Social Safety Net – Page 4 – The Wrongologist

Monday Wake Up Call, Minimum Wage Edition – March 8, 2021

The Daily Escape:

Point Betsie Lighthouse via Michigan Nut Photography

At the risk of wearing you out about the minimum wage, there are a few more things to consider. The Brookings Institution found that more than 23.8 million people made less than $15 per hour in 2019, according to an analysis of census data.

This is useful, because the actual working population earning the minimum wage or less was only 1.1 million workers in 2020. The larger population is a better approximation of the number who would see a wage hike under the proposal.

By state, of the 23.8 million people who make less than the proposed minimum wage, around 12.4 million (52%) live in the 22 states with two Republican senators. By contrast, 7.3 million (31%) live in the 23 states that have two Democratic senators. The remaining 4.2 million live either in states with one senator from each party or, in DC. Here’s a handy map:

This makes it clear that while low-wage work is everywhere, the worst effects are concentrated in the south and Midwest. Nine states already have passed some form of ramp to a $15/hour minimum wage. While a number of red states have raised their minimum wage, Florida is the only one on track to $15.

Opposition to raising the minimum wage to $15/hour is mostly Republican. All Senate Republicans voted against it, along with eight Democratic Senators who voted against including it in the newly passed Covid relief bill. Kyrsten Sinema (D-AZ) is one Dem who voted against it, even though Arizona has already passed one of the highest minimum wages in the country ($12.00). The question is why would Sinema deny the same benefit to others.

And no Republican Senators, not even the few with populist pretensions, have endorsed a $15 minimum wage. This is despite the fact that the policy commands supermajority support in opinion polls. Republicans oppose it saying that it will cause small business job loss. But data are not conclusive on this point. Regardless, the GOP sees its “populist” base as business owners of different sizes.

But there are far more workers in the US than there are small-business owners. Condemning a large swath of the workforce to economic precarity so that a much smaller strata can keep mining profits won’t improve America’s general welfare.

The map showing states’ share of minimum wage workers also correlates with the states that take the most out of the US Treasury via the Earned Income Tax Credit. So those states take tax money from the blue states to pay their low wage workers welfare, while their Republican leaders call the blue states sending their tax dollars, socialist.

And they also refuse to make their business owners pay their own citizens a living wage. Most Republican Senators could not care less about our lowest paid workers. And, in general, the real costs of supporting their lowest paid workers are borne by taxpayers.

These Senators fall into two categories: One says of course, he and his wonderful colleagues across the aisle favor a higher minimum wage, who wouldn’t? But maybe not that high, maybe a little lower, who knows, but not $15.

The other says of course he favors a $15 minimum wage, who wouldn’t? But, sadly, this just isn’t the time. Maybe tomorrow? Maybe next week? Maybe in 20 years? But for sure, now isn’t the right time, Covid you know.

Time to wake up America! The time is now to pass an increased minimum wage. And $15 should be the floor, not the ceiling. To help you wake up, we turn to Bunny Wailer, who died last week. Now, all the original members of Bob Marley and the Wailers are gone.

“Blackheart Man” is the debut album by Bunny, released in 1976. He’s joined here by Bob Marley and Peter Tosh of The Wailers on backing vocals, and the Wailers rhythm section on some tracks. Let’s listen to “Dreamland”, his song of repatriation, from the album:

Lyric:

There’s a land that I have heard about

So far across the sea.

There’s a land that I have heard about

So far across the sea.

To have you on my dreamland

Would be like heaven to me.

To have you on my dreamland

Would be like heaven to me.

Oh, what a time that will be,

Oh, just to wait, wait, wait and see!

We’ll count the stars up in the sky

And surely, we’ll never die.

And surely we’ll never die.

If the Covid Relief Bill Passes, Who Wins?

The Daily Escape:

Sedona, AZ – 2021 photo by jess.kesti96

Republicans are closing ranks against Democrats’ proposed $1.9 trillion COVID-19 relief bill. Despite thin majorities in both Houses of Congress, Democrats are poised to start by pushing it through the House today.

