Social Safety Net – Page 4 – The Wrongologist

Sunday Cartoon Blogging – May 16, 2021

Both Houses of Congress have finally agreed to set up a committee to investigate the causes of the January 6th attack on the Capitol. Democrats wanted a Congressional investigation to reveal the causes of the insurrection so Congress could pass laws to prevent it happening again.

Republicans had been blocking its creation. Initially, they wanted to investigate all political violence in the country, including that caused by “Antifa”. Their strategy was that could water down the committee’s report and possibly obscure the role of Trump’s supporters in the insurrection.

The 10-person bipartisan commission will be evenly split between the parties. The Speaker of the House and Senate Majority leader will together appoint five commissioners, including the chair. The House and Senate Minority leaders will appoint the other five commissioners, including the Vice Chair.

Commissioners cannot be current government appointees and must have significant expertise in the areas of law enforcement, civil rights, civil liberties, privacy, intelligence, and cybersecurity.

This might look like a victory for the Democrats, but it isn’t. The Republicans can control the investigation through the committee’s subpoena power. To issue any subpoena, at least 6 members of the committee must agree. This gives the GOP the power to veto calling any witnesses.

It will probably result in a milquetoast committee report. The GOP’s inherent veto over the subpoena process is a flaw that potentially dooms the investigation to failure. On to cartoons.

Same as it ever was:

If the elephant’s trunk was like Pinocchio’s nose:

How business’s view changed from stimulus #1 to #2:

Fox keeps the anti-vax message going:

Market for fake IDs seems to be the gas hoarders:

Will this ever end?

Israel is losing control of the narrative because there are only so many viral videos of brutality that it can dismiss by saying, “Actually this is way more complicated than it looks.” As Caitlin Johnstone says, a nation that cannot exist without nonstop warfare is not a real nation, it’s a military operation with suburbs. This map should tell you that there is no possibility of a two-state solution. Palestine won’t be viable unless large numbers of settlers are removed, and that’s not happening:

More: Back in the Nineties, Netanyahu said that then-Prime Minister Yitzhak Rabin was “against Jewish values” for offering to withdraw from some of the occupied territories in exchange for peace. He led a mock funeral at which his followers brandished signs with Rabin’s head in the crosshairs of a gun. And when Rabin was assassinated by one of Netanyahu’s followers, he said he never condoned violence.

He’s also the guy who hasn’t been able to form a government after four tries, who’s also in danger of going to prison for corruption, assuming he can’t somehow cling to power.

The US has to think carefully about what our role should be in this conflict.

Nomadland Is Best Picture

The Daily Escape:

Desert Lilies, Desert Lily Preserve, Desert Center, CA – photo by Bob Wick for BLM

The film “Nomadland” won best film, best director, and best actress at this year’s Oscars. Wrongo and Ms. Right kept our tradition, and didn’t watch the Oscars, but we have seen the film twice.

If you haven’t seen it , the film is worth your time. It offers a sympathetic view of what’s happening to the American working class in what’s becoming a de-industrialized America. It shows the hollowing out of middle America, and the growing regional inequality that stems from the US economy being concentrated in fewer and fewer corporate hands, and often, in fewer places.

Our changing economy has left wide swaths of rural America in decay. The movie’s story centers on Fern, an older widow. She worked in the US Gypsum plant in Empire, Nevada until the Great Recession reduced demand for drywall, and thus the mine and the plant were closed.

Once the factory went, so did the town. It became so de-populated that it even lost its zip code. Now, Fern, (played by Frances McDormand), sleeps in an old, converted van and works a seasonal job with one of the few employers left in the area: An Amazon shipping center.

But the film isn’t about Amazon. It’s about coping with downward mobility. Fern travels the southwest mountains, working a variety of gig jobs: In addition to Amazon, she’s kitchen help in a Wall Drug. She works at a beet processing plant throwing cases of beets into a hopper. She helps run a small RV park.

The film avoids clichés about the formerly middle-class, mostly White Americans it depicts. None of them blame Black people or immigrants or the left-wing media for their problems. They simply no longer play by the norms of an economy that ruined their lives.

Ironically, these characters don’t follow the usual White working-class stereotypes. Unlike Trump voters interviewed by the media in diners across America, they don’t turn to racism or blind acceptance of patriotism because of their economic uncertainty. Fern and the rest of the characters in “Nomadland” demonstrate dignity, decency, and stoicism in the face of the structural forces grinding them down. They teach each other how to survive while living off grid. They help each other when the chips are down.

Eric Cortellessa at Washington Monthly offers great insight:

“Unlike JD Vance’s flawed Hillbilly Elegy…this film does not blame the victims for their own downward mobility. It doesn’t point to bad habits (drugs and laziness), bad morals (racism and Trumpism), or bad attitudes (toxic masculinity and perverted Christianity). Instead, it shows humble men and women who don’t scapegoat others and who manage to preserve their dignity and, to a large extent, their own personal freedom in the face of systemic forces that are exploiting them.”

