The Smoke Eater for March 20, 2020
Embrace the suck, a bribe, and President Camacho.
Good day, this is The Smoke Eater for Friday, March 20, 2020, and I'll pump with both hands 'til I'm back on dry land.
Quick Hit
* Toilet paper is more valuable than a dollar * Senate Republican's idea of a bailout * A perfect opportunity * Bean counters and foreign policy nerds are freaking out * A message from President Dwayne Elizondo Mountain Dew Herbert Camacho *
NOTE: I had to write a good chunk of today's issue on my phone at the laundromat at 4AM (social distancing)! Patreon supporters will get photos from my outings in Chicago a little later. The Smoker Eater is mobile friendly, ad-free and supported by super awesome readers. If you want to be super awesome, tip me on Ko-Fi, or subscribe to my Patreon!
Embrace The Suck
A new ABC News/Ipsos poll out this morning shows 55 percent of Americans approve of Donald Trump's job during the coronavirus pandemic. According to the poll, people found the "most dramatic changes" to be, "not going out to dinner (now 57% from 9%), not attending religious services (now 33% from 3%), and not attending sporting events or concerts (now 32% from 9%)," as well as a lot of people who are suddenly unemployed.
Multiple states are reporting massive spikes in unemployment numbers that have overwhelmed state labor department call centers and websites. The numbers come as more and more local leaders tell bars, restaurants, casinos, gyms, and movie theaters to stop normal operations or shutdown completely. After markets plummeted again on Wednesday, a Trump administration official at the U.S. Labor Department asked states to embargo the unemployment statistics until national numbers are released each Thursday.
Market Watch quotes David Choi, an economist at Goldman Sachs, predicting initial unemployment figures for this week ending as high as 2.25 million based on publicly available reports and data. Choi's most conservative estimates top over 1 million. Historical data suggests this a signal that the fun hasn't even started yet. Some bean counters, like Andrew Stettner, an unemployment expert and senior fellow at the Century Foundation, are cautioning that this is just the, "tip of the iceberg," adding, "These Numbers do not account for the surge of new claims from overwhelmed websites coast to coast." Other economists tell Politico's Ben White that it may take multiple trillions of dollars just to keep things from collapsing over the next few months.
Late this morning, Treasury Secretary Steve Mnuchin tweeted that the federal tax deadline had been moved from April 15 to July 15 so that "taxpayers and businesses will have this additional time to file and make payments without interest or penalties."
It's A Bribe, Not A Bailout
After people got a look at Senate Republican's trillion dollar economic stimulus plan, criticism began coming from the left, right, and center. Congressional Democrats and key Republican Senators argue that the roughly $1,200 checks to taxpayers proposed by Republicans would be better as a supplement to unemployment benefits so that people can maintain a regular income as opposed to one-time cash dump. "You know, just a blanket cash check to everybody in America that’s making up to $75,000," griped Republican Sen. Richard Shelby, "I don’t know the logic of that." The move is echoed by House Financial Services Chairwoman Maxine Waters, who already issued a similar proposal aimed at preserving job stability and jump starting the economy after the pandemic recedes. Politico's Anna Palmer and Jake Sherman report that Senate Majority Leader Mitch McConnell and the Trump administration are hoping to ram this bill through as quickly as possible, but Democrats and some key Republicans are refusing to simply roll over. [Proposed Bill]
Some of the provisions aimed at wrangling Democratic support in the GOP measure is corporate executives would have to cap their compensation at 2019 levels for two years, and would be forbidden from "golden parachutes" worth more than two-times their 2019 compensation. The student loan protections give Education Secretary Betsy DeVos the ability to defer payments principal and interest for up to three months, and broad authority to waive financial rules for grant program. Late this morning the administration announced students could suspend student loan payments for 60 days.
Congressional Democrats have balked at the Republican's bill, noting that the proposal disproportionately leaves out those most affected by the economic nose dive. The bill gives a much smaller cash bailout to those with no tax liability (read: really poor people) while giving hundreds of billions to some businesses, like airlines. Democrats argue the bill simply doesn't do enough to protect workers at the bottom, and should ban companies from using the money for stock buybacks and not reward executives for laying off workers. Additionally, Senate Democrats maintain that the student loan protections offered by the the administration are inadequate; they've have rolled out a more robust proposal for student loan borrowers that would forgive $10,000 in student loan debt, and see the Education Department takeover loan payments during the emergency with an additional three month grace period to forgo payments without penalty after the emergency.
