Week-end Wrap – Political Economy – April 26, 2020

Week-end Wrap – Political Economy – April 26, 2020
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Vic DiBitetto: Dear government: We need a real fucking plan, you shitbags

Shorter Twitter video:
Dear government: We need a real fucking plan, you shitbags
[via Mike Norman Economics]

Strategic Political Economy

Bill Clinton guru James Carville famously blurted "It's the economy stupid." Actually, it's the economic ideology. If the American people are going to save themselves, they need to understand that their ruling elites are Malthusians of the Social Darwinian type.

McConnell Says He Favors Letting States Declare Bankruptcy
[Bloomberg, April 22, 2020]

McConnell, a Kentucky Republican, said he blocked additional state and local aid in the latest relief package, which passed the Senate Tuesday and is set for a vote Thursday in the House. “I said yesterday we’re going to push the pause button here, because I think this whole business of additional assistance for state and local governments needs to be thoroughly evaluated,” McConnell added. Later, on Fox News, McConnell said that any state or local aid must be specifically linked to the pandemic and shouldn’t be viewed as an opportunity for “revenue replacement.” 

“We’re not interested in solving their pension problems for them,” McConnell said. “We’re not interested in rescuing them from bad decisions they’ve made in the past. We’re not going to let them take advantage of this pandemic to solve a lot of problems that they created for themselves with bad decisions in the past.”

Lee Saunders, president of the American Federation of State, County and Municipal Employees, said most states don’t need to restructure their debt. “Rather, they are suffering unprecedented revenue loss due to the shutdown of our economy just like so many businesses in the private sector,” Saunders said. “The money they need now is to maintain vital life-saving services provided by front-line workers in the face of the most dire public health emergency in a century.”

“We’re not interested in solving their pension problems for them.” Translation: we should avoid the costs of caring for retirees and just let them die off faster. And just in case you don't understand yet:

The Right Wing Wants You to Die

[Vice, via Naked Capitalism 4-25-20]

Earlier this week, someone showed up at a protest in Nashville, Tennessee with a sign reading "Sacrifice the weak.".... 

Other rich, advanced countries like South Korea and Germany have arrived at a solution. By using state power to do what scientists and economists say is necessary—testing the population, isolating the infected, and tracing their contacts, while financially supporting citizens who have lost income—they've reduced death and the spread of the virus without imposing mass suffering, offering the possibility of a return to something like normal life. The United States hasn't seriously prepared or planned to do any of these things. Instead of organizing a response, federal leaders are engaged in piracy. The Senate's majority leader wants states to declare bankruptcy. Trump has suggested injecting bleach into patients' lungs....

The phrase "death cult" has been used to describe the Republican Party enough lately that it's probably lost any real meaning, but it's not far off as a descriptor. Ohio congressman Jim Jordan, head of the House Freedom Caucus, supports the protests and doesn't understand why the economy shouldn't have been opened yesterday. Pennsylvania lawmaker Mike Jones participated in a protest in Harrisburg this week, calling it "the best of America." A protest in Michigan was organized by the vice-chair of Trump's state campaign and the grassroots vice-chair of the state Republican Party. Government is organizing protests of itself to rally support for policies that would result in mass death.

Week-end Wrap – Political Economy – April 19, 2020

Week-end Wrap – Political Economy – April 19, 2020
byTony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

Is America Going to Have a Covid-19 Apocalypse?
Ian Welsh, April 17, 2020

In the US, we have predictions of a 30 percent unemployment rate. I just saw that less than half of Los Angeles county still has a job. The bailout for regular people is $1,200. In a place like Los Angeles, that won’t even cover most people’s rent.

There’s been a vast bailout, mainly–though not exclusively–through the Fed, for the rich. Basically, as much free money at the trough as they can gorge on. But small businesses are toast. A third of households, at least, are on the verge of not just homelessness but not being able to eat....

