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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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Saturday Soother – Back to Work Edition, April 11, 2020

The Daily Escape:

Great Sand Dunes NP, CO – photo by AddisonTract

Welcome to the 85th Saturday in April, fellow disease vectors! Here are the updated COVID numbers (as of 4/9):

  • There’s good news today. New infections are down dramatically as is the rate of new deaths.
  • The percentage of deaths to total cases has stabilized, at least for the moment.
  • Daily testing increased by 159,130. That’s helpful, but the growth in new tests still lags the growth in new infections.

America and the world are fighting a two-front war, one with the COIVID-19 pandemic, and another with our self-imposed, slow-rolling financial meltdown. Many think, like Trump, that the damage to the economy is worse than the loss of 50,000-100,000 American lives.

The irony is that it is the US governors that have precipitated the economic crisis while trying to moderate the public health crisis. And it has been the Trump administration that is trying to moderate the economic crisis by attempting to prematurely end the Coronavirus crisis.

A tenth of the work force has applied for unemployment benefits, while millions more are not working. In addition, small businesses are going under. So the GOP is pressuring Trump to declare victory and re-open the economy, and he’s looking for a plan to get people back to work.

But it isn’t just a plan. Attorney General Barr strongly suggested in a FOX TV interview that states don’t have the right to shut down businesses and schools during a public health emergency, and hints that the Trump administration could take action against states that don’t rescind shelter-at-home orders next month:

“When this period of time, at the end of April, expires, I think we have to allow people to adapt more than we have, and not just tell people to go home and hide under their bed, but allow them to use other ways — social distancing and other means — to protect themselves,”

Apparently, Barr is focused on what happens after the CDC’s guidelines on social distancing expire at the end of April. This is a clear sign that, while Barr is willing to allow states to do what they are doing now, his and the administration’s patience will expire when the CDC’s guidelines expire.

The WaPo reports that Trump is about to announce the creation of a second Coronavirus task force aimed at combating the economic consequences of the virus:

“The task force is expected to be led by Mark Meadows, the White House chief of staff, and include Larry Kudlow, the president’s chief economic adviser, and Mnuchin, the treasury secretary, along with outside business leaders. Others expected to play a role are Kevin Hassett…and the president’s son-in-law, Jared Kushner…”

One of the lynchpins of reopening the economy is supposed to be universal testing for the virus. But NPR reports the government is ending its funding for testing:

“…the federal government will end funding for coronavirus testing sites this Friday. In a few places those sites will close as a result.”

Reopening the economy without adequate testing is just like walking blindly in a minefield. And we know that testing remains generally unavailable.

The job of the administration should be to make the “5-minute” test kits cheap enough that every urgent care, every pharmacy, every clinic, can have two or three, and be running tests. Not just the current 10 -15 per state, but tens of thousands, so that widespread testing can be easily available.

Trump gave his game away yesterday when CNN’s Jim Acosta asked him:

“How can the administration discuss the possibility of reopening the country when the administration does not have an adequate nationwide testing system for this virus? Don’t you need a nationwide testing system for the virus before you reopen?”

TRUMP: “No.” pic.twitter.com/JokZYfy97T

What could go wrong? Plenty of things could go badly wrong.

If/when they do, Trump will blame the states, especially those with Democratic governors. Believe it or not, he will then campaign as the man who stopped the epidemic, and at least 40% of voters will say he accomplished it.

Let’s focus on relaxing for a few minutes with a new Saturday Soother. Wrongo hopes that you are staying healthy, productive, and in good spirits. If your income stream has been disrupted by the pandemic, Wrongo hopes you use the time constructively: Do something you’ve wanted to do for a long time.

Today we continue in the English pastoral idiom that we started last week.

Here is British composer Gerald Finzi’sIntroit for Solo Violin & Small Orchestra Op. 6”.  Played by the Northern Sinfonia with Lesley Hatfield on solo violin. It is conducted by Howard Griffiths. This is music that leads to private thoughts, something we all need right now:

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

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