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Doug Henwood
Posted: 09 May 2020 04:08 PM PDT
When Trump promised to end “American carnage” in his inaugural address, he had no idea he’d end up presiding over mass death and economic collapse, but history can be a brutal ironist. Here’s a look at the bloodletting in the job market, which is central to most people’s economic well-being.
Most of the time, the monthly employment report from the Bureau of Labor Statistics is of interest mostly to econogeeks, but the April 2020 edition, released on Friday, May 8, was like no other since the end of World War II. The scale of job loss and the rise in unemployment had nothing even remotely like a precedent.
Employers axed 20.5 million jobs in April, making for a decline of 12.9% from a year earlier. That annual loss is a record by a wide margin. The previous record was -7.6% in September 1945, during the postwar demobilization. Total employment is back to where it was in February 2011, which was itself back to March 2004 levels, thanks to job losses in the Great Recession (a name that might have to be retired) and its aftermath. And that March 2004 level was the same as February 2000’s, because of the 2001 recession and the jobless recovery that followed it. So, employment now is the same as it was 20 years ago even though the adult population is up 48.3 million, or 23%. (See graph below.) We’re almost certain to see giant losses for May when the numbers are released on June 5.
Almost every sector and subsector lost jobs, and lots of them. Manufacturing lost 1.3 million; retail, 2.1 million; professional and business services, 2.1 million; education and health, 2.5 million (including 1.4 million in health care, a bizarre development during a massive health crisis); and leisure and hospitality, dominated by bars and restaurants, 7.7 million. Government was off almost a million, all of it at the state (-180,000) and local (-801,000) levels. It’s distressing that at a time when people need public services, they’re being radically shrunk, and a sector that is supposed to counter recessions by maintaining stable employment is acting instead as a downward accelerant. During the worst phases of the Great Recession, state and local government employment declined at an annual rate of around 1.5%; April’s level was off 4.5% from a year earlier. Austerity at the state and local level undermined the early Obama stimulus package, and continued as a drag on growth throughout the expansion.
Weirdly, average hourly earnings rose an eye-popping 4.6%—for the month, not the year, over 15 times the 2018–2019 average. The reason is that job losses are concentrated among lower-paid workers, which pushed up the average. It’s likely job losses will climb up the income ladder in coming months.
These figures come from a survey of employers, known as the establishment survey. The BLS also conducts a survey of people, known as the household survey. It was, if anything, even grimmer than its establishment counterpart. It found job losses a million higher (the two surveys often differ in the short term, though they always wind up telling the same basic story). The employment/population ratio, the share of the adult population working for pay, cratered, falling from 60.0% in March to 51.3% in April, an all-time low. (See graph below.) In the 1950s, before the mass entry of women into the labor force, it occasionally got as low as 55%. Its all-time high was 64.7% in April 2000. It never got anywhere near that high again, either in the early 2000s or in the 2009–2019 expansion, because of a mix of an aging population and weak economic growth. If people were employed at that rate now, there’d be almost 35 million more working.
Unemployment soared, the rate rising more than 10 points from 4.4% to 14.7%. As the graph below shows, that’s well above previous peaks since the end of World War II. It took almost two years after the 1929 stock market crash for unemployment to hit 15%; we’ve done it in two months.
The BLS reports a fairly obscure set of stats called employment flows, which measure moves in and out of employment and unemployment. They report that almost one in six people who were employed in March lost their jobs in April.
As sharp as the April increase was, it was partly masked by massive labor force withdrawal. You have to be actively looking for work to be counted as unemployed, and no doubt some people either saw no point in searching, or no way to do it with so much shut down, so they weren’t counted as unemployed. Also, as the BLS reported, many people who were actually laid off reported themselves as “absent from work.” Had they reported themselves as laid off, the unemployment rate would have been close to 20%.
The BLS also reports a broader measure of unemployment, called U-6, which includes people who are working part-time who want full-time work and those who’ve given up the job search as hopeless. That rose from 8.7% to 22.8%, shattering its previous record of 17.2%, set in April 2010. The histories of the headline unemployment rate, aka U-3 (the one discussed in the previous paragraph) and the broad U-6 rate are graphed below. Also shown is a predecessor of the U-6 rate, known as U-7, which was reported from 1970 through 1993. The pure verticality and magnitude of the April spikes read like a poke in the eye.
Of course, employment and unemployment vary widely by demographic, as the graphs below show. While every category saw a sharp rise in unemployment and fall in employment, the white and educated started from better positions and remain there. But things stink for them too.
