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The Wrongologist

Geopolitics, Power and Political Economy

The Coming Eviction Tsunami

The Daily Escape:

Sunset, Northern CO near WY border – 2020 photo by Maxwell_hau5_caffy. Note the beetle kill.

On Monday, the Republicans released their latest coronavirus stimulus package, the so-called HEALS Act. HEALS stands for Health, Economic Assistance, Liability Protection and Schools.

We know that it drastically reduces unemployment assistance, but it also doesn’t include an extension of the federal eviction moratorium. Last Friday, the federal moratorium on evictions in properties with federally backed mortgages and for tenants who receive government-assisted housing expired.

They should have called it the Republican HEELS Act.

Since Republicans want to cut the amount of federal enhanced unemployment insurance from $600/week to $200/week, it’s likely that many fewer Americans will be able to make their rent payments.

Housing advocates had been pushing for at least $100 billion in rental assistance, as well as a uniform, nationwide eviction moratorium. According to the COVID-19 Eviction Defense Project, we may be looking at something like 19 to 23 million, or 1 in 5 people living in renter households could be at risk of eviction by October.

But that may be optimistic. CNBC published this map of potential evictions by state, based on an analysis by global advisory firm Stout Sirius Ross. It shows the percentage of renters in each state that could face eviction:

For example, 59% of renters in West Virginia (highest) are at risk of eviction, compared to 22% in Vermont (lowest).

The average number for the US is about 43% of tenants are at risk of eviction. That equates to 17.6 million households. The study estimates that there will be 11.9 million eviction filings in the next four months. They think that there will be two million evictions filed in both August and September, leaving 8 million for October and November.

Let’s have a thought experiment. The study assumes that there will be two million evictions filed in both August and September, and another four million in each of the following two months.  Let’s stipulate that each household averages 2.5 humans.

August: 2 million evictions equals 5 million homeless

September: 2 million evictions equals 5 million homeless

October: 4 million evictions equals 10 million more homeless

That totals 20 million people who are casting about for shelter as the cold weather hits the US, with another 10 million to come in November, for 30 million total.

This is an apocalypse.

An important consideration is that perhaps as many as 7 million of them may be registered voters who will be disenfranchised in November, since they no longer live at the address where they are registered.

Think about what’s coming from this change to the Republican bill: Millions of people will be realizing that they have absolutely nothing left to lose, people who feel as though there’s no way out. Then they find they are suddenly ineligible to vote.

2020 has forced our eyes open. All generations that are younger than the Boomers already feel as though any opportunity they had for a sound future has been stolen. In the midst of a global pandemic, they’ve seen Washington deny them healthcare, a safety net, and fritter away most of the societal stability they had.

So where are we heading?

If evictions occur on a grand scale, we’ll be in uncharted waters. It’s not just people being thrown out on the street, there’s no one else moving in. Residential landlords with no tenants face a dilemma, the same situation that has already affected commercial landlords: Few tenants and those who remain are looking for lower rents. When residential properties in the cities become vacant because of eviction or other reasons, and nobody is around to move in, what happens?

Squatting is likely. Carving residences into smaller and smaller units was common during the Depression, and that’s likely to happen again. Our biggest problem is that there is no obvious way to get America off the current Road to Ruin. DC is a disaster on all fronts.

Once the pandemic emergency is past, we will understand the extent to which the rich and politically well-connected have been taken care of, while the poor have largely been destroyed.

We’ve learned beyond a shadow of a doubt how political action, including $multi-trillion bailouts can be mobilized quickly for the right class of people, while helping the rest of us can be dismissed out of hand.

Same old story in America.

What can/should Biden do to change this?

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We’re Not a Failed State, We’re a Failed Society

The Daily Escape:

Sand Dunes National Park and Preserve, CO – photo by exposurebydjk. These are the highest dunes in North America.

Wrongo has written quite a bit lately about America’s fracturing social cohesion, and increasing white grievance as the greatest threats to our democracy. Here’s Wrongo on social cohesion:

“In the past, we had a set of unwritten expectations that members of our society were expected to comply with, like voting, paying taxes, and displaying tolerance for others. Even those deminimus expectations are fraying today.”

The COVID pandemic has many here and abroad saying the US is a failed state. George Packer argued this recently in the Atlantic. The Department of Homeland Security (DHS) says calling America a failed state is:

“…not only wrong, it’s irresponsible at best and dangerous at worst…. So stop saying that.

Ok DHS, the US isn’t a failed state, but we may be a failed society. We seem to have decided that while we have the means to succeed, we no longer want to try. From Duck of Minerva:

“Failed states lack the resources, equipment, and government capacity to provide public safety and public services. States like Somalia, South Sudan, and Yemen fit this description. The governments of these countries can often barely project authority beyond the walls of their government buildings.”

This doesn’t describe America. We are the wealthiest, most powerful country on earth. We’re home to more Nobel laureates than any country. Our universities are the envy of the world. Our technology sector is the world’s most dynamic.