The Senate may be another matter, as changes to the bill seem likely. Specifically, the $15/hour minimum wage may not be in the final version of the bill. And it appears that there will be little or no Republican support in either House. Not one Republican in either chamber has officially announced that they are backing the legislation.

From Politico: (Brackets by Wrongo)

“Instead, Republicans are…foisting blame on Biden for shutting them out of the legislative process and hammering Democrats over the slow pace of school reopenings across the country — an issue they think will become a potent political weapon, particularly in key suburban battlegrounds….On Tuesday, Senate GOP leaders devoted most of their weekly press conference to the school reopening debate. [Sen. John] Thune said Democrats seem more interested in money for Planned Parenthood “than they are about getting kids back into class,” while Sen. John Barrasso said Biden “has surrendered to the teachers’ union.”

Voting against the relief bill is a unity test for the GOP following their bitter infighting after the Capitol riots and last month’s impeachment vote. But Republicans are playing a dangerous game. The pandemic has killed over a half-million people and damaged the economy by throwing millions out of work. And people like the bill, although the Republicans oppose it.

In this case, while the bill is controversial in Washington, there is little disagreement about it anywhere else in the country. In fact, a substantial majority support the bill: 66% of adults and 65% of registered voters. The chart below is from a new Economist /YouGov Poll, conducted between February 19 and 22 of 1,500 adults (including 1,201 registered voters). The margin of error for adults is 2.7 points, and for registered voters is 3 points:

The data say that the bill is consistently popular across all age and gender groups, with only a plurality of Republicans objecting to it. A Quinnipiac poll similarly found that 68% support the rescue package, and 78 % support its $1,400 relief checks.

The Republicans have tried to discredit the bill, but their efforts haven’t been effective. They’ve complained about the overall size of the stimulus, and that too many people will be helped. They’re against assistance to state and local governments, saying that most of it may go to cities and states where there are lots of Democrats. But little in their arguments seems to be persuading many voters.

In fact, the bill is one of the more popular pieces of major legislation in recent US history. That demonstrates how small the risk is for Democrats, even if they get zero Republican votes for the aid package in either the Senate or the House.

To its eternal credit, the Biden administration has made it plain that it will go it alone if needs be. So far, it has waved off half-measures like the alternative proposal on the minimum wage proposed by Republican Sens. Mitt Romney and Tom Cotton.

To be passed under the reconciliation process by the Senate, the minimum wage increase would have had to survive a ruling by the Senate parliamentarian that it complies with the Byrd Rule. That rule requires that each part of the bill must produce a significant effect on federal spending, revenues, and the debt within 10 years. However, the Senate parliamentarian ruled Thursday evening that the provision to increase the minimum wage to $15/hour cannot be included in the broader relief bill.

Now, it’s likely that any increase in the minimum wage will need bipartisan support, since it can’t be passed with a simple Senate majority that Democrats are planning to use for the stimulus bill.

Even without the minimum wage, Republicans are betting that the voters won’t punish them in the 2022 mid-term election for opposing it. They may be wrong, especially if Republicans in the Senate can either block the bill, or substantially reduce its benefits.

They could also turn out to be right if the Biden administration mis-handles the roll-out of stimulus funds. But voters have long memories if you try to take money out of their pockets.

It’s vital for Biden & Co. to show Americans early on that it’s possible for them to get what they voted for. While there are many things on Biden’s agenda that will require compromise, they should push this one through.

COVID-19 relief is controversial in Washington. Everyone knows that the Republicans aren’t objecting to relief, they’re objecting to this Democratic administration getting off to a successful start.

Georgia and the $2,000 Stimulus Check

The Daily Escape:

Mt Hood with lavender, from upper Hood River Valley, OR – photo by Greg Boratyn

Readers of this blog are well aware of the importance of the US Senate run-off races in Georgia. Democrats Raphael Warnock and Jon Ossoff are facing off against GOP incumbents Kelly Loeffler and David Perdue.

Recent analysis by FiveThirtyEight places Warnock ahead of Loeffler by .1% and Perdue ahead of Ossoff by .8%, but who trusts polls anymore?