If you’re desperate to find a cheering note buried amidst all the red ink, almost all the unemployed report themselves as being on temporary layoff rather than as permanent job losers. Similarly, a Washington Post–Ipsos poll reports that 58% of laid-off workers think it’s “very likely” they’ll get their old jobs back, and another 19% say it’s “somewhat likely.” One hopes this is based on sound reasoning and not wishful thinking.
Judging from the behavior of the stock market, which has recovered much of the ground it lost in the sharp selloff in February and March—and which is actually slightly above where it was a year ago—Wall Street thinks this damage is a brief bit of unpleasantness that will soon pass and come fall, it’s back to the races. I don’t get this. Thousands, maybe millions, of small and mid-sized businesses won’t be able to survive months with no revenue, and so won’t be around to reopen. Second and/or third waves of viral attacks, which are quite possible, would make a quick rebound even less likely. We’re in lots of trouble, and no one in charge knows how to get us out of it.
Data note The monthly unemployment figures for 1929–1938 were assembled by the National Industrial Conference Board, predecessor of today’s Conference Board, a think tank and data shop. They’re available from the NBER. The modern employment statistics system originated in the late New Deal, as a project of the Works Progress Administration.
Alice Speri
https://theintercept.com/2020/05/06/coronavirus-prison-jail-mass-incarceration/
THERE IS A fundamental flaw in the models that Trump administration officials have used to project the curve of the coronavirus outbreak as it rips across the United States. Those models were based on other countries’ experiences with the virus — from China to Italy — and do not account for a uniquely American risk factor: mass incarceration.
There are currently 2.3 million people incarcerated in U.S. jails and prisons. The U.S. accounts for 4 percent of the world’s population and 21 percent of its prisoners. While incarcerated people have been released in trickles across the country as the U.S. has become the global epicenter of the pandemic, those releases are hardly making a dent in the density of prisons and jails, and they pale in comparison to the tens of thousands of people freed by other countries with far lower incarceration rates. So far, at least 295 men and women in the U.S. have died after contracting the virus behind bars — a figure that is climbing by the day and remains “dramatically underreported,” according to experts who have been tracking it. The official number of positive cases reveals little beyond how few incarcerated people are being tested: In the handful of facilities with higher test rates, most people were found to be positive. Eight of the 10 largest outbreaks in the country are in prisons and jails.
But mass incarceration is not only causing people to die of Covid-19 behind bars. As corrections facilities become hot spots, the virus is also rapidly spreading into the surrounding communities. A new model released in April by the American Civil Liberties Union suggests that when jails are accounted for, estimates of the death toll are off by at least 100,000. And that’s for jails alone — not prisons or immigration detention facilities.
It’s not hard to imagine why prisons and jails have quickly become the epicenter of the epicenter.
“There’s no such thing as social distancing in prison,” a man incarcerated in a New York state maximum security facility wrote to me. “How can an incarcerated individual maintain social distancing in a population of over 2,000?” he added. “With 240 men to a block, minus the guards? With every man dwelling on all sides of one another, constantly?”
“This is a time bomb,” another incarcerated man wrote. “The mess halls and lines traveling to and from, among other places, are areas of mass density. They have cut down the amount of people per table, but we’re still less than 2 feet part.”
“I am sure you can imagine that the jailhouse is in the worst state it has been in anyone’s memory,” added the man, who has spent the last 25 years in prison. “In this particular warehouse, it seems like every day we hear of someone in the cell sick, taken to a section of cells for the sick, placed in the medical department’s isolation, or taken to an outside hospital.” The prison had finally started to provide inmates with face coverings, though not real masks, and hand sanitizer, he noted. Hand sanitizer is usually banned in prisons as contraband, a lawyer said on a recent call, “because it has alcohol in it, and I guess they think that people are going to drink it.” The fact that some prisons are starting to relax the rule is a sign of how dire the situation is getting, and how little officials are actually doing to stop the virus.
The psychological toll, too, is even more staggering behind bars. “I haven’t been this stressed out since I was on trial,” a third man wrote to me, before listing all the loved ones who were falling ill as he sat in prison unable to be with them. “It’s the fear of calling home and finding out someone else I held close to the heart passed away. It’s the fear of never being able to see someone I love ever again and not being able to pay my proper respects.”
Everything Is an Undercount
For the past two months, Sharon Dolovich and a team of volunteers have been tracking the tsunami sweeping through the country’s prisons and jails. Early on in the U.S. outbreak, when prisons’ first response to the threat was to shut down visits, Dolovich, a professor at the University of California, Los Angeles School of Law, started a spreadsheet to keep track of each facility’s Covid-19 policies. Prisoners’ rights lawyers were scrambling to help their clients. Dolovich made the document public “so people don’t reinvent the wheel,” she told me. “People were writing demand letters and starting to do court filings to go to court and try to get people released. Not everybody had to do it for themselves — I could share.”