Meanwhile, multiple states have not instituted isolation, and there are “protests,” backed by Republicans, to reopen states that have. Not isolating nationally means there are pockets of plague which are still expanding exponentially, and which can reinfect the areas which did isolate. Coming out of isolation too soon will mean that cases will explode again a month to a month and a half after self-isolation ends.

The job issues mean trouble. People who can’t afford food become violent. Food riots bring down nations.

The New Fault Lines in a Post-Globalized World
Marshall Auerback [Economy for All (Independent Media Institute), via Naked Capitalism 4-16-20]

Forget about the “new world order.” Offshoring and global supply chains are out; regional and local production is in. Market fundamentalism is passé; regulation is the norm. Public health is now more valuable than just-in-time supply systems. Stockpiling and industrial capacity suddenly make more sense, which may have future implications in the recently revived antitrust debate in the U.S. 

Biodata will drive the next phase of social management and surveillance, with near-term consequences for the way countries handle immigration and customs. Health care and education will become digitally integrated the way newspapers and television were 10 years ago. Health care itself will increasingly be seen as a necessary public good, rather than a private right, until now in the U.S. predicated on age, employment or income levels.

The Plan Is to Save Capital and Let the People Die
[In These Times, via Common Dreams 1-9-20]

Those are all obvious steps to take if your goal was to protect humans. But imagine, instead, if you had an entirely different goal: protecting capital. What would you do then? Well, you would prioritize the health of corporate balance sheets, rather than human bodies. You would keep the healthcare industry, now booming, in private hands; you would stimulate consumer demand via unemployment benefits, rather than by keeping workers on existing payrolls, in order to create an enormous pool of cheap and desperate labor; you would pursue tax cuts for the investor class; you would welcome the opportunity to allow debt to pile up on individuals; and you wouldn’t be too sad about small businesses going bankrupt—they are, after all, just ceding market share to bigger, richer businesses. You would use this crisis to create a greater, not lesser, concentration of wealth. You would emerge on the other side with more, not less, inequality. The truth is, it would be easy.

Now, guess what the U.S. federal government is doing? It is allowing the unemployment rate to skyrocket, as tens of millions of workers are fired; it is allowing countless small businesses to go bankrupt, from incompetence and neglect; it has not even considered a national suspension of rent, nor a strong national policy of paid sick leave, much less a national system of free public healthcare; as millions of needy people struggle with decrepit and broken state unemployment systems and wait weeks or months for their emergency checks to come, and essential workers are forced to agitate or walk out to gain hazard pay, the administration plots a new bill featuring a capital gains tax cut and “a waiver that would clear businesses of liability from employees who contract the coronavirus on the job.”

....The true heroes of this crisis, from the perspective of those in charge, will be the private equity firms that rush in to buy up distressed businesses, and the hedge funds that pour money into cheap debt, and the investors that scoop up the homes that people will be evicted from. They are the ones that renew the blood of capital, you see. They are the ones that will rescue us. They are the ones who will shepherd our precious capital through this dangerous time, and into the promised land.

Demand Congress pass Saving Peoples’ Lives Act of 2020

People Demand Bold Action to Save Lives and 

Prevent Second Wave of COVID-19 Infections

Congress Must Approve “Saving Peoples’ Lives Act of 2020”

Statement of the COVID-19 Emergency Response Group

(14 April 2020, Washington, DC) Social distancing is saving lives. But our national leaders, impatient to get Americans back to work, are sending messages that undermine on-the-ground health and safety recommendations that state governors, mayors and local health departments are urging.

Americans cannot count on their national leaders to make decisions that prioritize human lives and health over the economy. Everyday citizens must come off the sidelines, raise their voices and create the health-first policies that can keep our families and communities safe from COVID-19.

To stop the spread of COVID-19, and to manage the next wave of infections certain to come, we must demand extending federal stay-at-home guidelines through May 31, 2020 at minimum, and an aggressive campaign to put in place national testing, tracking, isolation and containment (TTIC) capabilities. Quite simply, we can’t let people return to work until we identify and isolate infected people; we can’t isolate infected people until we identify them; and we can’t identify them until they are tested.

