats made in not getting long-lasting relief the last time there was something Republicans wanted. That’s going to come at a high cost.

Unfortunately, liberals aren’t the well-organized machine of conservative fever dreams. There is no Bat-signal to the trial lawyers to start ramping up cases. But that’s what I think it’ll take for there to be any interest in an actual bargain. It’s sad, of course. But it’s also necessary.

Odds and Sods

Some Monopolized news: I was on BNN Bloomberg (the Canadian version of the business network) discussing the book. Watch here. I also was on the LitHub podcast with Andrew Keen for a long discussion. Listen here.

WHYY’s Radio Times had me on yesterday to discuss the Big Tech hearings. Listen here.

And at about 8:30 of this “Closer Look” segment on Late Night with Seth Meyers, you can see a clip from me talking about the post office. Watch here.

I’m deliberately not linking to a New York Times story that blatantly rips off The Capitol Forum and us, in telling the story about the Postal Service seeking to force higher postage rates from states to deliver mail-in ballots without crediting the originators (see the links) who told the story. This is depressingly common and an extension of many of the themes in Monopolized, with big incumbents muscling out competition by just copying them. The Times’ building facilities department is probably bigger that our staff and the Capitol Forum’s combined. They have every ability to get their own stories. And if they don’t, one line of credit saying where it originated from is literally the least they can do. It’s shameful and designed to undermine media diversity, as in “nobody should exist but the New York Times.” So get your Times coverage elsewhere from now on.

This piece from Katya Schwenk on the history of one privately managed ICE facility where almost 90 percent of the detainees have contracted coronavirus is first-rate. And we have Shera Avi-Yonah, one of our interns, on the struggles of voter registration drives during the pandemic.

You can read all of our coronavirus coverage at prospect.org/coronavirus. And email me with tips, comments, and perspectives.

Days Without a Bailout Oversight Chair

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Today I Learned

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