Unsanitized: The Frozen-in-Time Senate

Plus, the bankruptcy stock buy. This is The COVID-19 Daily Report for June 9, 2020.

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First Response

Yesterday, Democrats introduced the Justice in Policing Act, a series of reforms to police procedures, including limiting qualified immunity protections, lowering burdens of proof for police misconduct, grants for state attorneys general to conduct independent investigations of cases, a national registry for excessive force encounters, bans on chokeholds and “no-knock” warrants (the kind that officers obtained when they killed Breonna Taylor), and interestingly, no funding to police departments for these added responsibilities. It’s definitely just a reform bill, though some of the universal bars would represent progress.

Democrats now have two crucial pieces of legislation responding to immediate crises, with Justice in Policing joining the Heroes Act, the model bill for continued pandemic response that the House passed last month. Both run into the brick wall known in Washington as Mitch McConnell. And it’s worth understanding how unyielding that brick wall has been. The Senate is mostly a judicial confirmation factory; it doesn’t do policy anymore.

I went into the Senate archives to look at roll call votes in the second session of the 116th Congress. Obviously this has been an unusual year, with the pandemic knocking a couple months off the calendar and an impeachment vote (remember that) eating up a couple weeks. So the fact that there have been just 114 roll call votes in nearly half the year isn’t that surprising. But let’s take a deeper look at those votes.

Read all of our Unsanitized reports

Of the 114 roll call votes, 60 have been for nominations of executive branch appointments and judges, and another 20 were impeachment–related. So less than one-third of all roll call votes in this Senate session have been on legislation. Of those, only 11 pieces of legislation have come up for a roll call vote in five-plus months, and only four have passed into law: the first three coronavirus bills, and the implementing legislation for the NAFTA rewrite, the U.S.-Mexico-Canada agreement (USMCA).

Here are, in total, the other seven bills that have seen a roll call vote: a resolution trying to prevent war with Iran (passed Congress and vetoed), two abortion-related bills (both failed), a geothermal research innovation bill (failed), a Congressional Review Act resolution on an Education Department rule making it harder for defrauded borrowers to get their loans canceled (passed Congress and vetoed), the FISA amendment reauthorization (passed the Senate, stalled so far in the House), and the “Great American Outdoors Act,” which got a cloture vote yesterday (and conservatives hate it so it’s probably not going anywhere).

Other pieces of legislation have passed through the Senate this year, but not with a recorded vote, meaning they were non-controversial enough that nobody objected to their passage. Heck, last week the Senate couldn’t get an anti-lynching bill onto the floor, thanks to Rand Paul’s intransigence.

One of the two houses of Congress has given up on policymaking, and the House keeps sending over policy after policy to go into McConnell’s legislative graveyard. So what’s the endgame?

McConnell still seems to think that hitching the Senate to the falling star of Donald Trump is their only path to holding the chamber next year, despite sinking poll numbers. That would seem to rule out the policing bill, given President Archie Bunker’s law and order kick. Three coronavirus bills represent most of the legislative effort this year, and until last week’s jobs report, there was a crack in the door for a fourth. But now Republicans are holding up that jobs report to justify returning to their bedrock principles of not helping out ordinary people. This is a tragic mistake economically and politically, but for a Senate frozen in amber, it does have the virtue of consistency.

The final bit of leverage here is the budget for fiscal year 2021. Democrats plan to pass all the appropriations bills in July, and the deadline for the budget is September. Presumably McConnell doesn’t want to toss a government shutdown onto a pandemic and weeks of protest over police brutality, so Democrats will have some means to dictate terms. But September is so far away, and millions of struggling Americans can’t wait.

Odds and Sods

Here’s an update to yesterday’s Unsanitized about Arizona’s coronavirus crisis: the state health director has activated emergency planning for hospitals. This comes while protests continue to line streets and epidemiologists substitute their personal beliefs for solid science about the risks. Who will be the first to stand up and say “It’s not safe to be involved in mass gatherings in the state of Arizona right now”?

A final reminder that about our virtual event tomorrow with the American Economic Liberties Project, “Making Facebook & Google Safe for Democracy.” We will be discussing Section 230 immunity for user-generated content, and the future of the internet. Rep. Jan Schakowsky (D-IL) will be in conversation with Economic Liberties’ Sarah Miller, and then there will be a discussion with me, Economic Liberties research director Matt Stoller, and former Obama policymaker Karen Kornbluh. It’s happening on Wednesday, June 10 at 11am ET. RSVP here.

And if you have comments, tips, or perspectives, please email me.

Bankrupt? No Problem!

It’s not controversial to say that bankruptcy usually signals bad news for investors. Creditors get paid first, and the most likely scenario wipes out shareholders entirely. But in the lol nothing matters world of the 2020 stock market, bankruptcy is now a buy opportunity.

Shares of Hertz, which filed for bankruptcy amid massive amounts of debt a couple weeks back, have gone up, a lot, since that announcement. It’s now trading significantly higher than it was before the bankruptcy. Part of this reflects the fact that Hertz owns a bunch of cars, and that physical inventory could leave money for investors even after the creditors are made whole. But it’s also being driven up on hopes of recovery, which for a bankrupt firm is completely nuts.

And Hertz is not alone. JCPenney’s stock has doubled since bankruptcy; so has Whiting Petroleum. The exuberance has gotten so irrational on Wall Street that companies likely for liquidation are being bid up. This is a flush-money-down-the-toilet trade.

I’ve heard the theory that enough people are home and bored that trading stocks has become a pastime, and you can talk yourself into anything in that situation I guess. But I’m more inclined to say that the Federal Reserve bailout of investors has created a market uplift that doesn’t discriminate against dead firms. People are stuffing their money in on the expectation that the Fed will sprinkle magic dust and make everything better, and since that’s worked for a decade, why not now. Why not in bankruptcy.

The Nasdaq is at a record high and the S&P 500 is positive for the year. More than 20 million people are newly out of work. Markets this irrational don’t usually end well.

Today I Learned

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