Early voting in Georgia has been heavy, with 2.3 million votes already cast. So far, the demographics show that these early voters are skewing younger and more diverse than in the November election. Possibly troubling for Republicans is that people aren’t voting early in traditionally Republican counties like they have in the past. And since the early voting period ends soon because of the New Year holiday, the pressure will be on to boost turnout on Election Day, January 5.

Also possibly helping Democrats is a ruling that two Georgia counties must reverse their decision to purge thousands from voter rolls in advance of the January 5 runoff election. Georgia federal judge Leslie Abrams Gardner said in an order filed late on Monday that these two counties appeared to have improperly relied on unverified change-of-address information to invalidate voter registrations:

“Defendants are enjoined from removing any challenged voters in Ben Hill and Muscogee Counties from the registration lists on the basis of National Change of Address data,”

The judge is the sister of Georgia Democrat Stacey Abrams. Before breaking into a happy dance, it’s good to remember that this order applies to only about 4,000 registrations, the vast majority of which are in Muscogee County. Biden won the county in November.

The runoff has seen record-breaking fundraising. Ossoff and Warnock each have raised more than $100 million in two months, more than their conservative opponents. The Democrats were powered by small donations collected from across the country, with nearly half of the funds coming from people who donated less than $200.

For Perdue and Loeffler, smaller donations accounted for less than 30% of what they raised. However, we need to remember the hard lessons of Jaime Harrison (NC), Sara Gideon (ME), and Amy McGrath (KY). These Democratic candidates out-raised their Republican incumbent opponents, and all lost by double digits in their races.

Ossoff and Warnock are still “sounding the alarm” about their ability to keep pace with GOP spending. They’re calling for a “significant increase” in grassroots donations to prevent them running out of money, as GOP outside groups are outspending Democratic groups.

Both Parties want to shift from TV to direct get-out-the-vote contact in the last days before the election.

But there’s an additional outside force that may play into the results in Georgia. Given the overwhelming popularity of increasing relief checks from $600 to $2,000, Trump has placed Senate Republicans in a brutal position. The House has passed a $2000 relief package, and now it is up to the Senate whether to take it up, or not.

Bernie Sanders (I-VT), is playing this one beautifully:

“Sen. Bernie Sanders will filibuster an override of President Donald Trump’s defense bill veto unless the Senate holds a vote on providing $2,000 direct payments to Americans.”

This puts the ball in Mitch McConnell’s court, and it will be interesting to see where he goes. He seems to have three options:

Call Sanders’s bluff by demanding that Democrats provide enough votes for cloture and the subsequent veto override. McConnell will say that if they fail to do so, he’ll let the Defense bill die while pinning the blame on the Democrats.
Lump the extra stimulus with Trump’s demand for action against the big tech firms. This would push consideration of the measure into the next Congress.
Alternatively, McConnell can hold a vote on the bigger stimulus checks.

On Tuesday McConnell single-handedly blocked consideration of the House $2000 bill, but that was just the first step in a series of Senate parliamentary moves that are likely to take the rest of the week.

Loeffler and Perdue decided to support the extra stimulus. That was an easy call, once they knew McConnell would block it initially. They were joined by Sens Hawley (R-MO), Sen Marco Rubio (R-FL), and Sen Deb Fischer (R-NE). If all Senate Dems support it, they would need seven more Republicans to move forward.

Whether the extra relief bill passes or fails, there’s a winning message for Ossoff and Warnock to hammer: I want $2k, you want $2k, the Democrats in the House want $2k, and the Dems in the Senate want $2k. Heck, even Trump wants $2k. The only people who don’t want you to have $2k are Republicans.

If you don’t vote for the Democrats, you’ll never see any more stimulus money.

That’s the way to turn a loss in the Senate into control of the Senate on January 5.

New Relief Bill Rewards Businesses

The Daily Escape:

Hayden Valley, Yellowstone NP – December 2020 photo by Jack Bell

Politico reports that Congressional leaders are nearing a deal on Covid relief. The deal could be done by the time you read this.

The relief package is divided into two parts. The first bill, with a stated cost of $748 billion, funds the Paycheck Protection Program (PPP), along with $300 per week for unemployment benefits.