As the virus spread, the spreadsheet quickly grew into a more ambitious project — and the most complete picture we have of how the crisis is impacting jails and prisons across the country. Dolovich started hearing from former students, advocacy groups, and strangers offering to monitor releases, juvenile detention centers, and requests filed with each facility, among other information. When state corrections departments began to post regular updates about positive cases and deaths, many in response to mounting public pressure, a group of volunteers started recording the data daily to track the growth of cases over time. They also scoured news reports and tapped into other resources to provide data that was sometimes more up to date than the official tallies.
“Everything we are seeing is undercounted,” Dolovich emphasized. “It’s in the interest of the prison systems to pretend these people are not dying from Covid.”
Born as a crisis response tool, the project also aims to document the pandemic in the country’s prisons and jails before officials have an opportunity to rewrite its history. “One of the things that we’re predicting is that after the initial emergency has passed, the number of people who died during this period and the number of people who are reported to have died from Covid are going to be very different,” Dolovich said. “I think jails and prisons are going to pretend that people died from other things.”
As incomplete as the data might be, UCLA’s Covid-19 Behind Bars project is breathtaking for the scale of the catastrophe it captures. It is also an indictment of a criminal justice system that both enables so much death and fails to account for it. In addition to 295 deaths, the UCLA project has documented at least 21,007 coronavirus cases among incarcerated people, as well as at least 8,754 cases, and 34 deaths, among corrections staff. No government agency has compiled or made public this collective data.
Confirmed cases and deaths documented by the UCLA Covid-19 Behind Bars Data Project as of May 6. The figures are climbing by the day and remain “dramatically underreported.”
Graphic: Soohee Cho/The Intercept
According to U.S. Immigration and Customs Enforcement, 674 detainees have tested positive, out of 1,346 people tested. So far, at least one detainee has died of the virus, at the Florence staging facility, a transfer center in Arizona. At least four ICE staff at the Hudson County Jail in New Jersey have died. And cases were reported, among both staff and detainees, at more than 40 other facilities. Cases were also confirmed at more than two dozen correctional facilities for youth, according to the UCLA data.
Part of the reason there’s no official comprehensive dataset tracking the impact of the coronavirus in the U.S. prison system is because there is no unified system, but rather a tangle of federal, state, and local jurisdictions. “It’s always been a decentralized fight, state by state, county by county,” said Dolovich.
That presents both a massive challenge and an opportunity, added Dolovich. Because there is no centralized body overseeing Covid-19 responses in prisons and jails, advocates have been lobbying hundreds of officials across the country, while armies of lawyers have been working around the clock on behalf of individual clients and entire classes of people. They have filed motions with dozens of courts arguing for relief that can range from diversion to lower sentences to compassionate release. “The level of advocacy effort and involvement is actually astonishing and inspiring right now,” Dolovich said. “There’s no easy levers. So people are basically slamming their heads against the wall and trying to see if there’s any kind of weakness they can take advantage of to help their clients.”
“We’ve had 40 years of a legal system that’s been crafted with the effect of making it extremely hard to provide any kind of meaningful constitutional relief for people,” she added. “We respond to any kind of social crisis with incarceration, and what we’re seeing now is the fruits of those efforts.”
Each Its Own Universe
The fragmentation of the U.S. criminal justice system — a sprawling, decentralized bureaucracy with thousands of jurisdictions and powerholders — has long served to hide the full cost of mass incarceration. Comprehensive data on those the U.S. deprives of their freedom is virtually impossible to obtain in a timely fashion, if at all. The coronavirus crisis has laid bare this systemic failure more than ever. The country’s more than 3,000 jails, in particular, function like fiefdoms. While state corrections departments oversee prisons, and the Bureau of Prisons runs federal facilities, jails operate under the authority of thousands of local officials. Only a handful of states collect data from their jails.
“There isn’t centralized reporting, responsibility, or accountability,” said Insha Rahman, director of strategy and new initiatives at the Vera Institute of Justice, which has long sought to fill in the gaps in official data and recently launched a new tracker monitoring Covid-19 responses across the jail system. “It’s actually literally going county by county to get that information.”
“It’s so hard to know what’s happening across the entire country,” echoed Udi Ofer, the director of the ACLU’s Justice Division. “We don’t have one criminal justice system in the United States, we literally have thousands of criminal justice systems. … It’s so decentralized that every jail, every prison is its own universe.”
The ACLU model attempted to account for the “uniqueness of every jail and community,” said Lucia Tian, the organization’s chief analytics officer, adding that their model was the combination of “over 1,200 individual models with tailored information from those particular jail systems and counties.” The model predicted that, with highly effective social distancing in place, accounting for jails would increase U.S. Covid-19 deaths by 98 percent — from a projected 101,000 to 200,000. With less effective social distancing, jails could bump up the death toll by 188,000, for a predicted total of 1,177,000.