We’ve lost the will to use our vast strengths to make America a better place for its citizens. If America had the will, we would have blunted the COVID-19 threat, as have New Zealand, South Korea and Germany. Those countries all have far more social cohesion than the US.

And while it’s true that Trump has failed the country, our society no longer feels that we have responsibilities to each other, or to the nation. We have lost the willingness to make personal sacrifices for the good of the community.

Individualism is a crucial part of our national ethos, but it has morphed into selfishness precisely when we need to see ourselves as all in this together. The result is that we’ve shown that we’re incapable of mobilizing the capacity to address the worst threat to public safety of the 21st century.

COVID is the just the third major crisis in the 21st century.

The first was 9/11. Back then, rural America didn’t see New York City as filled with immigrants and liberals who deserved their fate, but as a place that had taken a hit for the rest of us. America’s reflex was to mourn, and mobilize to help. The ensuing Iraq War and partisan politics erased much of that sense of national unity, and fed a bitterness toward the political class that hasn’t faded.

The second crisis was the Great Recession. Starting out, Congress passed a bipartisan bailout bill that saved the financial system. Outgoing Bush administration officials largely cooperated with incoming Obama administration officials. The lasting economic pain of the Great Recession was felt only by people who had lost their jobs, homes, and retirement savings. Many have never recovered, and inequality has grown worse.

This second crisis drove a wedge between Americans: Between the upper and lower classes, between Republicans and Democrats, metropolitan and rural people, the native-born and immigrants, ordinary people and their leaders. Social bonds had been under growing strain for several decades, and now they began to tear. The lasting effect was increased polarization and discredited governmental authority.

Self-pity turned to anger. Anger at Muslims or Mexicans or gays or fancy-pants city folks (or all of them mashed together) offset by a group identity of white grievance. America’s tone changed to defiant anger and hostility.

This was the American landscape that the Coronavirus found: In the cities and suburbs, globally connected desk workers were dependent on the essentials, a class of precarious and invisible service workers. In rural America, it found hollowed-out towns in revolt against the cities. In Washington, Corona found a government that had lost its ability to rally, or work together for the common good.

In America’s president, Corona happily found Donald Trump, the perfect fit for this decaying society. When a corrupt minority rules a dissatisfied majority, there are consequences.

We have literally fallen on our asses. So much damage in a relatively short period of time. Our republic is much flimsier than we thought.

We need a second period of reconstruction in America. The first reconstruction failed because our society failed it. The second reconstruction must fix our failed society.

It will be long and difficult.

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Can America Avoid Becoming a Failed State?

The Daily Escape:

Fall sunset, Shenandoah NP, VA – photo by juliend73

Sorry, but this column is going to be a downer.

We’ve been talking for the past few days about how hard it is to get politicians to focus on fixing what’s wrong in America. Wrongo originally started down this path in 2009. His plan was to lay out the problems, and to suggest ways in which America might fix them.

But 11 years later, little of what has been suggested here has occurred. Explaining what’s wrong has made very little difference.

Our really big problems now seem to be locked in: Climate change will happen. We can’t (or won’t) deal with the burgeoning disinformation platforms that threaten civil society. It’s difficult to see what will change our growing income inequality. As always, politicians are itching for a fight with some country. Today, the villain is China. Globalization has won, our supply chains now hold us hostage, and our economic future is increasingly controlled by Asia.

America is fast becoming a failed state: Our president tells people to drink bleach. There are more than 100,000 dead in the pandemic, and a significant percentage of them probably were needless deaths.

We have the ability to deal with the crises,but we’re choosing not to. Trump and McConnell, along with Biden, Pelosi and Schumer, all have access to the same, or more likely better information than we do.

They are choosing to ignore that the country is going to hell. Instead, they use each individual crisis for their own political benefit, and for their patrons’ financial benefit. They choose to ignore the near-certainty of a second wave of infections in the fall of 2020, bringing with it the possibility of a second economic collapse, along with more deaths.

We no longer provide the basics for our citizens. We live in a nation where income, savings, happiness, trust in government, and social cohesion are all in free-fall.

This is a recipe for social collapse.

In America most infrastructure is decrepit, from airports, to schools, to roads, because there hasn’t been much public investment. That’s because Americans don’t want to pay higher taxes like the Europeans do. Politicians on both sides still believe the evidence-free ideology of neoliberalism: We’ll all be rich if we invest in nothing, and wait for Mr. Market to correctly allocate resources.

No one cares about anyone else. Nobody will support any group’s pursuit of any goal unless it is also their goal. American life is becoming purely individualistic, adversarial, and acquisitive.

We haven’t invested in the systems that provide healthcare, education, retirement, and childcare. As a result, the average American family now goes without many of these things, since they’re priced out unless they have high paying jobs.