Let’s point out that since 1985, the average Wall Street bonus has increased 1,217%, from $13,970 to $184,000 in 2020. If the minimum wage had increased at that rate, it would be $44.12, instead of $7.25. And $7.25 equates to $15,080/year, nowhere near enough to make a payment on the US median home that’s priced at $301,000. It’s not even enough for a tiny dump of a house, like the one Fern left in Empire NV, which probably cost one-third of the median price.

Jessica Bruder, the author of “Nomadland: Surviving America in the Twenty-First Century,” that the movie is based on, wrote over the weekend about her exploration of this growing subculture. Bruder says a scene depicting Fern spending a night in her van when she hears “the knock” is chillingly accurate:

“No overnight parking! You can’t sleep here.”

The knock, Bruder explains, “is a visceral, even existential, threat,” one that nomads try to evade by hiding in plain sight: “Make yourself invisible. Internalize the idea that you’re unwelcome.”

Some places forbid overnight parking. Others outlaw living in a vehicle. Penalties can pile up fast. Unpaid, they can lead to the cruelest punishment of all: Your home gets towed. Failing to pay the impoundment fee means losing your home. Bruder says that people ask her what they can do for the nomads:

“Letting vehicle dwellers exist in peace would be a fine start. Individuals have the power to help. When you see someone living in a car, van, or RV, don’t call the police.”

Wrongo was struck by how the nomads helped each other. In our little New England town, people do the same, they try to help. The bystanders at George Floyd’s murder tried to help prevent Floyd’s death.

The only people who don’t seem to care about helping one another are corporate executives and Republican politicians. How did they get like that?

See the film.

Biden’s Infrastructure Plan

The Daily Escape:

Crepuscular rays at White Sands NM, NM – photo by dantreks

Biden announced his big infrastructure plan on Wednesday. The American Jobs Plan is a $2+ trillion proposal that is an expansive interpretation of the word “infrastructure.”

Naturally, Republicans are against it. South Dakota Gov. Kristi L. Noem (R) disparaged it on Fox:

“I was shocked by how much doesn’t go into infrastructure…It goes into research and development. It goes into housing and pipes and different initiatives, green energy.”

So, Republicans aren’t sure what “infrastructure” is? Or maybe, they want Biden restricted to being President Pothole? They must know that “pipe” and “green energy” are well within the definition of “infrastructure.”

But they would be against it, no matter how little it contained. Today’s Republican Congress is even worse than it was in 2009. Back then, Obama’s stimulus bill to combat the Great Recession, (like Biden’s stimulus bill after COVID-19), received zero GOP votes in the House. In the Senate, Obama got three more Republican votes than Biden. And in the 2010 midterms, the GOP regained control of both chambers, setting its template for 2022.

Now In 2021, Republicans no longer run on policy. They’re running against a mythic Democratic party bent on imposing socialism, demeaning Christianity, defunding the police, coddling menacing migrants, and supporting angry American minorities.

If you’re a Republican politician, you’re not offering any actual policy. They’re offering to fight Democrats, and that seems to be enough to get reelected. This means that Republicans will filibuster any bill the Democrats can’t pass through reconciliation.

Biden knows that. So, his legislative strategy prioritizes rebuilding American infrastructure, something that has a broad consensus within the electorate. His plan includes a commitment to confronting climate change (and creating jobs) by modernizing the electrical grid, encouraging the development of alternative energy sources, and building charging stations across America.

He plans to combat poverty and buttress the middle class through funding childcare, universal pre-K, and free community college, while extending the child tax credits authorized by his stimulus plan.

Taken together, his American Jobs Plan represents Biden’s belief that the pandemic has changed what is politically possible. He proposed to open the way to expanding government’s role in addressing our economic and societal weaknesses, on a scale of spending we wouldn’t have dreamed possible.

He’s taken the ideas originally outlined in the Green New Deal in 2019 and repackaged them under the more politically popular umbrella of infrastructure, including some of the same goals. Biden’s plan isn’t the Green New Deal in sheep’s clothing, regardless of what Republicans say.

To help cover the costs of his plan, Biden proposes raising taxes on corporations, the affluent, estates, and capital gains, starting with corporate taxes. He’s proposing an accompanying tax plan, the Made in America Tax Plan. If it passes, it will pay for the American Jobs Plan in 15 years, and reduce deficits from then on.

Biden proposes to set the corporate tax rate at 28%, from its current rate of 21%, nowhere near the 35% tax rate before the 2017 tax cuts. He also plans to discourage offshoring of corporations and to get rid of subsidies for fossil fuels. Here’s a chart that gives some historical perspective about Biden’s corporate tax proposal:

It’s clear that despite Republican wailing that the infrastructure plan is a “trojan horse” for raising taxes, the reality is that corporate taxes will still be lower than at any point since the 1940’s.