The UCLA project tracks jails too — though only a few jail systems are making coronavirus data readily available to the public, mostly in larger cities where scrutiny is highest. Those jails have been devastated by the virus. At Rikers Island, in New York City, where three inmates and nine corrections staff have died, the reported infection rate is almost 10 percent. At Cook County jail in Chicago, where six inmates and two staff have died, almost 900 inmates and staff have tested positive.
In prison, age is a significant risk factor for tens of thousands of people: There are nearly 200,000 incarcerated people over the age of 55, a number that has spiked by nearly 300 percent over the last 20 years. That’s indicative not just of how many people the U.S. incarcerates, but also for how long. About 40 percent of people in prison have at least one chronic health condition such as asthma or diabetes, which makes those individuals particularly susceptible to serious illness with Covid-19.
But if people in prison tend to be older and sicker, people in jail move in and out at much higher rates, making those incarcerated in jails especially vulnerable to catching the virus and more likely to spread it. There were 10.7 million jail admissions in 2018 alone — and each admission puts police officers, guards, and other staff, in addition to the incarcerated, at risk of exposure. “Social distancing is even worse in jails, because jails are meant to be temporary holding facilities,” Ofer said. “People tend to live in dormitory-style rooms with bunk beds 2 feet apart, if that. There’s absolutely no social distancing in jail, it’s kind of a one-two punch.”
The situation at Rikers and Cook County offers a bleak foreshadowing of mass deaths to come across the jail system, particularly in rural areas where health care access is already a chronic issue and jails often fill in for a lack of services. A report released in April by Data for Progress warned that rural communities are particularly vulnerable in a pandemic. In those communities, jails are often filled with people who have substance abuse problems or are too poor to post bail. Worse, the report warns, rural jails “are frequently located in counties that lack hospital capacity to handle the coronavirus pandemic.” In Mississippi, Montana, North Dakota, and West Virginia, for instance, more than one-third of people held in jails are in counties with no ICU beds.
“We know rural America is at least a couple of weeks behind the curve,” said Rahman. “But when it comes, it’s going to be devastating. … It will be worse than Rikers.”
Death by Incarceration
The solution, health experts and prisoners’ rights advocates have been saying all along, is simple: Prisons and jails should release far more people as quickly as possible. “Mass incarceration was a public health crisis before Covid-19, but the pandemic pushed it past the breaking point,” said Ofer. “We need governors and prosecutors and judges, and we need the president of the United States, to act immediately and dramatically to reduce jail and prison populations to stop the spread of Covid-19, not only in jails and prisons, but in the broader community.”
But as calls for people to be released have echoed across the country, and some states, like Vermont, have taken decisive action, many law enforcement officials have resisted what they called the “mass release” of incarcerated people. In general, jails have reduced their population at a much higher rate, about 25 percent, according to a new analysis by the Prison Policy Initiative. But prisons, the same analysis found, “have released almost no one.” Some officials have suggested that those incarcerated for “violent” crimes are unworthy of release — a distinction that has long crippled efforts at substantial criminal justice reform, even before the current crisis. “If we don’t tackle the question of people serving time on violent convictions, we can’t meaningfully stop the spread of Covid-19,” said Rahman. “That’s just not going to make a meaningful dent.”
Still, U.S. officials are hanging on to mass incarceration even as its devastating impact becomes ever clearer. In Louisiana, rather than releasing people, officials have started to isolate the sick in a section of the Louisiana State Penitentiary, commonly known as Angola, that had been shut down following a long history of human rights abuses. In New Jersey, officials promised that hundreds of people would be released — but weeks later only a handful had been freed, and 37 people have died in prisons across the state. And in New York, Gov. Andrew Cuomo exploited the coronavirus pandemic to roll back weeks-old bail reforms that helped drastically reduce the jail population.
“It’s the Willie Horton factor, which is what kills reform and decarceration in the United States all the time,” said Ofer, citing the recent backlash against New York’s bail reform. “You could have a 97 percent success rate, where people are going home, being with their families. All you need is one case — which is inevitable — of someone committing a crime again and the backlash begins. And unfortunately, that’s what motivates many politicians.”
Cuomo, who has been hailed as a rare leader for his coronavirus response — mostly outside New York — has repeatedly resisted addressing the question of mass incarceration in his daily Covid-19 briefings. “He has actually done less than other governors, including Republican governors or governors in Republican states, in terms of releasing people,” said Rahman.