We pay absurd prices for health care. Having a child? That’ll be $50K. An operation? It will cost about what you would pay for a starter home. If she didn’t have health insurance, Wrongo’s daughter’s medication would cost $10,250/month. These basics of life are affordable in the rest of the rich world, but in America, they cost more than the average person can pay.

The average American now dies with $62k in debt. Life has become a sequence of unrepayable loans. Student debt becomes credit card debt and a mortgage, which leads to medical debt. These forms of debt define life in America. The average American is now a poor person, in the sense that they barely make enough to pay for the basics of life. Today, 80% of Americans live paycheck to paycheck, struggle to pay their basic bills, and 63% can’t raise $500 for an emergency.

These are the statistics of a nation that is descending into poverty.

Can it be fixed? Sure, but who’s going to pay for it? If taxes can’t be raised, if deficits can’t grow, what will happen? Nothing.

Except that we will move closer to a collapse. Our leaders say it’s because there isn’t an alternative. They say that we don’t have the money to pay for the changes we want. 70% of Americans say they want decent healthcare, retirement, and education, but they never vote for it.

Not even when it is offered during the primaries.

And it’s never offered in the general election, because nobody will vote for higher taxes to fund a functioning society. The idea simply isn’t acceptable to either of our political parties.

Wrongo’s decade of writing about what’s wrong hasn’t changed anything. Change requires a commitment to taking political risks, and massive voter turnout.

Otherwise, same old, same old is the path to our society’s destruction.

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Churchill’s Lessons For Our Time

The Daily Escape:

Algodones Dunes, CA – 2020 photo by _christopherjs. The Algodones Dunes cover 1,000 square miles of Sonoran Desert, making it the largest dune system in the US.

Wrongo fears that some of our country’s problems may be intractable. Blog reader Fred VK agrees:

“I’ve been distressed lately by how seemingly brain dead so much of the US population seems, not only regarding COVID-19 but more, the fragile state of our nation and what the forces of Trump have done and are doing. Some say we will never get back due mostly to lack of resolve. Years ago, I developed this notion that Americans were so complacent about our country and government because they believed that everything was so set in stone that nothing could shake it and that the republic was good to go as is forever.”

Things aren’t set in stone, and they don’t go to hell in a straight line, But from where we stand today, it’s questionable whether America can (or will) be able to solve its biggest problems.

So the question is: What should we be doing when we live in a country where you know bad things will continue to happen, and you can’t stop them?

Worse, in the time of COVID-19, we’re seeing that our efforts to prevent, or to moderate what’s wrong are failing. It’s worth considering that all of our efforts are barely slowing down the worst of what is happening to the climate, to inequality, to the re-emergence of racism, and the rising threat that factionalism presents. For many of us this hits home. We or our loved ones are among those suffering: losing our lives, homes, livelihoods, or living in despair.

We are far from the first to contemplate a civilization’s decline. From Ian Welsh: (emphasis by Wrongo)

“The Roman Empire went through multiple periods of decline…stoics and epicureans debated how to live the good life in an evil world. The Chinese practically had dealing with declining and corrupt imperial eras and warring…periods down to an art: When no good could be done in the world, one returned to one’s private life to write poetry, drink wine, and care for those close to one while refusing as much as possible to be complicit in the evil of the times.”

Words to live by: Avoid being complicit in the evil of the times. This can’t all be blamed on Republicans, but they are primarily responsible for the wrong that’s occurred in America since the 1980s. Can we work together to pull out of our current nose dive? It will require far better leadership than we have now.

Wrongo is reading Erik Larson’s book about Churchill and the Blitz. Larson focuses on Churchill’s first year as prime minister. On his first day, Hitler invaded Holland and Belgium. Dunkirk was only two weeks away, and the blitz was about to begin.

Britain was woefully unprepared. They had just 45 fighter aircraft when Churchill took office, and no one thought Britain could hold out for long against the Nazis. Churchill managed to convince the British people of the “art of being fearless”. He bludgeoned his government and the military on to the same page. Many in England wanted to concede Europe to Hitler, if that meant even a temporary peace, and they had to be brought to see the fight was worth having.

This picture is from a London library during the blitz. It is also the frontispiece in Larson’s book, and shows how people try to normalize even under the worst of circumstances:

Via Shorpy

But we should no longer normalize. Churchill was able to bring his country together despite all the factionalism, and we must make that our goal. Reading Larson’s book puts our own political dysfunction in focus. It’s clear that today, when the stakes are very high (not as high as England in WWII), we also need robust and top quality leaders.

What is our job as citizens, if leadership is to be the difference? Wrongo isn’t saying we shouldn’t fight the big fights. The best way to lose the big fights is to not fight.

We need to cajole, or force if necessary, a few of our politicians to step forward and be the heroes we need.

Many heroes have emerged as the COVID-19 fight has unfolded. We’ve seen good people brought closer together. We’ve felt the pain that comes when we know we must transition from a weaker to a stronger place, but we know we’re not where we need to be.

