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.
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the election, which would nullify the Affordable Care Act on the absurd grounds that the individual mandate penalty has been revoked and is therefore no longer a tax.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.
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.
