Unsanitized: The COVID-19 Report for Aug. 7, 2020

Federal Benefit Extension Looks Remote as Anger Mounts
Plus, the post office tries to stick up states

 

The public is fixing to get out their pitchforks. (Jens
B'ttner/picture-alliance/dpa/AP Images)

First Response

If talks between Democrats and the White House on a coronavirus relief
package weren't already in a dire state, today's
better-than-expected jobs report
throws a further wedge
into them. Superficially, 1.8 million people gained work in July, with
the unemployment rate falling to 10.2 percent. But that is still down
11.3 million jobs year-over-year, with only about 40 percent
of the
jobs recovered since the beginning of the pandemic. The report benefited
from a seasonal adjustment to education hiring that made it look like
245,000 state and local education jobs were gained in July (I explained
that seasonal adjustment here
),
but even that's bad news, because the seasonal adjustment was expected
to bring at least 500,000 phantom jobs. It means education cuts are much
more extreme than expected.

Because it beat expectations, you're likely to hear crowing from the
White House. (Never mind that this again shows the lack of a
"disincentive to work" from enhanced unemployment.) But it's still a
worse report than May or June, reflecting a deceleration of workers
returning after April lockdowns. Add the 8.4 million involuntary
part-time workers (here's a good report

on involuntary part-time suggesting that number is higher) and you have
nearly 20 million Americans in a difficult situation, and the $600/week
that was sustaining them pretty well has run out.

Talks aimed at restoring that broke off Thursday night

and both sides proclaimed themselves "very far apart," with
finger-pointing galore. The White House has reportedly upped its offer
on a skinny bill from a very short-term $600/week extension to $400/week
until December 15. There's also apparently $150 billion for state
fiscal aid, way down from the nearly $1 trillion Democrats have asked
for. That an eviction moratorium would round out the skinny bill.

Democrats have rejected this. They are, however, insisting on "meeting
in the middle," which Chuck Schumer and Nancy Pelosi said five different
times in their
media availability on Thursday. That could just be talk to make them
look more responsible in a negotiation that looks on the verge of
collapse
.
But it does set a narrower range of outcomes. The poles are now (a)
nothing, and Trump tries to do the eviction moratorium by executive
order and reprogram appropriated but unused CARES Act funds to extend
unemployment benefits, or (b) "the middle."

Read all of our Unsanitized reports here

Click to Support The American Prospect

I suspect Trump is warming to (a), because it would put Democrats in the
position of suing the president to block $600/week from getting to
unemployed people. Of course, the executive order would be the skinniest
of skinny supports, and you'd see mass layoffs at the state and local
level as a result. And the unused funds, about $80 billion as I
understand it, would only last a little over a month.

Meanwhile the stock market has been up all week, pricing in a deal being
struck when it's unclear whether the two sides are even talking to one
another. I guess the market can't go down when you always think the
deal is on the way. And with the Federal Reserve bazooka still in...
reserve, asset prices are generally safe. And so you have this
unbelievable disparity, with vulnerable out-of-work people scrambling
with scraps of savings and credit cards and food banks while investors
calmly check their stock reports and register gains.

This is how you get legislation like the bill

Sen. Bernie Sanders (I-VT) released yesterday, a 60 percent wealth tax
on billionaire gains since the pandemic, to be used for reimbursement of
all health costs for people for the next year. This is based on a series
of reports from the
Institute for Policy Studies showing massive gains flowing to
billionaires (largely from stock increases) since the crisis hit.

The tax would be hell to administer and would surely draw a legal
challenge. Also Mitch McConnell's Senate majority won't be passing
it and Donald Trump won't be signing it. But the point here is that
this is a pitchfork in the shape of a bill. The thing you can't
account for with all the corporate bond-buying promises and asset
inflation is social unrest. Societies with such a yawning gap between
rich and poor don't just muddle through without mass anger. We saw it
in a racial context in June. We will see far more of it if the
unemployed are left to fend for themselves and the rich stay rich.

Support Independent, Fact-Checked Journalism

Stamp Inflation

Nancy Pelosi and Chuck Schumer followed up on their meeting with
Postmaster General Louis DeJoy by putting in writing

their allegation that DeJoy admitted to slowing down the mail, through
"reductions of overtime availability, restrictions on extra mail
transportation trips, testing of new sorting and delivery policies at
hundreds of Post Offices, and the reduction of the number and use of
processing equipment at mail processing plants."

We knew this was happening but didn't have all the brazen specifics of
the slowdown-testing new policies right now has nothing to do with a
fiscal crisis and everything to do with degradation. More members of
Congress

are demanding a reversal to these orders, including rural Republicans
, whose
constituents rely on consistent mail service. There's also the point
that delaying the mail deliberately is a criminal offense
, though I don't
see Bill Barr sending anyone over to cuff the Postmaster General anytime
soon.

I do think we'll see a reversal soon, because on top of everything,
it's a terrible position for an incumbent to make the most
citizen-facing government agency in daily life demonstrably worse. But I
want to point to something that only the (paywalled) Capitol Forum has
pointed out. The Postal Service has informed states that they'll need
to pay first-class 55-cent postage to mail ballots to voters, rather
than the normal 20-cent bulk rate. That nearly triples the per-ballot
cost at a time when tens of millions more will be delivered. The rate
change would have to go through the Postal Regulatory Commission and,
undoubtedly, litigation. But the time frame for that is incredibly
short, as ballots go out very soon.

A side benefit of this money grab is that states and cities may decide
they don't have the money to mail absentee ballots, and will make them
harder to get. Which is exactly the worst-case scenario everyone fears.

We Depend on Your Donations

Days Without a Bailout Oversight Chair

134
.
You can watch the commission's hearing on the Main Street Lending
Program here .

**NOTE: There will be no Unsanitized tomorrow. Back on Monday.**

We Can't Do This Without You

Today I Learned

* Monopolized news: here's a great podcast
I was on talking
about the book with the Institute for Local Self-Reliance. I really
enjoyed this one. (ILSR)

* Andrew Cuomo begging the rich to come back

from the Hamptons to New York City doesn't seem worth a governor's
time. (The Hill)

* Great interview

with economic historian Adam Tooze. (New York Magazine)

* Looming bad times
for
bond investors? (Financial Times)

* Trump executive order would reshore supply chains

for essential drug ingredients, creating a domestic market. (Politico)

* The liability shield is one of the most radical pieces of legislation

ever filed. (Washington Monthly)

* Sen. Warren on preventing private equity

from scooping up cheap housing again. (Washington Post)

**Click the social links below to share this newsletter**

 

[link removed]

 

[link removed]

 

[link removed]

 

[link removed]

 

[link removed]

 

[link removed]

YOUR TAX DEDUCTIBLE DONATION SUPPORTS INDEPENDENT JOURNALISM

Copyright (C) 2020 The American Prospect. All rights reserved.
_________________

Sent to [email protected]

Unsubscribe:
[link removed]

The American Prospect, Inc., 1225 I Street NW, Suite 600, Washington, DC xxxxxx, United States