Sadly, few if any of our current heroes have been politicians.

Some of them need to step forward, and take the chance to be the leader who can teach Americans the “art of being fearless” much like Churchill taught the British.

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Biden Isn’t FDR, But FDR’s 1932 Strategy Could Work

The Daily Escape:

Sunset, Poudre River trail, Fort Collins, CO – May 2020 photo by Dariusva07. Looks like a painting.

Livia Gershon has an article in JSTOR Daily, “One Parallel for the Coronavirus Crisis? The Great Depression”. She focuses on the question of whether America is already in a depression, or if are we sitting in the equivalent of 1928 or 1929? From Gershon:

“Today’s soaring unemployment, small business failures, and uncertainty about the future are like nothing most of us have seen in our lifetimes. If there’s any useful historical parallel, it might be the Great Depression.”

The cliff that our economy just dove off is different from what America experienced in the Great Depression. From 1920 through 1933, America had Prohibition. The 1920’s were a time of unbridled capitalism, and many working class Americans were hurting financially.

In 2020, COVID-19 has hit us fast and hard. Today’s economic crisis is the result of deliberate choices by governments and individuals to restrict commercial activity. However, the results look about the same: Businesses shuttered, families worried about where their next rent payment is coming from, long lines at food banks. And the 100,000+ deaths.

In 1929, life in America was already awful for a lot of people: Businesses had few regulations to constrain their activities. The rich got much richer. Pro-worker policies had little political traction. That all changed after the Depression. By the 1940s, the country’s unions were stronger than they’d ever been and Congress had passed unprecedented economic policies to support workers.

It didn’t happen quickly or easily. FDR beat Hoover in a landslide in 1932. Hoover had won over 58% of the popular vote in the 1928 presidential election, but in 1932, his share of the popular vote declined to about 40%. Democrats kept control of the House, and gained control of the Senate, bringing 12 years of Republican Congressional leadership to an end.

Erik Loomis, a labor historian at the University of Rhode Island and blogger at Lawyers, Guns & Money, offered Gershon historical perspective:

“A lot of Roosevelt’s campaign in ’32 is ‘I’m not Herbert Hoover’….It’s not policy-driven, not about organizing the masses…..In fact, if FDR had been a left-wing figure, he couldn’t possibly have won the nomination of the 1932 Democratic Party, which, like the Republican Party, was deeply beholden to big corporations.”

And today we see Biden, with his man cave presidential campaign, running as “I’m not Trump”. And while he’s not policy-free, his Democratic party is still beholden to big business, much like FDR’s.

Many Democrats worry about Biden’s ability to stand up to Trump on the campaign trail. FDR, despite his polio disability, deliberately chose to present himself vigorously, including breaking precedent by flying to Chicago during the 1932 convention. His campaign song, “Happy Days Are Here Again” remains one of the most popular in American political history.

Biden may also need to consider breaking a few precedents, possibly by running a throwback front porch type of campaign, one that ignores Donald Trump. James A. Garfield, Benjamin Harrison, and William McKinley all ran successful front porch campaigns.

Returning to FDR’s efforts to turn the country around, Gershon says:

“…the major New Deal programs—including public hiring through the Works Progress Administration, Social Security’s old age and unemployment insurance, the NLRA, and progressive taxes—largely followed ideas that had been brewing on the liberal side of mainstream political conversations for decades. To many policymakers, relief for workers was a way of supporting capitalism. It powered the economy by encouraging consumer spending.”

She further quotes Loomis:

“When those measures are passed in the ‘30s, the left considers them all sell-out measures…FDR is heavily criticized on the left.”

In the 1930s, as today, the left wanted more radical pro-worker, and pro-family policies that were a bridge too far for FDR. Today is similar to the 1930’s. As much as Democrats want to run on policy, the candidate (and who the opponent is) are at least as important as policy.

Biden can run on a message of “I’m not Trump. He’s failing. And I won’t fail“. He and the Party can mostly save the details for after the election. For example: Running on some variant of Medicare for all (M4A) isn’t necessary. All Biden must drive home is that COVID-19 has proven that the current private insurance-powered healthcare system has failed us, and that we need reform.

Then impress on voters that the GOP vehemently supports the failed current health insurance model.

Once elected, Biden could push for M4A, assuming he has the Senate.

2020 isn’t 1932, and Biden certainly isn’t FDR. But there are political lessons to be learned from taking a look back in time.

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Monday Wake Up Call – May 18, 2020

The Daily Escape:

Colorado River, from South Kaibab trail, Grand Canyon NP, AZ  – photo by DJ Memering. The bridge is called the Black Suspension Bridge. It is 5,260 ft below the canyon rim.

The CARES Act was sold as emergency funding for individuals and small businesses. In all, Congress has authorized $3.3 trillion in coronavirus relief in four separate acts over the last two months. The stated intent of those bills was to protect the American economy from long-term harm caused by the overall impact of the virus.