“Fifty-five people died in a nursing home in Cobble Hill, Brooklyn,” she added, noting that nursing homes have rightfully been a priority for the governor. “There is no reason to believe that won’t happen in one of our prisons or one of our jails.”
A report released last week by Human Rights Watch is just the latest to call on officials across the board to use their full powers to “avert an imminent catastrophe.”
“Without urgent action, Covid-19 in jail and prison populations will cause substantial suffering and death. Authorities need to take immediate action to protect incarcerated individuals and to limit transmission,” the report reads. “Failure to do so will undermine measures already in place outside of jails, including orders to shut down businesses and to ‘shelter in place,’ by adding to further spread. Failure to do so will contribute to overwhelming the capacity to meet medical needs. Failure to do so will result in avoidable deaths.”
For at least 295 people — and probably far more — it’s already too late.
Together, the ACLU and the UCLA Prison Law and Policy Program have compiled data on all known Covid-19 fatalities in prisons and jails into a spreadsheet, “Death by Incarceration,” which lists the names of the dead wherever they are known. Along with information about the facility are the person’s age, race, date of death, and notes about any requests for early release they might have made before dying. The spreadsheet also includes a column for “words of remembrance.”
“It felt really weird to just write names without memorializing it, so we left the box for anyone who may have known the person who has died and just wanted to share a few thoughts,” Ofer said. A few days ago, someone found the database, which is public but not widely advertised, and filled in the box next to Susan Farrell’s name. Farrell, a 74-year-old who died at the Women’s Huron Valley Correctional Facility in Ohio on April 8, had served 30 years in prison, always maintaining her innocence in the killing of her abusive husband. She had last attempted to have her sentence commuted in 2018, but her request was denied.
“I loved her laugh,” wrote the anonymous commentator, who said the two had been best friends at the prison and used to play Scrabble together almost every day. “Guilty or not, Susan is not the sum of her crime and could have served the community so much better had she been allowed to eventually leave the prison.”
Lee Fang
https://theintercept.com/2020/05/08/coronavirus-republicans-bank-deregulation-loans/
REPUBLICAN LAWMAKERS and finance industry lobbyists are using the coronavirus pandemic to press regulators into rapidly waiving financial safeguards for community banks.
And so far, banking regulators have obliged, lifting rules imposed after the 2008 crisis that limit risk-taking and require banks to undergo more strenuous audits.
But experts are warning that the deregulatory blitz, sold as a fix to stimulate business by encouraging more lending, raises the potential for a flood of small bank failures, potentially lengthening economic woes and risking the need for future bank bailouts.
The flurry of advocacy began in March just as the imminent threat of the pandemic seized headlines. That month, several GOP lawmakers contacted regulators at the Federal Reserve and the Federal Deposit Insurance Corporation to urge officials to adjust the threshold at which community banks may qualify for exemption from all risk-based capital requirements.
“We strongly urge you to use the full measure of discretion afforded by Congress to maximize capital simplification and regulatory relief for the greatest number of community banks,” wrote Rep. Denver Riggleman, R-Va., in a letter signed by eight other House Republicans, obtained via a Freedom of Information Act request by The Intercept. In addition to Riggleman, the letter was signed by Reps. Scott Tipton, R-Colo.; Bill Huizenga, R-Mich.; Ann Wagner, R-Mo.; Frank Lucas, R-Okla.; David Kustoff, R-Tenn.; Barry Loudermilk, R-Ga.; John Rose, R-Tenn.; and Blaine Luetkemeyer, R-Mo.
The letter asked that the Federal Reserve and FDIC lower the Community Bank Leverage Ratio from 9 percent to 8 percent, a move that would qualify about 400 banks for special exemption from scrutiny over the level of risk taken on by a bank. The lower leverage ratio, the lawmakers argued, would “support credit in thousands more communities across the country.”
Ordinarily, a complete revision of federal regulation would require months of deliberation, an open comment period, and an agency justification backed by evidence. But the Covid-19 emergency short circuited the process, and within weeks, the leverage ratio was lowered.
The demands in the congressional letter were slipped into the CARES Act, the $2.2 trillion bailout legislation. The legislation waived a number of regulations on banks, from accounting standards to loan limits, and temporarily lowered the Community Bank Leverage Ratio to 8 percent through the duration of the public health crisis.
Banks must maintain a certain risk-based capital requirement, meaning banks with riskier assets must have higher levels of capital to contain potential losses. Bank stability is also measured by a leverage ratio, which is simply the percentage of capital held of total bank assets.
Lowering the Community Bank Leverage Ratio means hundreds of banks can hold onto less capital while avoiding standards that restrict the types of risk they take on.