Roll Call reports that the some economists think the Republican plan doesn't go far enough, and is like a band-aid for small businesses with broken backs.
Never Waste A Perfectly Good Crisis
Native tribes the administration is bragging helping can't actually get any of their recently allocated relief funds because of a bureaucratic snafu between the CDC and the native tribes that the tribes warned about. Members of Congress who crafted the bill say that they wrote the measure to fight
The administration is using this as an opportunity to ram through conservative policies that might otherwise trigger public outrage. Zolan Kanno-Youngs and Annie Karni write in The New York Times that the administration has been using it's new emergency powers to disenfranchise federal employee unions (at a time when many government workers face extreme hazards), enact even more stringent and dubiously legal border policies along the Mexican border, and simultaneously brush off congressional oversight -- all as a matter of national security.
Trump is refusing to use the Defense Production Act to force companies to begin producing desperately needed medical supplies. Earlier today Trump said the this was the responsibility of local governments, adding, "The federal government is not supposed to be out there buying vast amounts of items and then shipping. You know, we’re not a shipping clerk."
Geriatric crackpots living in the middle of nowhere are on social media shitposting about a liberal media conspiracy to take down Trump. Their reasoning is that, even if this is real (it is), they don't know anyone who's been affected, and that Jesus will fix everything anyway. The New York Times found a woman in Louisiana who got her friends to suddenly changed their tune after her husband became infected. In a related story, Louisiana Gov. John Bell Edwards has warned the White House that Louisiana hospitals are likely to reach capacity within a week after reviewing new modeling data on the spread of the virus.
Of Course It Gets Worse
Economist Branko Milanovic writes in Foreign Affairs that one of the real dangers right now is societal collapse. Milanovic argues that, in an era already gripped by xenophobic nationalism, countries may retreat from the globalized economic system that's developed over the last century leading to a cascade of failures in greater social systems. "If more people emerge from the current crisis with neither money, nor jobs,nor access to health care, and if these people become desperate and angry," Milanovic cautions, "Such scenes as the recent escape of prisoners in Italy or the looting that followed Hurricane Katrina in New Orleans in 2005 might become commonplace...Advanced societies must not allow economics, particularly the fortunes of financial markets, to blind them to the fact that the most important role economic policy can play now is to keep social bonds strong under this extraordinary pressure."
This threat to (what's left) of the existing global order in the wake of Washington's growing list of leadership failures is not lost on foreign policy nerds. Kurt Campbell, the former Assistant Secretary of State for East Asian and Pacific Affairs under Barack Obama, notes that China's response to the pandemic is to cast itself as a savior to the world -- which is convenient as most medical supplies are made in China, including N95 respirators and the antibiotics necessary to combat COVID-19. In order to combat the virus, the Chinese first tried to hide the outbreak. The government then took over factories to mass-produce medical supplies which were then sold back government. The retrenchment policies pursued by Washington over the last few years have left allies alienated and the U.S. isolated. The Chinese have since embarked on massive foreign aid, propaganda and disinformation campaigns aimed at further isolating the U.S. Earlier this week China again expelled a number of U.S. journalists in a move that is widely believed to be an effort by Beijing to stifle critical reporting.
The administration has attempted to mitigate some of the Chinese influence operation through racist rhetoric and shitposting. Conservative media outlets have similarly encouraged this xenophobia when talking about the virus by ignoring race-based attacks against Asian-American.
One More Thing...
OK, here's a warm and fuzzy critters: IT'S MAVERICK!
Follow Dominic on Twitter and Instagram.
The Smoke Eater is mobile friendly, ad-free and relies on your tips and subscriptions. It takes a lot of time and energy to put each issue together, so consider tipping me on Ko-Fi, or subscribing to my Patreon.
Questions? Comments? Complaints? Shoot me an email or slide into my DMs!
All hail the Maverick floof belly!