The newly formed COVID-19 Emergency Response Group aims to give concerned Americans a voice in shaping the Trump Administration’s and the world’s response to this unprecedented health emergency.

The COVID-19 Emergency Response Group, made up of leading public health experts, faith and business leaders, former senior Congressional and legislative staffers, local and state elected officials, and leaders of national NGOs, will help draft federal legislation, support smart existing legislation, lobby the United Nations, and advocate for governments around the world.

Week-end Wrap – Political Economy – April 12, 2020

Week-end Wrap – Political Economy – April 12, 2020
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Strategic Political Economy

Is Capitalism a Threat to Democracy?

[New Yorker, via Naked Capitalism 4-5-20]

In a sweeping, angry new book, “Can Democracy Survive Global Capitalism?” (Norton), the journalist, editor, and Brandeis professor Robert Kuttner... [argues] today’s political impasse is different from that of the nineteen-thirties. It is being caused not by a stalemate between leftist governments and a reactionary business sector but by leftists in government who have reneged on their principles. Since the demise of the Soviet Union, Kuttner contends, America’s Democrats, Britain’s Labour Party, and many of Europe’s social democrats have consistently tacked rightward, relinquishing concern for ordinary workers and embracing the power of markets; they have sided with corporations and investors so many times that, by now, workers no longer feel represented by them. When strongmen arrived promising jobs and a shared sense of purpose, working-class voters were ready for the message.

Economic Armageddon

Key 2008 Financial Crisis Players Are Back for Coronavirus
[Bloomberg, via Naked Capitalism 4-5-20]
The same self-serving rentier parasites who were in charge in 2008-2009 are still in charge - another indication that USA political and economic systems are complete failures. They are unable to replace proven failed leadership with competent leadership. Not surprising that the professional class in the Democratic Party -- which declined the opportunity in 2009-2010 to uproot the failed leadership of Wall Street, and is now besieged by a reality of innumerable crisis -- responded to the challenge of Bernie Sanders, by desperately retreating to their Biden redoubt. 

• Treasury Secretary Steven Mnuchin led a group of investors who purchased failed subprime mortgage lender IndyMac and ran the bank until its sale in 2015. Mnuchin is now leading President Donald Trump's economic response to the pandemic.
• Tim Geithner, President, Federal Reserve Bank of New York in 2009. CURRENT POSITION: President, Warburg Pincus
• Larry Fink, CEO, BlackRock Inc. in 2008. CURRENT POSITION: CEO, BlackRock Inc.
• Tom Montag, Head of Sales & Trading, Merrill Lynch & Co. in 2009. CURRENT POSITION: 
• Chief Operating Officer, Bank of America Corp.
• Rodge Cohen, Chairman, Sullivan & Cromwell LLP in 2008. CURRENT POSITION: Chairman, Sullivan & Cromwell LLP
• Alan Schwartz, CEO, Bear Stearns Cos. in 2008. CURRENT POSITION: Co-Chairman, Guggenheim Securities LLC
• Gary Parr, Vice Chairman, Lazard Ltd. in 2008. CURRENT POSITION, Senior Managing Director, Apollo Global Management
• 
  
• To which let me add: Joe Biden, vice-president of the United States in 2009. CURRENT POSITION, Democratic nominee for U.S. President

'Breadlines' Erupt Across America As Lockdowns Crush America's "Working Poor"
[ZeroHedge 4-10-20]

Saving your local economy 4-6-20

This post is based on some key assumptions: 

• You want to save and preserve small and local businesses in your community or town.
• You don’t want a local economy that consists almost entirely of chain restaurants and big box stores with a central business district full of empty storefronts.
• You value the diversity, creativity, idiosyncratic character, and friendliness that thriving small business owners bring to your community or town. 

Whenever there are enough links that I think might assist people in organizing responses from their local county and municipal governments, I will post them. It probably will not be every day. 

