Manuel Balce Ceneta/AP Photo
Unsanitized-080320
House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer address the media on Saturday, after meeting with White House officials.
First Response
Back in March, Senate Republicans put together a fairly partisan bill to respond to the coronavirus, Democrats asked for changes and got them, and the legislation passed. This time around, Senate Republicans put together a fairly partisan bill, and a couple weeks later, we are nowhere near an agreement. The Sunday show finger-pointing was notably intense, and Mitch McConnell has completely disconnected, as the White House and Democratic leaders negotiate. The White House has explored unilaterally extending unemployment benefits, which they can’t really do, such is their frustration with failing to reach agreement.
This has surprised a few people. Congressional Republicans still have an election to run in November, after all. A depression would presumably be catastrophic to their hopes. Don’t they still have any interest in preventing widespread suffering?
In their mind, they have. The suffering on Wall Street has been lifted. On the day that expanded unemployment benefits expired last Friday, the stock market rose. It’s back up again today. As we know, this is the cause of an ironclad vow from the Federal Reserve to do whatever it takes to protect asset prices, and a $4.5 trillion money cannon facilitated by Congress to back up the promise.
The corporate bailout was the rescue Republicans wanted. It was valuable to them and they were willing to give up a lot to get it. Democrats secured some pretty good terms but they were all temporary, and now they’ve mostly expired. The Fed money cannon, you will note, has not.
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In the second round, Democrats want lots more: $3.5 trillion worth, if you see the Heroes Act as their opening bid. But Republicans already got their corporate bailout. That was the moment of highest possible leverage. Republicans, or at least McConnell, would like to give corporations total immunity from any negligence lawsuit over infecting workers and customers, but it’s more of a nice-to-have than a must-have. They already have the Supreme Court, after all.
So the deal isn’t coming together as easily this time because you have a serious imbalance between what each side actually wants. “But the election,” you might ask. Republicans know they’re cooked in the election. They can read a poll, they can see the death count, they know who Donald Trump is and that suppressing the virus is something he can’t BS his way through. There are two choices here: try to salvage the election in a probably fruitless attempt, or saddle the next president with a depression, and immediately shift to deficit fearmongering to constrain the response, and win in 2022 and 2024.
Opting for the latter probably isn’t unilateral among Republicans but it doesn’t have to be. If enough Republicans are looking past this year, that’s enough to crush their negotiating position. But since at least some Republicans are required to find a compromise, having them check out makes a deal elusive.
All of this is to say that Democrats had really one shot to maximize the relief measures, back in March. At that point they could have ensured that there wasn’t an imbalance between temporary individual measures and permanent corporate ones. That was the time to ensure money for the Postal Service and the elections. That was the time for significant state and local relief commensurate with the scale of the problem, with no strings attached. Many of us were urging Democrats to up the ante on their asks, because the leverage would go away after the corporations were taken care of.
But here we are. I haven’t been arguing that the CARES Act was a bad bill in hindsight, but in foresight. I looked a little bit down the road and saw this disaster unfolding. I saw that the design of the CARES Act was going to lead to premature reopenings. I saw that Donald Trump was the president and a well-managed conclusion to the coronavirus crisis wouldn’t be possible. I’m not a clairvoyant and it didn’t take one to see these problems. It required only a simple appreciation of negotiating leverage and an ability to look over th horizon.
Nobody did. And here we are.
The Teacher Hiring Surge that Isn’t
We’re going to get monthly job numbers on Friday, and estimates have been so off during the pandemic that the outcome is really unknown. But at least one set of numbers will be quite distorted.
Bill McBride of Calculated Risk has been explaining for a while that the seasonal adjustment for education routinely accounts for a large number of education personnel—teachers, but also various support staff—being laid off in June and July and going back to work in the fall. Those teachers have already been laid off much earlier in the school year. The way the seasonal adjustment will work, it adjusts for these losses in hiring and smooths them throughout the year. The way it will work this year is that it will show a large surge in hiring of teachers in July, about 850,000 worth, give or take.
Obviously 850,000 teachers weren’t hired last month. And to be clear, this just takes things back to the normal level of teachers, meaning that the job loss previously was over-emphasized. But when that headline jobs number comes out, it’s going to include this phantom teacher hiring surge. That’s based on a season adjustment that this year is a little bit skewed.
Oh God
They’re doing the Sturgis rally this year. Sturgis is a massive biker event in South Dakota; back in my TV editing days I once worked on a show about it. The week-plus event starts August 7 and brings in bikers from around the country. Over 250,000 people are expected, about half as many as normal (though since it’s literally the only major gathering of its kind in the U.S. since March, that number could go a fair bit higher). Maybe I’ll be pleasantly surprised, but my assumption is you’ll be able to count the masks on one hand.
Sturgis has apparently become more upscale in recent years, with affluent biker enthusiasts joining the fray. But this is probably a case of having no way to cancel this thing even if you officially canceled it. And so, starting this Friday, hundreds of thousands of people are going to come together in one campground during the pandemic.
Yikes.
Days Without a Bailout Oversight Chair
129.
Today I Learned
- The incredible progress on a vaccine is remarkable. (Stat News)
- Hundreds of Pac 12 football players are threatening to bail on the season without safety protections for them and other athletes. A big moment for college athletics. (Vox)
- Operation “Make People Hate the Post Office” continues, as mail is significantly delayed across the country. The twin goals of privatization and voter suppression are activated. (Philadelphia Inquirer)
- Retail bankruptcies today include Lord & Taylor and the parent company of Men’s Wearhouse. (NBC News)
- One fun side note to the retail bankruptcies is that foreign suppliers that have already delivered product usually get stiffed. (Washington Post)
- Huge lockdown in Australia after case counts jump to 671/day in one state. We had 15,000 in Florida not too long ago. (CNN)
- An actual crisis along the U.S.-Mexico border: coronavirus spikes in south Texas with not enough medical facilities to mitigate it. (Houston Chronicle)
- Did the pandemic kill the theatrical window for movies? (Wall Street Journal)