“The industry and regulators love to use jargon and impenetrable language but the leverage ratio is nothing but a capital buffer that a bank has to have to absorb losses itself so it won’t have to be bailed out by taxpayers,” said Dennis Kelleher, president of the financial reform group Better Markets.
“It would really turn logic on its head to now say the banks should not have to comply with those other rules and they should get a lower leverage ratio,” added Kelleher.
“The whole idea of lowering capital requirements to respond to a pandemic is wrong,” said Jeremy Kress, an assistant law professor at the University of Michigan School of Business.
Kress noted that while public attention was focused largely on “too big to fail” mega-banks, hundreds of community banks failed during the crisis that started with the 2008 financial collapse.
In a recent academic paper, Kress observed that out of the 489 banks that failed and were resolved by the federal government from 2008-2013, all but nine were community banks. The failures of community banks during this period cost taxpayers nearly $50 billion. In contrast to the bailouts of large Wall Street banks, which were eventually paid back with interest to the federal government, the small bank bailouts only incurred significant costs.
The failure of small banks during the last crisis also created a cascading effect of economic damage, as small businesses and entrepreneurs around the country were cut off from credit, driving one of the slowest economic recoveries in U.S. history, Kress argues.
If the current pandemic leads to a wave of defaults, more community bank failures could be on the horizon. The deregulatory push to reduce capital requirements could hasten the level of bank failures, said Kress, exacerbating the current economic crisis.
“When we see a bunch of small institutions failing simultaneously,” said Kress, “that leaves a lot of communities and small businesses and individuals without needed access to credit.”
“The efforts that we are seeing today to weaken the Community Bank Leverage Ratio is only going to make the community banking sector more fragile and increase the likelihood of another collapse of small banks,” he added.
The leeway for regulators to exempt the community banks from risk-related assessments came from special authority granted by the Economic Growth, Regulatory Relief, and Consumer Protection Act, a law passed in 2018, the largest bank deregulation measure ushered in by Trump.
The measure removed proprietary trading restrictions from banks with $10 billion or less in assets imposed by the so-called Volcker Rule following the 2008 crisis. It also instituted the Community Bank Leverage Ratio rule, allowing small banks to skirt regulatory standards known as Basel III capital rules if they maintain a leverage ratio between 8 and 10 percent. The FDIC set the rate at 9 percent following the law.
The Congressional Budget Office, the independent body that analyzes legislation, suggested at the time that the deregulatory push would threaten the stability of community banks, which would likely use the exemption to chase higher returns by taking on more volatile loans and securities. The CBO noted that even a Community Bank Leverage Ratio of 9 percent could raise FDIC costs by increasing the probability of bank failures and FDIC bailouts.
After winning passage of the 2018 law, the industry went to work lowering the Community Bank Leverage Ratio well before the pandemic. Over the last year, representatives from the Mortgage Bankers Associations and the Independent Community Bankers Association, have pressed for the 8 percent standard, a push that was renewed in recent months, lobbying disclosures show.
Rep. Jodey Arrington, R-Texas, a former FDIC official under President George W. Bush, was one of the lawmakers pushing to loosen the standard.
In a separate letter to bank regulators, Arrington asked for “ample time” for community banks to comply with the new 8 percent Community Bank Leverage Ratio and for the change to be made permanent. “Furthermore,” the congressman wrote, “in order to maintain long-term economic growth, the CBLR should be maintained at the minimum eight percent threshold, allowed by P.L. 115-174, beyond the COVID-19 pandemic.”
The Texas lawmaker dismissed concerns that reducing regulations could raise the risk of bank failures.
“Relaxing regulations in a reasonable way including lowering reserve requirements by 1% for community banks during the immediate crisis as well as our longer term economic recovery will provide greater access to much-needed capital for small businesses, which, in turn, will help keep people employed and strengthen our overall recovery efforts,” said Arrington in a statement to The Intercept.
“Lenders of all sizes will certainly have an increase in risk to their loan portfolios; however, banks have an incentive to operate responsibly in order to stay solvent and community banks who operate on a thinner margin need some targeted relief to continue serving rural communities like mine,” the lawmaker added.
Bank industry advocates have long argued that capital requirements have curbed lending. But banking industry watchdogs have pointed out that a growing body of empirical research shows the exact opposite and that well-capitalized banks make more loans and more high-quality loans.
Research from the Bank for International Settlements found that “higher bank capital is associated with greater lending.” Morris Goldstein, a former fellow at the Peterson Institute for International Economics, in a review of economic literature, similarly found that “better capitalized banks lend more, not less, than weakly capitalized ones.”
Still, community banks have won a series of deregulatory measures in part by leveraging their relative popularity in contrast to the big banks. Despite the economic risks of lifting bank rules, small banks have been at the tip of the spear in weakening financial safeguards.
