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The Wrongologist

Geopolitics, Power and Political Economy

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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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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