Even this may be a bridge too far, since the Senate’s most conspicuous swing vote, Sen. Joe Manchin (D-WVA), says that while he favors tax hikes, he insists that infrastructure legislation should be passed with bipartisan support.

This suggests a longish legislative process. As a realist, Biden will be happy to again pass landmark legislation with no Republican support. But first he must get Manchin to labor through the thankless work of establishing that the GOP is unwilling to work toward a meaningful compromise.

OTOH, a new Morning Consult/Politico poll says that by a two-to-one margin voters prefer an infrastructure bill that includes tax hikes to one that does not have those tax hikes. That means the GOP may be in trouble if it castigates Biden and Democrats if they pass his plan.

Despite Wrongo’s early misgivings, Biden is the reset button that America desperately needed. He was outwardly moderate but has moved to embrace more progressive positions.

But we shouldn’t underestimate the damage Republicans can do with their singular focus on power and winning the 2022 mid-terms.

American Rescue Plan: A Bold Bet by Biden

The Daily Escape:

Jay Peak, VT – photo by Alan Baker

Today, Wrongo listened to a NYT podcast that tried to dissect “Republican Populism”. Based on the American Rescue Plan that is about to become law, no one should EVER again say that the GOP are populists, except in the demagogic sense.

Long-time blog reader David P. called yesterday to alert Wrongo to Steve Rattner’s appearance on Morning Joe. Wrongo never watches morning television, so he would have missed the charts Rattner used to compare Trump’s Tax Cuts and Jobs Act to Biden’s American Rescue Plan. They are important:

The two bills are nearly the same size, but Trump’s plan on the left above shows that 85% of the benefits from Trump’s plan were tax cuts for businesses and people making more than $75k/year. Just 16% went to people making less than $75k.

Biden’s American Rescue Plan (on the right above) gives 52% of its benefits to individuals making LESS than $75k, of which, 8% is in the form of tax cuts for dependent children. Biden’s plan also spends $1.75 Trillion on attempting to return the American economy to pre-pandemic normalcy.

Rattner’s next slide shows where each plan’s benefits went by income level:

This bar chart divides America by income bracket. The blue bars are Biden’s plan, and the red bars are Trump’s plan. Starting from the left, Biden’s plan provides 23% of the overall benefit to people in the bottom 20% income, while Trump’s plan gave them just 1%. Instead, Trump’s plan gave 65% of the benefits to the top 20%, while Biden’s gives them just 11%, mostly in the form of the $1,400 checks.

It’s easy to see which bill has helped the rich, and which did not. A key Republican talking point in the past few weeks was that the American Rescue plan isn’t focused enough on the pandemic. Yet when Trump and the Republicans had their chance, they showed themselves to be the same old plutocrats.

A key difference between the two Parties:

The CARES Act was a Republican accident. They got scared, and when the Republicans are scared, they’ll flirt with doing the right thing for self-preservation.

The America Rescue plan is a big win for Biden and the Democrats. When signed, it gives more than just cash to American families. It makes Obamacare more affordable for more people. It provides $27 billion in rental assistance and much-needed help to cities and states, and it establishes a child allowance of $3000-$3600, which could become permanent down the road.

It doesn’t contain the $15 an hour minimum wage provision, but compared to previous big pieces of Democratic legislation, like Clinton’s 1993 tax bill or Obama’s 2009 ACA, despite the American Rescue plan’s huge price tag, it passed relatively easily. And just like those two earlier bills, no Republicans voted for it.

Let’s hope that the media continue to describe all of the things Republicans hate in the bill. Who gets what and when, and how, down to the last Biden buck. That they continue to talk about Republican consternation about the deficit and how we pay for it all.

Republicans today have zero ideology. For decades, tax cuts were their preferred economic tool. Tax cuts also caused revenue shortfalls for the government, who would then be unable to offer more safety net programs for the middle and working classes. A Republican delight!

Progressive Democrats believed that putting money in the hands of working people and the poor would be a better economic stimulus because it provided material support to people who needed it.

That’s Biden’s plan.

Progressives want to make things better; conservatives want to maintain the status quo. Progress is usually a good thing, but it isn’t a baseline premise for both Parties.

Reagan turned “liberal” into an epithet. Modern Republicans are doing the same with “progressive.” That will be a hard sell if progressives are bringing jobs and a measure of economic security to hometowns across America, while all the Republicans have to offer is “Look what the progressives did to Mr. Potato Head!”

They will always have the cultural issues, real or imagined, to run on.

But on economic issues, the whole “progressive wish list” compliant from the Republicans is pretty weak tea, when they’re unwilling to vote for anything.

Biden and the Democrats are making a big net on progressive, Democratic ideology. It will be exciting to see how it works. And all of it is going to be popular.

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.

The Wrongologist

Geopolitics, Power and Political Economy

Category: Social Safety Net