“Everybody loves community banks, right?” said Kress. “They’re the most sympathetic industry in Congress because every member has a community bank in their district. They do a lot of residential and small business lending, they sponsor your kids’ kickball team, they seem far removed from the financial engineering of Wall Street.” “Community banks, motherhood, and apple pie,” chuckled Kelleher.
The lofty reputation held by community banks, however, has concealed the danger they pose to the economic system.
“The bank industry pushes in a lot of different ways,” Kelleher noted. “They do it directly against the regulators, they do it indirectly through their legislative allies. It’s really pretty sad how many are using the pandemic as nothing but a pretext for their deregulation agenda that they’ve been asking for for years.”
AÃda Chávez
https://theintercept.com/2020/05/06/ohio-coronavirus-reopening-unemployment/
AS OHIO BEGINS to ease restrictions and reopen its economy, the state is inviting employers to report employees who don’t show up for work out of concerns about the coronavirus for possible unemployment fraud. This means that workers who stay home because of concerns about unsafe conditions at work may be investigated and potentially stripped of unemployment benefits.
There is now a form on the Ohio Department of Job and Family Services website for employers to confidentially report employees “who quit or refuse work when it is available due to COVID-19,” flagging them for the state’s Office of Unemployment Insurance Operations. The form asks employers for basic contact information; whether their business was deemed essential during the pandemic; for details on whether the employee quit or refused work, including the date and an explanation; and whether they maintain “the safety standards that are required by the Ohio Governor’s Office.”
Under Ohio law, individuals cannot receive unemployment benefits if they can work but refuse job offers or quit their job “without good cause.” Ohioans who are unemployed as a result of the pandemic but don’t qualify for regular unemployment benefits can also register for a new federal unemployment program, Pandemic Unemployment Assistance, that provides unemployment plus a federally funded $600 per week until July 25, the Ohio Department of Job and Family Services announced in late April.
This includes coverage for individuals whose doctors have advised staying home and for those who have child care duties. But, so far, employees aren’t protected if they are afraid of catching the virus at work.
“We first encourage employers to engage in dialogue with an employee who expresses reluctance to return to work about the measures that employers are taking to help employees feel safe,” a spokesperson for the department wrote in an email. Republican Gov. Mike DeWine, who was the first governor in the country to close down schools in response to the pandemic, is gradually reopening the state five weeks after issuing a stay-at-home order. Some Ohioans have already been authorized to return to work, and retailers are scheduled to reopen on May 12.
“Efforts to reopen our economy while stopping the spread of the coronavirus will be successful only if we make workers’ safety our number one priority,” Sen. Sherrod Brown, D-Ohio, told The Intercept in a statement. “There are a lot of reasons a worker may not safely be able to return to work even when the employer calls them back. Any process that overlooks those reasons or emphasizes returning to work over worker wellbeing is a risk to public health.”
Kevin Garvey, president of United Food and Commercial Workers Local 75, said it’s “unfortunate” that people are being forced to make a decision between losing their jobs and exposing themselves to the virus, adding that the local union has been able to “create and establish policies and procedures” to protect its 30,000 members.
The pandemic has highlighted the low wages earned by many essential workers, many of whom actually make more money on unemployment. “The vague notice that Ohio employers received on May 1, 2020 does not help workers who are weighing these very heavy decisions,” Sarah Ingles, board president of the Central Ohio Worker Center, said in a statement. “The notice does not define what constitutes a ‘good cause’ exemption, and by doing so, may exclude many Ohio workers who have justifiable reasons for not returning to work and from receiving unemployment insurance benefits.”
Ingles went on to note that “while the state did not take the time to define what a ‘good cause’ exemption includes or does not include, it did have time to develop an online form where employers could report employees.” She added that “any policy that affects workers should address the very real and serious concerns they are facing.”
As The Intercept has previously reported, some small businesses are concerned that if their employees can receive more money from unemployment, then they won’t be able to rehire them and therefore, qualify for the benefits of the Paycheck Protection Program.
The department also emphasized that its process for determining whether to deny unemployment benefits for a refusal to return to work existed prior to the pandemic. As part of the review process, it said, “Facts will be sought from both the employer and employee and each party has an opportunity to appeal the decision to the Unemployment Compensation Review Commission.”
Matthew Cunningham-Cook, Jonathan Michels
https://theintercept.com/2020/05/06/coronavirus-hca-healthcare-nurse-union-busting/
THE LARGEST HOSPITAL corporation in America, HCA Healthcare, is using the coronavirus pandemic to delay and undermine a union election for 1,600 nurses in North Carolina.