Alas, Congress also took care of their true constituents, Big Oil and other fossil fuel companies. Those companies got CARES Act tax breaks. The subsidies were supposed to help bail out small businesses pounded by the pandemic, but at least $1.9 billion of it was sent to fossil fuel companies and their executives.

Bloomberg News reports:

“$1.9 billion in CARES Act tax benefits are being claimed by at least 37 oil companies, service firms, and contractors”

Bloomberg used the example of Diamond Offshore Drilling Inc. who manipulated the bailout: (emphasis by Wrongo)

“As it headed toward bankruptcy, Diamond Offshore Drilling Inc. took advantage of a little-noticed provision in the stimulus bill Congress passed in March to get a $9.7 million tax refund. Then, it asked a bankruptcy judge to authorize the same amount as bonuses to nine executives.”

But, Diamond’s refund wasn’t all. Some went to their larger competitors. More from Bloomberg:

“…$55 million for Denver-based Antero Midstream Corp., $41.2 million for supplier Oil States International Inc. and $96 million for Oklahoma-based producer Devon Energy Corp.”

In addition, Kevin Crowley reports that Marathon Oil got $411m, Occidental $195m, and Valero $110m.

Hats off to all of our Senators, Congresscritters and the Trump administration! They all continue pursuing a pro-fossil fuel agenda, even as the economic disaster of the pandemic unfolds. Bernie Sanders tweeted:

“Good thing President Trump is looking out for the real victims of the coronavirus: fossil fuel executives,”

But, Bernie apparently voted for the bill, which passed the Senate in a unanimous vote. Hypocrisy much, Bernie?

These loopholes in the Act were deliberately written in so that corporations could feed at the trough along with small businesses, and we the people. Moreover, the initial bill was written in the House, although presumably in consultation with Trump and the Republicans. So, you can view this as either the cost of doing business for Democrats, or as just another day at the office listening to the lobbyists. Subsidy legislation has been a bipartisan objective.

Its always been this way. Here’s a cartoon from 1920 that could be drawn today:

Let’s remember that a big issue was the requirement for oversight, particularly after Trump said he wasn’t interested in having any. A compromise was struck so that an oversight commission could be empaneled to keep track of how the money was spent.

Today, it remains without a leader. Four of the five members of the Congressional Oversight Commission have been appointed, but Speaker Nancy Pelosi, (D-CA) and Senate Majority Leader Mitch McConnell, (R-KY) have not agreed on a chair.

While the current members of the panel can perform some oversight, without a leader, it can’t hire staff or set up office space. In addition, the four members have not met as a group since the economic rescue law was passed. The PBS NewsHour quotes John Coates, a professor of law and economics at Harvard Law School:

“If the commission is not functioning — which it is not — then there is no oversight on a huge part of the economic rescue law…”

We seem to be able to bail out the rich every few decades, and we always seem to do it on the backs of the poor. It will probably happen again in another 10 years or so. Between these bailouts, politicians and pundits appear on all of the news shows, and write very serious articles proclaiming the need to resist socialism and to preserve “the free market” for the sake of “wealth creation and innovation”.

Time to wake up America! This great con has been going on for all of Wrongo’s lifetime and by looking at the cartoon above, for a few lifetimes before. Yet voters seem to be oblivious to this insidious form of corruption each and every time they go to the polls.

To help America wake up, let’s listen to Drive by Truckers, and their tune “Armageddon’s Back in Town” from their 2020 album, “The Unraveling

Sample Lyric:

There’ll be no healing
From the art of double-dealing
Armageddon’s back in town again

Those who read the Wrongologist in email can view the video here.

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Saturday Soother, Economic Damage Edition – May 16, 2020

The Daily Escape:

View of grasslands, south of Denver, CO – 2020 photo by crappydenverphotog

Happy Saturday fellow disease vectors!

Jerome Powell, the Chairman of the Federal Reserve said on Wednesday that the effects of the pandemic could permanently damage the economy if Congress and the White House did not provide sufficient financial support. Job losses average 25% currently, and are higher in some states.

Powell thinks the country needs more funding for the segments of the economy that are seriously underwater. While the House has offered up a plan for new money, Mitch McConnell says he’s far from interested in new money for the states, or those who are out of work.

We can’t say often enough how badly federal leadership has failed us throughout this crisis.

In the executive branch, we’ve seen incompetence and political ideology overwhelm what little crisis leadership there might have been. Test kits were available from the WHO in January, but the CDC choose not to use them. Then, their own tests didn’t work.

Testing was deliberately limited by the administration as disease transmission grew, and the virus escaped early containment. Supplies of PPE were not allocated to hospitals according to need. And, no federal system to manage the global medical supply chains exists, despite every governor saying it’s needed.

