Unsanitized: The COVID-19 Report for July 30, 2020

Postal Service Being Torn Apart from Within
Also the day traders fly into Kodak

 

A postal worker heads out on their appointed rounds in Denver. (David
Zalubowski/AP Photo)

First Response

I mean it's just not looking good. We learned that the economy dropped
at a 32.9 percent

annualized rate in the second quarter, a titanic fall with no parallel
in modern history. GDP reports aren't always accurate depictions of
the state of the nation, but in this case, we know that weekly
unemployment claims have been in the millions for 19 straight weeks and
have gone up for the past two
,
with nearly 30 million Americans still receiving unemployment benefits
and more behind them. (This number would be elevated if the 1 million
who have applied but not had claims processed

in California were counted, along with countless others across the
country.) Over half of Americans say the crisis will affect their
holiday shopping
,
ensuring this pain moves well into the future.

Meanwhile, talks aimed at a relief program for this continuing carnage
have gone completely sideways. The White House and Democratic leaders
are "nowhere close to a deal
,"
said chief of staff Mark Meadows yesterday. Donald Trump undermined the
talks by arguing that all should be done is direct payment support and
protection from evictions (which isn't even in the Senate Republican
bill, which Trump hilariously called "semi-irrelevant
"),
and "The rest of it
,
we're so far apart, we don't care."

The $600 a week unemployment boost is now sure to expire, although it
could be made retroactive later. Democrats have rejected a skinny bill
reauthorizing unemployment and the eviction moratorium, because it would
leave "the rest of it" behind, from state and local aid to
assistance for schools and hospitals to funding for testing and
vaccines.

It also includes the $25 billion grant to the U.S. Postal Service that
was in the Heroes Act. The postal service has previously said it would
run out of money by the end of September, but it's currently acting
like it's already broke. The mail has been, seemingly deliberately,
slowed around the country. Anecdotes include small business that do a
lot of shipping having to switch away from USPS because of interminable
delays, and an entire section of Seattle missing its mail
.

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But this is more than an anecdotal set of incidents. Since Louis DeJoy,
a Trump loyalist and donor, took over as Postmaster General this month,
he has moved to cut overtime among postal workers. He also noted in a
memo that postal workers should leave mail behind

if it would cause delays to routes. Another program would deliver mail
early and rolling back sorting, which would delay the mail even further,
and this compounds over time. Numerous post offices across the country
were also suddenly scheduled to close
,
although the agency seems to be backing away from that now.

DeJoy has cited financial losses and said that the agency must "make
necessary adjustments." Critics have charged

this is an effort to wound the culture and reputation of the Postal
Service, and leave it open to privatization. UPS and FedEx have
exploited this crisis by raising shipping rates
,
knowing that their competitor is being undermined from within.

Amid all this, the USPS did get a lifeline from the Treasury Department,
but at a serious cost. Back in the CARES Act, Congress authorized a $10
billion line of credit for the Postal Service. But Treasury didn't
execute that, preferring to hold it over the agency's head to try to
extract changes to the business model. Yesterday, Treasury finally
announced a deal

for the $10 billion loan. DeJoy was already changing the business model
from within, so instead, Treasury got proprietary information on the
USPS's negotiated service agreements, their contracts with other
shippers like UPS and FedEx and Amazon.

Essentially, USPS has the infrastructure to ship places that would be
cost-prohibitive for its rivals, so it contracts for "last-mile"
service. This has been a source of controversy, with the Trump
administration claiming that the Postal Service isn't charging enough
for these agreements. The turnover of the agreements is a prelude to
force changes to the rates, which could lead the shipper rivals to just
drop all work with USPS. The decision "to extend this financial
assistance only in exchange for fulfilling Trump's political errands
is an affront to the independence of the Postal Service," said Rep.
Bill Pascrell (D-NJ), a strong USPS advocate. "The Trump
administration has cynically taken advantage of this to sabotage postal
operations just when the American people are relying on USPS most."

The elephant in the room is that we have an election in November that
will rely to an unusual degree on mail-in ballots. Already there have
been warnings that if you really want your vote counted, you need to
send it in up to two weeks before Election Day. There's more than a
little suspicion that this degradation of the post office and the
terrible Republican position in the elections are connected. Slowing
down the mail is now a voting rights issue. As Chris Hayes noted last
night
,
"the only way this administration can get away with breaking the post
office is if they try to do it sneakily behind the scenes. And we're
not going to let them."

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Odds and Sods

Thanks to everyone who attended my virtual appearance at Seattle's
Town Hall, talking about my book Monopolized
. I
believe you can watch a rebroadcast of that here
.

Speaking of monopolies, I monitored the Big Tech hearings yesterday with
a 175-tweet thread on Twitter
. And based on
that I wrote a report for the Prospect
.
This was kind of an inspiring hearing that shows how a little evidence
and dedicated members of Congress can actually make a difference.

I was on The Nation podcast with Jon Wiener talking about the next
coronavirus relief bill and my book. Listen here
.
You can find all of our coronavirus coverage at prospect.org/coronavirus
. And reach out to me via email
with tips, comments, and perspectives.

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That Kodak Moment

Briefly, Kodak got a loan from the U.S. government to make ingredients
for drugs, which you might notice are not cameras. They sent out a media
advisory before the loan was formally announced, with no embargo.
Reporters in Kodak's hometown of Rochester, New York were tweeting
about the loan on Monday (it was announced Tuesday), and news stories at
Rochester affiliates went up. Kodak is still a major employer there.

So this set off a frenzy of trading
,
including options trading at 20 times normal levels. Shares are at their
highest value in six years. Day traders are flying into the stock
.

We get that Kodak got a loan, right? That they'll have to pay back?
It's a solid win for the company but it doesn't suggest a 2,760
percent increase in its market valuation. I fear this will end badly.

Days Without a Bailout Oversight Chair

125
.

We Can't Do This Without You

Today I Learned

* RIP to Herman Cain
,
who attended the Tulsa rally, caught coronavirus, was hospitalized for a
month, and died. (CNN)

* RIP also of coronavirus

to the co-founder of right-wing Turning Point USA, an organization that
mocked mask-wearing. It's a sad pattern. (Politico)

* Masks now required on the House floor

after Louie Gohmert, who doesn't wear one and discourages staff from
the same, contracted coronavirus. Again, a pattern. (Axios)

* AFT president Randi Weingarten says Florida, Texas, and Arizona are
candidates

for teacher strikes if they force in-person classes. (Politico)

* The Census Household Pulse survey looks real bad
:
over a quarter of respondents expecting to miss housing payments.
(Calculated Risk)

* Dean Baker is thoughtful on the post-pandemic economy
, which
actually affords some opportunity. (Beat the Press)

* I don't know how, but I definitely see this commercial property
bailout

happening soon. (Wall Street Journal)

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