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Unsanitized: The COVID-19 Report for Sept. 21, 2020

The Pandemic Remains the Story of This Election
Plus, BlackRock gets high on its own supply

 

The media sets up at the makeshift Ruth Bader Ginsburg memorial outside
the Supreme Court. (Graeme Sloan/Sipa USA via AP Images)

First Response

**** The last time I wrote this newsletter the whole world was
different, because Ruth Bader Ginsburg was alive. That's the popular
media construction anyway. It's easier and more comfortable to cover a
Supreme Court fight than a pandemic, and political reporters have more
contacts who can speak to those dynamics than epidemiologists.
Politicians are more familiar with the judicial confirmation territory
too, and are better practiced at giving a good quote about it.

I don't want to minimize the event, of course. Having a Republican
lock on the Court for the next generation would be a prime way for
conservatives to entrench their power whether they gain politically or
not (though the court's power is also a political construction, more
on that in a moment). But I don't want to minimize a virus that has
killed 200,000 Americans either.

The political media wants to say that the presidential race is utterly
upended now, that it will now be played out entirely on the issue of...
I guess abortion, because given its salience in the mass media debate,
apparently the Supreme Court is a branch of government that mostly
decides whether women will carry pregnancies to term.

Let's first question whether that's true. There are some indications

that Democrats are more fired up

about the Court this year. There are also indications that absolutely
nothing of consequence, in a year of all consequence, has dislodged the
presidential race from its
fundamental state. I actually don't think that's true; I think the
pandemic did shift expectations about who would win. If you look at that
question
,
Trump was ahead

until the virus hit. But it's true that the race has floated along a
relatively narrow range

for months. Joe Biden has an 8-point lead over Donald Trump

in the latest poll, unchanged from a month ago. Most minds are made up.

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**** Second, let's question the idea that even the debate
over the Court will not incorporate the pandemic. The top point that
Biden has made about the judiciary prior to Ginsburg's death was that
Trump had backed a case that will be heard a week after the election
,
which would nullify the Affordable Care Act on the absurd grounds that
the individual mandate penalty has been revoked and is therefore no
longer a tax. Biden always makes sure to say "in the middle of a
pandemic" when he warns that Trump is trying to take health insurance
away from 20 million people.

This is feeding directly into how Biden and the Democrats are talking
about the Court fight. Biden put healthcare atop the list

on Sunday of what's at stake with the vacancy, following the
successful script of the 2018 midterms, which were largely about the
same issue. His aides have openly suggested

that they would link the Court to the pandemic and healthcare more
broadly. Speaker Pelosi said directly yesterday that Trump would rush to
fill Ginsburg's seat because he "wants to crush the Affordable Care
Act
."

There are ways to protect healthcare in a pandemic no matter what
happens with Ginsburg's seat. (More on that tomorrow.) But if the race
has "shifted" to the Supreme Court, and one side is going to use the
Supreme Court to talk about the coronavirus, has it really shifted?

I've definitely seen pandemic fatigue set in with the media. They
welcome the opportunity to change out the script and tell a different
story. The first question in next week's presidential debate has
certainly been rewritten. But 200,000 Americans are dead. The expiration
of needed supports for the economy threatens a very damaging economic
path for millions. This Supreme Court battle intrudes on that

and probably makes whatever glimmer of hope there was about a deal
before the election fade away. The pandemic is a world-historical event,
and the government's record couldn't be more evident to the nation.
This will still be the terrain on which the presidency is gained or
lost.

Incidentally, the fact that a personnel vacancy could mean so much as to
disrupt an election suggests that the Supreme Court has grown too
powerful. Whether you believe that steps must be taken to challenge
judicial review

as a concept or just that the legislature should be routinely reacting
to Court rulings with legal policy responses, the judiciary does need to
evolve into a branch with power that is checked, rather than the final
arbiter of what the other two branches attempt to do.

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BlackRock's Big Score

Last week we had a big old fight about whether the Fed was using its
power to deliver benefits to financial elites under the guise of a
coronavirus rescue. At the tail end of last week, we learned that
BlackRock, the hand-picked executor of the Fed's bond-purchasing
mission, is to a disproportionate degree buying their own
exchange-traded funds
,
including those tied to junk debt. The funds it purchased grew much more
popular to investors, with twice as many inflows into them as a year
before, and in particular BlackRock funds saw more money flood into
them. While BlackRock makes little from the Fed directly, this indirect
benefit from other investors parking their money with BlackRock is worth
a lot in fees.

Sure sounds like... the Fed is using its power to deliver benefits to
financial elites under the guise of a coronavirus rescue. Maybe it was
inevitable that the Fed's buying would spur other buying in the same
funds, and that the central bank needed an experienced manager like
BlackRock to help trade in debt markets. Maybe that's why Congress
should have ensured broad and durable relief extending through the
entire emergency, rather than having the one long-lasting stimulus go to
an institution that inherently delivers its rewards in an unbalanced
fashion.

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17
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Today I Learned

* The CARES Act delayed but did not prevent recession and suffering.
Finances were improved

but are being eroded with the same rapidity now. (Bloomberg)

* Economic pain moving higher up the food chain
,
as many families subsist on debt. (Wall Street Journal)

* Housekeepers have been hit particularly hard
.
(New York Times)

* The coronavirus is an airborne virus, the CDC acknowledges

seven months after Trump told Bob Woodward exactly that. (Los Angeles
Times)

* A breakdown of how delivery apps are ruining restaurants

during the crisis. (American Economic Liberties Project)

* Meat back on store shelves and on sale
,
and somehow farmers are just as screwed by this as they were during
shortages. (Wall Street Journal)

* Kindergarteners taking a gap year
.
(Politico)

* Eleven thousand infections on planes

out of six million-plus, over a six-month stretch, is not that much.
(Washington Pot)

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