The second bill ties liability protections for companies demanded by Republicans to the Democrats’ demand for funding for state and local governments.

The big-ticket items in the first bill include one-time stimulus checks to individuals in the $600 to $700 range, an extension of federal unemployment benefits with an additional weekly amount of $300. There is $325 billion for small businesses, $257 billion for the PPP, some $ billions for vaccines, and to help schools open safely.

Delayed until the New Year is bill two, including money for state and local governments faced with laying off municipal workers, and liability protection for companies that put their employees in danger from the virus through inadequate safety measures. The items in the second bill are what have stalled negotiations for weeks.

Lee Fang of the Intercept reports that the draft of the first bill circulating on Capitol Hill contains several adjustments to the PPP, the centerpiece of the government’s earlier efforts to curb job loss stemming from the pandemic. One of the revisions is a radical change that would result in a major windfall for the highest-income Americans and large corporations. That provision allows businesses claiming expenses reimbursed by PPP forgivable loans, (already tax-free), to also be used as deductions when calculating taxable income.

In other words, the change would allow a corporation that claimed $1 million in PPP reimbursements to also deduct the same $1 million on its tax return, thereby reducing their taxable income by $1 million. Until now, IRS rules prohibited tax-free government grants and reimbursements from being used as deductions. The Intercept quotes Steven Rosenthal from the Tax Policy Center, who estimates that this PPP deduction provision could reduce the taxes of the highest-income taxpayers by at least $100 billion without benefiting workers or the unemployed.

This tax deduction provision technically applies to all PPP recipients, but few will be able to take the additional tax benefit. Wealthy business owners and large corporations claim the lion’s share of business expense deductions. This group would include wealthy doctors and financial consultants, and those who make over $1 million in yearly income.

This tax provision has been pushed by Rep Richard Neal, (D-MA), and Sen Chuck Grassley, (R-IA). There has been little pushback to these tax giveaways, reflecting a general consensus in Congress around the value of more business tax cuts. Lawmakers, including Senate Majority Leader Mitch McConnell, (R-KY), have described the PPP extension and expansion as an “uncontroversial” aspect of stimulus talks.

This should be pretty simple. If you get a PPP loan, and it is later forgiven, the expenses paid with the loan proceeds shouldn’t be deductible. The company didn’t pay taxes on the PPP loan cash proceeds and thus shouldn’t receive a deduction against taxable income for the expenses paid. That’s double-dipping.

The big idea behind PPP loan forgiveness was to help businesses retain employees and pay certain qualified expenses like rent and utilities, not to enrich employers.

Also buried in the bill is another bailout for US Airlines. They stand to get another $17 billion taxpayer-funded bailout if the first bill becomes law. From Wolf Richter:

“Democrats and Republicans may not agree on much of anything these days, but they both love to bail out airline shareholders and bondholders. And that’s what this is – dressed up as payroll protection and airline support program.”

The new airline bailout comes on top of what they received in the original stimulus bill: $25 billion in payroll support, an additional $25 billion in loans for passenger airlines, and over $10 billion in grants and loans for cargo airlines and aviation contractors.

Let’s remember that the top four airlines have burned their cash by repurchasing $45 billion of their shares since 2012. They don’t need more of our money, Chapter 11 bankruptcy works. Delta, American and United have previously restructured in bankruptcy court, and it worked fine. They know how to do that.

And let’s tell it like it is: If there wasn’t a majority of Republicans in the Senate, the people would get the checks and the unemployment relief they really need.

Win in Georgia!

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?

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.

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.

Sunday Cartoon Blogging – May 17, 2020

Wrongo was unaware, but some Catholics are praying to the 2nd century St. Corona (d. C. 170) thinking she’s the patron saint of plagues and epidemics. She, along with St. Victor, a soldier, were tortured and killed around 170 at the order of a Roman judge, according to an account written in the 4th century.

Apparently, this is just another piece of fake news that started on the internet and has been amplified by Twitter. St. Edmund is the go-to saint for epidemics and plagues. St. Corona is actually the patron saint of treasure hunters and maybe, gamblers.