Millions Of Applicants But "Only 100 Loans Disbursed" In Latest Small Business Bailout Shock [Zerohedge, 4-6-20]

In a phoned-in interview on CNBC, Wilfred Frost urgently reported that Bank of America has received 177,000 applications for some $32.6 billion in emergency liquidity, but so far, only 100 of these loans have been disbursed.
The bank hopes to get most of the stack processed by mid-week, but it's unclear what they're basing these hopes on. 

Unsanitized: Why Banks Don’t Want to Help Small Businesses [David Dayen,  The Prospect, April 3, 2020]

So why the reticence from the banking sector? I think liability is a red herring; are they really afraid of the heavy regulatory hand of Steve Mnuchin (or any law enforcer involved in the financial crisis)? It looks to me like they don’t want to do the work. Every expectation is for an absolute crush of applications. Thirty million small businesses could be on the line here. The compliance requirements are minimal but banks always whine about the expense of that; that’s why BofA is restricting to already-vetted customers. And the guidelines, which have been “changing by the minute,” could change again. So why bother with the hassle? The money’s good, but it’s marginal, and the big banks think in billions, not millions…. 

...I’ve talked to dozens of small business owners who are confused by this program and also desperate to participate. There’s not going to be enough money—Congress gave $350 billion—to begin with. If lenders are slow to open the spigot, a lot of these businesses will go down. They don’t have any cash reserves. There’s a lot of concern. Maybe SBA should have found someone more willing to act quickly.

Week-end Wrap – Political Economy – April 5, 2020

Week-end Wrap – Political Economy – April 5, 2020
by Tony Wikrent
Economics Action Group, North Carolina Democratic Party Progressive Caucus

Economic Armageddon

Coronavirus batters US economy as 6.65 million file for unemployment last week
[The Guardian April 2, 2020]

Some 3.3 million had filed for unemployment the previous week, bringing total claims to 9.95 million for the two weeks.

US Labor Market Update
Len Kiefer April 3-2020
Click through to his animated gif graph, which helps visualize the catastrophic economic convulsion we are in. It takes a few seconds to get to the stunning, shocking end.
http://lenkiefer.com/img/charts_2020_04_03/claimsSA_2020_04_03.gif

Jobs Aren’t Being Destroyed This Fast Elsewhere. Why Is That?

Emmanuel Saez and Gabriel Zucman [NYT, via Naked Capitalism 4-1-20] 

This dramatic spike in jobless claims is an American peculiarity. In almost no other country are jobs being destroyed so fast. Why? Because throughout the world, governments are protecting employment. Workers keep their jobs, even in industries that are shut down. The government covers most of their wage through direct payments to employers. Wages are, in effect, socialized for the duration of the crisis. 

Instead of safeguarding employment, America is relying on beefed-up unemployment benefits to shield laid-off workers from economic hardship. To give just one example, in both the United States and Britain, the government is asking restaurant workers to stay home. But in Britain, workers are receiving 80 percent of their pay (up to £2,500 a month, or $3,125) and are guaranteed to get their job back once the shutdown is over. In America, the workers are laid off; they must then file for unemployment insurance and wait for the economy to start up again before they can apply for a new job, and if all goes well, sign a new contract and resume working....

This situation for laid-off workers would be bad enough if it were not aggravated by a second American peculiarity. As they are losing their jobs, many workers are also losing their employer-provided health insurance — and now find themselves faced with the Kafkaesque task of obtaining coverage on their own. 

One option involves continuing to be covered by one’s former employer, a program known as COBRA. It is prohibitively expensive: Participants have to bear the full cost of insurance, $20,500 per year on average. Another option is to go shopping for a plan on the Affordable Care Act insurance exchange, where one is faced with a bewildering choice between plans like Blue Shield’s Bronze 60 PPO (with a deductible of up to $12,600 per year) and Aetna’s Silver Copay HNOnly (with a $7,000 deductible and up to $14,000 in annual out-of-pocket expenses). The last option is to join the ranks of the uninsured, a catastrophic solution during a pandemic. There are reports that people have already died of Covid-19 because they refused to go to the hospital, worried about bills, or because they were denied treatment for lack of insurance.