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Unsanitized: The COVID-19 Report for Sept. 30, 2020

Mass Layoffs Signal Choppy Transition for the Economy

Plus, a Congressional deal seems remote,
and more on school reopenings

 

28,000 friends of Donald Duck, seen here at Disneyland Paris, lost their
jobs on Tuesday. (Raphael Lafargue/Sipa via AP Images)

First Response

**** The final jobs report before the election comes out
on Friday. But none of the layoffs from the airline industry that I
mentioned yesterday

will be part of it; they're prohibited under the terms of the CARES
Act until October 1. In fact, since the reference week for the September
jobs report was in mid-September, none of the mass cuts that have been
announced in the past few days will be reflected in it; we'll only see
the impact of them after the election.

For the airline industry that means "more than 30,000 jobs
"
cut; the expectation of upsized loans for United and American
,
the two companies doing the lion's share of the layoffs, doesn't
seem to matter. For Disney it means 28,000 job losses
,
announced yesterday amid the continued closures and capacity limits at
its theme parks. The 9,000 job cuts at Royal Dutch Shell

reflects its global workforce, and has more to do with restructuring
around renewables, but also the crashed demand for oil.

This is just the beginning. Leisure, travel, and hospitality industries
have been limping along without doing mass layoffs, but the breaking
point is being reached. With no major studio releases set until
Thanksgiving
,
it's a matter of time before we see mass layoffs and closures at movie
theaters.

Eighteen retailers have filed for Chapter 11 in the first half of the
year, and store closings in that period hit an all-time record
.
Eleven other retailers filed for bankruptcy just between July and
mid-August (a 45-day span); over 10,000 storefronts are scheduled for
closure and 25,000 are expected by year's end. If anything that's
likely to worsen and reach down into the small business sector, as
appropriate uncertainty from the public about congregating

makes it impossible for them to hold on. Retail landlords are now
reduced to begging for a share

of e-commerce revenue, something with no basis contractually, really an
attempted barter for pulling down rents.

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**** The news isn't all bad in the economy. Sectors
like construction, a consequence of a homebuying boom in our K-shaped
recovery, are doing well. People not spending on air travel and concerts
are spending on home furnishing, and there's been a minor
manufacturing surge
,
helping payrolls bounce back. But the kind of mass layoffs have been
announced are of the type you only see in a deep recession, when large
companies know that they will not get back to the pre-crisis demand
level for many years. And that can feed on itself.

The economy has been too unbalanced in the direction of consumer
spending and retail sales in particular. This will be a painful
shake-out to alter that balance. We have work that needs to be
done-climate adaptation, green tech, care work-but no investment in
it as of yet. So you're only seeing the downside of the paradigm
shift.

With this transition shrouded a bit with the return to work from the
pandemic, we won't see the true impact for a few months. After the
election ends, a new set of politicians will have to face this difficult
reality or suffer through permanent economic paralysis. They have tools
to ease the transition. Will they be used?

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The Mall-pocalypse, With Numbers

I hasten to even give this much attention, but Nancy Pelosi and Steve
Mnuchin are talking again. They are making a "late push
"
for a deal on coronavirus relief before Congress shuts down for the
election (oh, and confirming a Supreme Court justice). I know Mnuchin
wants more glorifying profiles

in the New York Times Magazine, but his obstacle, as ever, is Donald
Trump.

Agreeing to a deal would be an admission that Trump failed previously at
restoring the economy through his own leadership. And Donald Trump
doesn't do admissions, especially around failure. He's certainly
willing to bribe the public with more Trump Checks, but I'm skeptical
that he'd go back on his message.

So before you get to Mitch McConnell's reluctance to this-as well as
the complications of putting a spending bill in the middle of the
Supreme Court melee-I don't believe it's possible to get Trump on
board. And there are lots of outside conservative groups with
ideological opposition to spending public money, and no key "get"
for them like a corporate bailout. Wake me when there are more than just
talks.

One hilarious side note: Pelosi's bill offsets some spending by
reversing CARES Act provisions that allow businesses to "carry-back"
and "carry-forward" losses in 2020 and offset past and future
taxable revenue. As we know, that's what Trump did to pay next to
nothing in taxes for years. Yet as recently as March this was a business
as usual measure for economic "stimulus," one that makes no sense at
all unless you think that money will trickle down to workers and the
economy. And Trump is an indicator that it doesn't work at all.

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Schools Update

Quick aside on yesterday's discussion

of the knotty decision to reopen schools:

New York City reopened schools

on a limited, partial basis yesterday, the same day that the city's
positive coronavirus testing rate reached its highest level in months
.
It defies reality to believe that none of the personnel going into
schools this week have coronavirus, that none of them will pass it to
others, and that those people won't pass it to their families. The
only question is whether that will have an impact on mortality and at
what rate. The idea that we're "failing students," in a vacuum,
fails to reckon with this.

Days Without a Bailout Oversight Chair

188
.

We Can't Do This Without You

Today I Learned

* Hospitals never got the early warning they needed on surges of cases
because their data systems malfunctioned
.
(Wall Street Journal)

* Good preliminary news

on the Moderna coronavirus vaccine, but the data are quite limited.
(Fox29)

* How worker burnout is hurting

economic growth. (Axios)

* Tennessee is the latest state to eliminate all its coronavirus
restrictions
.
(Tennesseean)

* New California law on nursing home facility transparency
.
(Los Angeles Times)

* Remdesivir has a limited benefit for patients but a billion-dollar
benefit

for Gilead Sciences. (Washington Post)

* All the disinfectants airlines are spewing into the air

in their safety theater operations could have a negative health effect.
(Wall Street Journal)

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