Preview

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.

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.”

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.

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.

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)