Congress wasn’t much better. Action was marred by politics, and a misunderstanding of the economic issues. Instead of simply replacing lost wages, the SBA issued rules that firms found difficult to comply with. Banks gave preference to their big clients, and the money soon ran out. The effort to save the economy by pouring money into it through conventional channels was inadequate, inefficient, and in some cases, corrupt. The only thing that can be said is that it was better than doing nothing.

The push to reopen the economy is premature. Some state governments facing fiscal disaster are reopening. Georgia, for example, has now lost the jobs of 39.5% of those who were employed in February 2020. It is unclear that closed retail businesses can be profitable when reopened, since their capacity will be limited for public health reasons. Right now, many businesses may face bankruptcy.

In any event, rents, mortgages, utility bills and other debts continue to accrue for individuals and businesses. And we found out that 40% of low income households have experienced job losses, compared to 20% overall.

Employees are also potential victims of the reopening. The Trump administration is advising state governments on how to remove workers from unemployment insurance.  Employers can demand workers show up, and if they refuse, they no longer qualify. Why would the workers refuse? Because their workplaces will still be unsafe.

It gets worse: Nearly half of people surveyed by Magnify Money now say they have to draw money from their retirement accounts because of the COVID-19 lockdowns:

The majority of respondents who withdrew funds to cover basic expenses is disheartening. The survey revealed that 60% of respondents used their retirement funds to pay for groceries, 42% spent it on household bills, 31% used it for rent or mortgage payments and 27% used it for debt payments.

Although the scale of the pandemic-caused economic catastrophe was known almost immediately, the Trump administration had limited interest in the health and well-being of the rest of us. Their main interest appeared to be winning the presidency in November.

But you can’t beat something with nothing.

People need help. If they aren’t offered anything good, many will accept something pretty awful, like more Trump for example. Biden is promising a return to the status quo ante, but that’s magical thinking.

The economy wasn’t working for many Americans before the pandemic. Now, the pandemic has taken a sledgehammer to it, and we are looking at what is left. American Capitalism needs to be reformed.

Sorry that we’re entering the weekend on a gloomy note. Since it’s our Saturday Soother, let’s kick back and forget about all that’s weighing us down. Let’s free our minds for a few moments. It’s going to be a spring-like weekend here at the fields of Wrong, so time for more yard work.

To help you settle into the weekend, start by listening to Vaughan Williams composition from 1903, “The Solent”, played by the Royal Liverpool Philharmonic Orchestra, conducted by Paul Daniel.

The Solent is the channel between the Isle of Wight and southern England:

Those who read the Wrongologist in email can view the video here.

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Monday Wake Up Call – What’s Next Edition

The Daily Escape:

Chamisa plants near Abiquiu, NM – photo by zuzofthewolves

(Publishing of daily COVID-19 data is on hold while Wrongo tries to understand inconsistencies in the data)

Trump isn’t wrong to begin thinking about what comes next. At some point, we will again poke our heads out of our burrows, and feel the warmth of sunlight. We’ll attempt to resume the life we had before the virus struck. There are two risks in this: First, will we be back in the swing of things too soon? And second, what should we demand be different, given what the nation has experienced?

In Trump’s view the answer is simple. He wants most people back to work in time to have a robust economy come Election Day. He’s targeted May 1st as the start date for his governor buddies to begin revitalizing the economy.

Once again, the Trump administration is showing itself to be utterly incapable of dealing with this crisis.

He’s moving the country to re-open, despite warnings from public health officials and from most state governors. Here’s a germane comment on Wrongo’s Saturday’s column by long-time blog reader Terry McKenna:

“We really know so little. To begin with, we don’t know how the virus spreads. We are learning but that’s all. In the beginning, we guessed wrong that it was not spread by healthy (asymptomatic) persons. Doctors disagree over the size of the droplets that carry the virus. So we are almost like we were before we had the germ theory where all we can do it isolate.

Also “test” is a simplistic word. Which test? We need a test that tells a clinician that someone had the virus in his system, and a test with a fast result is essential. But a negative test means little, especially in a healthy (asymptomatic) person, because in the absence of a vaccine, that person could be infected next week or next month. So we need a test of antibodies – but even still, we don’t know how long immunity lasts.

And then we have the notion that the president can order the country back to work. Even if a business reopens, who will come? And yes, I know someone will, but imagine the NY Mets having their opening day May 15. Will anyone show up? And if they do, will we see a spike in sickness a few weeks later?

We need time for the science to do its work. We may get lucky, viruses do became less virulent over time (sometimes to re-emerge with vigor).”

A partial re-opening of those portions of the economy that are now shuttered is a risk both to the workers, and to the returning customers. Terry is right to ask if we’ll see a spike in sickness a few weeks later, and if we do, what will be Trump’s plan then?

Broadening out our view, many are starting to think about what needs to be different post-pandemic. As we emerge from this crisis, we have a rare opportunity to focus on change: Do we want a Star Trek, or Blade Runner future? A utopian, or a dystopian one?