Given the state of the global economy, would it hurt to ask her for something, maybe like a month’s rent? On to cartoons.

What will happen when we re-open?

But how far is up?

Hard to fish when you’re high and dry:

Mitch won’t help:

The guy who doesn’t think America needs testing is gonna get one:

Biden is staying in his basement. Good idea, or bad?

Trump’s new strategy: Obamagate!

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.

It’s the Economy Stupid. Or Is It?

The Daily Escape:

On Tuesday, Trump was in the Rose Garden for a “virtual town hall” on Fox News. The Boston Globe reported that he wants the country “open and raring to go” by Easter, which is less than three weeks away. “I think it’s possible, why not?” he said with a shrug.

Watching Trump do a press conference is like watching the kid who didn’t read the book give his book report.

The top health professionals have called ending social distancing by Easter far too quick. But, Trump compared the potential for Coronavirus fatalities to our annual flu casualties and, to automobile accidents. That led Charlie Pierce to say:

“I can speak with some authority on this. On December 9, I got hit by a car. It has been three months now. Nobody I came into contact with in the aftermath has been hit by a car.”

It’s important to remember that Trump is saying this while we still have no idea how many Americans have, or have had, the virus. It seems safe to say the number is vastly higher than the number of people who have tested positive (nearly 50,000). Here’s a terrifying tweet:

(James Gallagher is the BBC’s Health and science correspondent)

Trump’s “let’s get America back to work” plea comes at a time when we have no idea about the extent of the virus’s impact, or how large the tsunami of cases will be. Trump is sounding a bit like General Buck Turgidson in 1964’s “Dr. Strangelove“:

“I’m not saying we wouldn’t get our hair mussed. But I do say no more than ten to twenty million killed, tops.”

There are operational issues involved in conducting a safe economic restart while the virus remains rampant in the country: It would require testing all who enter the workplace, every time they come to work. Where do those test kits come from when we can’t get enough for America’s hospitals? Who will read the tests and get the data back to the individual and the business? Can social distancing really be practiced at work? In offices?

Obviously there are conflicting opinions about how long to use severe Coronavirus mitigation and suppression measures when the economic consequences of that mitigation could be disastrous. The medical experts can tell us what the consequences of various courses of action are most likely to be in terms of illness and fatalities.

But the willingness to endure the likely costs of a particular course of action is a political, and possibly an ethical question. Last week, Wrongo asked:

“Is restoring our economy, and putting Americans back to work worth a million lives lost? Is it worth 300,000?”

Trump is right both to wrestle with this question, and to be concerned that Coronavirus could end his presidency. Here’s a chart that shows how long prior stock market crashes took to return to the pre-crash level:

This compares three prior crashes and the time it took to recover. Only the 1987 crash was a sharp “V” recovery, and that recovery took nearly two years. Both of the others took four years.

This most likely means Trump can’t run as a peace and prosperity president. He’ll simply be running as another Republican who ran up the debt with the crucial difference that Americans died on the home front on his watch, after trying to go back to work prematurely.

A few words about the attempted bailout. As Wrongo writes this, it’s likely that there may be a “deal” sometime late on Tuesday . The stock market has already closed up more than 2,000 points, or 11% on the hope of a deal.

The bailout deal should absolutely be as big as possible, but Mitch, Trump and the GOP have it wrong. We should be pointing our water hoses where the immediate fire is: Low – moderate income households and small businesses that have a week or two of cash reserves, and little access to credit markets.

While this is an emergency, it’s no excuse for another GOP round of opportunistic, potentially wasteful spending with little oversight. We have more important things to do than setting up a $500 billion Republican slush fund in an election year.

Trump will no doubt make an announcement that “America is again open for business”. But, that’s not really within his power. The economy is not usually like a faucet you can turn off and on.

It also means that Trump’s replacement will have a major job starting in 2021 trying to restore the stock market and the employment level to where they were pre-Coronavirus.

It is the highest duty of the US President to keep the country safe, and protect its people. Trump’s downplaying of what his science and security advisers have told him is doing exactly the opposite.

The Wrongologist

Geopolitics, Power and Political Economy

Category: Social Safety Net