As Viet Thanh Nguyen said in the NYT:

“Our real enemy is not the virus but our response to the virus — a response that has been degraded and deformed by the structural inequalities of our society.”

We have a once-in-a-generation opportunity to rebuild for tomorrow. Or will we just prop up the economic and political process that has given us today’s problems? As an example, if we don’t want sick and contagious people trying to go to work, America must have paid sick leave.

During the lead up to passing the CARES Act, Democrats in Congress recognized this, but at the behest of business lobbies, the Act exempted 80% of all workers, including all those working at firms with over 500 employees AND those working at firms with under 50 employees!

Here’s an illuminating chart:

And in America, add $600 for four months for 20% of our workers. This is post-Reagan America. Assistance to the poor and working class is given grudgingly, and with strings attached. The rich and corporations are showered in subsidies since they are too virtuous and important to let fail. MAGA really means “Make Americans Grovel Again”.

What has to die after Covid-19 is the myth that America is the best country on earth. We’re not as healthy as we thought we were. The symptoms — racial and economic inequality, callousness and selfishness, have been covered up by our unquestioned acceptance of American Exceptionalism.

We’ve lost our right to that view, despite the many, many small acts of heroism every day by health workers and all the “essential” hourly workers who face becoming infected every day.

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Monday Wake Up Call – April 6, 2020

The Daily Escape:

Texas bluebonnets, Round Rock, TX – 2018 photo by dried_fruit

Here are the latest national numbers (which will be out of date by the time you read them). From The COVID Tracking Project: (as of 4/4)

  • Number of daily cases: 305,755, up 33,767 or +12.4% vs. April 3
  • Rate of case increase: 12.4% vs. 13.75% on 4/3 and 15% average for the past week
  • Number of deaths: Total 8,314, up 1,352 vs. April 3
  • Rate of deaths increase 4/4 vs 4/3: 19.4% % vs. 20.4% on 4/3
  • Daily number of tests 4/4 vs. 4/3: 1,623,807, up 226,945 over 4/3
  • Rate of increase in tests: +16.2% vs. previous day

The rates of growth in cases and deaths have begun to slow. In the past week, they are in a decelerating trend, declining by about 1%/day. Testing is growing, which is a very good thing.

Just when you think you can’t get any more cynical about America’s response to the pandemic, we tumble to the fact that about a third of hospital emergency rooms are now staffed by doctors on the payrolls of two physician staffing companies, TeamHealth and Envision Health. They are owned by two Wall Street private equity firms. Envision Healthcare employs 69,000 healthcare workers nationwide while TeamHealth employs 20,000. Private equity firm Blackstone Group owns TeamHealth; Kravis Kohlberg Roberts (KKR) owns Envision. Private equity is the term for a large unregulated pool of money run by financiers who use that money to invest in, lend to, and/or buy companies and restructure them.

Wrongo began hearing that despite the urgent pleas from hospitals on the front lines of the COVOID-19 outbreak, nurses and doctors were being taken off schedules in nearby places once “elective” procedures were suspended, as they are at many hospitals and clinics. That means the associated revenues were lost, or at the very least, postponed.

Here’s a report from Yahoo Finance:

“KKR & Co.-backed Envision, which carries over $7 billion of debt amassed through one of the biggest leveraged buyouts in recent years, reported steep drops at its care facilities. In just two weeks, it suffered declines of 65% to 75% in business at its 168 open ambulatory surgical centers, compared to the same period last year, the company said in a private report to investors. About 90 centers are closed.”

Private equity has taken over more and more of hospital staffing, including emergency departments. The legal fig leaf that allows private equity firms like Blackstone and KKR to play doctor is that their deals are structured so that an individual MD or group of MDs is the nominal owner of the specialty practice, even though the business is stripped of its assets. The practices’ operating contracts are widely believed to strip the MDs of any say in management.

Care of the sick is not the mission of these companies; their mission is to make profits for the private equity firms and its investors. In 2018, Paladin Healthcare, an entity owned by private equity baron Joel Freedman, bought Philadelphia’s Hahnemann University Hospital. This hospital served the poor, and Freedman closed it down so he could use the land to build luxury apartments.

When the city recently asked to use the empty hospital as part of its solution for the Coronavirus pandemic, Freedman demanded $1M/month in rent. Overcharging patients and insurance companies for providing urgent and desperately needed emergency medical care is bad enough. But holding a city hostage?

In another example, STAT reports on another private equity firm: (emphasis by Wrongo)

“Alteon Health, which employs about 1,700 emergency medicine doctors and other physicians who staff hospital emergency rooms across the country, announced it would suspend paid time off, matching contributions to employees’ 401(K) retirement accounts, and discretionary bonuses in response to the pandemic…The company also said it would reduce some clinicians’ hours to the minimum required to maintain health insurance coverage, and that it would convert some salaried employees to hourly status for “maximum staffing flexibility.”

NY’s Governor Cuomo and others are pleading to have doctors come out of retirement, and here we have skilled doctors who have the training and are being asked to work fewer hours? All of the Republican talk about “choice” and “markets” in healthcare is just self-serving BS that benefits their buddies.

Time to wake up America!

Why do private equity firms continue to benefit from the “carried interest” tax loophole? Shouldn’t they shoulder their part of the financial grief the pandemic is causing to our country?

To help you wake up, here is John Lennon’s 1970 song, “Isolation”. It appeared on John Lennon/Plastic Ono Band. It has a whole new meaning in today’s context:

Sample Lyric:

We’re afraid of everyone,

Afraid of the sun.

Isolation

The sun will never disappear,

But the world may not have many years.

Isolation.

Those who read the Wrongologist in email can view the video here. 

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Monday Wake Up Call – March 23, 2020

The Daily Escape:

Great Wave off Kanagawa – Japanese woodblock print by Hokusai c. 1829. The wave could represent a tsunami of COVID-19 cases, or could it represent the rising of malign intent by Trump towards our democracy?

Are we in the midst of a national emergency or not? Is a tsunami of COVID-19 cases about to inundate America, or not? Let Wrongo answer: It’s a national emergency. When there’s a national emergency, does the federal government let the states take care of the problem? It does not.

Here’s America’s worst excuse for a leader on twitter Sunday afternoon:

He says it’s not the federal government’s job to lead in a national emergency. As Haberman and Baker said in the NYT: (emphasis by Wrongo)

“For years, skeptics expressed concern about how he would handle a genuine crisis threatening the nation, and now they know.”

Any other president, even the weakest, would have acted differently. Despite the fact that his policies are generally pretty standard right-wing Republican, Trump has managed to make a national disaster worse than it had to be.

Now all Americans should know how it feels to be Puerto Rican.

Bloomberg reports that Trump’s directive for governors to buy their own medical supplies to fight the coronavirus ran into a big problem when the federal government outbid them for the products! Earlier that day, Trump said that his administration is not a “shipping clerk” for medical gear that the states require to fight the virus.

Another example from the NYT: (emphasis and brackets by Wrongo)

“…on Saturday {Trump] sought to assure an anxious American public that help was on the way…and that private companies had agreed to provide desperately needed medical supplies to fight the fast-spreading coronavirus.

But Mr. Trump [said] he would not compel companies to make face masks and other gear to protect front-line health workers from the virus….. Mr. Trump said the clothing company Hanes was among those that had been enlisted to start churning out masks, although the company said they would not be the N-95 masks that are most effective in protecting medical workers.”

Trump could simply order companies like Hanes to make them, but instead, Hanes is making masks that don’t actually protect medical personnel. Capitalism @ work!  At a time of national emergency, Trump is letting the market do it, and simply declaring victory.

Another: In the on-going (Sunday) negotiations on the Coronavirus bail-out package, it turns out that Treasury Secretary Mnuchin and the White House are demanding that the relief package include $500 billion to be provided to corporations at the discretion of Treasury Secretary Steve Mnuchin.

The best part is that it permits the Treasury secretary to withhold the names of corporate recipients for up to six months. How is it possible to use taxpayer money for corporate bailouts and demand that taxpayers can’t know who’s received the funds?

Finally, here’s an example where Trump is unhappily, showing leadership. He wants to suspend habeas corpus, the Constitutional right to appear before a judge after arrest, and seek release:

“The Justice Department has quietly asked Congress for the ability to ask chief judges to detain people indefinitely without trial during emergencies — part of a push for new powers that comes as the coronavirus spreads through the US.”

The DOJ is looking for broad authority, including the ability to ask chief judges to detain people and to pause court proceedings during emergencies. It would apply to:

“any statutes or rules of procedure otherwise affecting pre-arrest, post-arrest, pre-trial, trial, and post-trial procedures in criminal and juvenile proceedings and all civil process and proceedings,”

This means you could be arrested and not brought before a judge until they decide that the emergency or the civil disobedience is over. Shouldn’t we be even more careful about granting new powers to the government if we’re in a national emergency?

We can hope that the House will block this nonsense.

We should remember that the US government was founded for the very purpose of solving some rather serious problems that the individual states couldn’t handle. That role of federal leadership has worked for 230+ years, but that doesn’t work for Trump.

You should be asking why.

It seems certain that at some point, Trump will say that the states were unable to solve the virus emergency, so he’s stepping in. He’ll try to use COVID-19 to assume extraordinary emergency powers between now and the election. That’s beyond frightening.

More will die because Trump won’t lead in the fight to contain the Coronavirus. And in the background, he’s busy laying the groundwork for emergency powers.

Wake up Democrats!

It’s time to ask, what are the DC Democrats doing to block all of this?

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