After nurses filed in March to hold an election, HCA Healthcare petitioned the National Labor Relations Board, or the NLRB, to delay the vote because of the pandemic. In the meantime, it hired professional union busters costing $400 an hour to conduct meetings inside Mission Hospital in Asheville, urging nurses to oppose joining a union.
And while the corporation stands to rake in $4.7 billion in CARES Act benefits, the number of coronavirus cases in North Carolina is steadily growing, and nurses say they had to fight for basic personal protective equipment, or PPE.
“Instead of HCA using those resources and money and effort to prepare for Covid-19 and have proper PPE, they chose to put it into union busting instead,” said Sarah Kuhl, a registered nurse with Mission’s oncology research department.
“I feel like that put us significantly behind to being adequately prepared for Covid-19,” Kuhl said.
HCA Healthcare has 184 facilities in the United States and the United Kingdom. HCA CEO Sam Hazen makes $27 million annually — 478 times the median HCA employee, and the company paid out over $600 million in dividends to shareholders last year. Of HCA’s $51.3 billion in revenue in fiscal year 2019, over $21 billion of that came from the government in payments from Medicare and Medicaid. In 2000, the corporation pleaded guilty in the case of the largest Medicare fraud in U.S. history and paid $1.7 billion in fines. U.S. Senator Rick Scott, R-Fla., was CEO at the time.
In February 2019, HCA turned its sights to North Carolina. The for-profit, multinational conglomerate purchased the nonprofit Mission Hospital for $1.5 billion. Since being absorbed into HCA, Mission has been plagued by widespread complaints over cuts in staff, poor communication, and lack of access to basic supplies and PPE. The nurses filed for an election in March, with 70 percent of them signing union authorization cards, to join National Nurses United — which has 150,000 members and currently represents nurses at 19 HCA facilities across the country.
Only 37 out of HCA’s 184 hospitals have a union presence. The majority of HCA facilities are located in states with low union density like Florida and Tennessee, where the corporation is headquartered. In North Carolina, just 2.3 percent of the workers are union members.
“Our campaign is an enormous thing for North Carolina and the South,” said emergency room nurse Trish Stevenson. “This would set an enormous precedent for change, and it could happen nationwide for nurses. Health care is in dire need of a shift away from profit-driven corporations.”
HCA’s attorneys are now arguing before the NLRB that the vote should be further delayed, claiming in filings submitted to the NLRB that “[HCA] submits the election should not be scheduled prior to or during the time it and its healthcare professionals, including Registered Nurses, are dealing with the surge of Covid-19 patients and caring for those patients.”
But the megafirm has still found the time and money to wage an aggressive anti-union campaign inside the hospital, demanding nurses leave their shifts to meet one-on-one with consultants from the Crossroads Group. HCA declined a request for comment from The Intercept.
ON MARCH 15, nurse Jill Rabideau was pulled away from her patients on the pulmonary step-down unit to join a group of other health care workers for a “Labor Relations” session led by a union-busting consultant.
“It was an hour and 15 minutes of listening to an angry little man in a room that probably had 15 other nurses that were pulled off their units,” Rabideau said. “That was very frustrating to me, but particularly when everybody had all these Covid questions.”
Kuhl attended a meeting with anti-union consultants on March 13. “If you are coming in there without a whole lot of knowledge about unions and you don’t do any more research, then it can be misleading,” said Kuhl. “A lot of things we heard is that you won’t be able to talk to your manager anymore,” Kuhl said. “We heard you won’t get wage increases until the contract is signed, which is not true.”
Department of Labor disclosures show consultants from the Crossroads Group were hired at $400 an hour. The Crossroads Group is active in the union-busting space, routinely appearing in Department of Labor filings. In 2003, the NLRB found that firm’s founder Michael Penn had violated federal labor law when he threatened employees would lose their benefits at Jensen Enterprises if they voted in a union, and again in 2010 when he threatened to sue a pro-union employee at DHL for “defamation.” The Crossroads Group did not respond to a request for comment.
On March 24, Stevenson was working in the emergency room when she was asked to cover for another nurse so her colleague could attend a one-on-one meeting with a consultant.
Facing an upsurge in Covid-19 patients, Stevenson recalled, “We couldn’t afford to let staff go to attend the meeting, but they were demanding it.”
“They were just demanding that we cover nurses on their assignment, even though it’s inappropriate because we just couldn’t afford to let staff go at that time.”
Nurses throughout the hospital were already reeling from staff cuts, an exodus of experienced RNs, and rising nurse-to-patient ratios in the wake of HCA’s takeover of Mission — problems that are all exacerbated by the pandemic.
“We’re already in a state of red and then we’re being faced with a pandemic that is just further going to compromise us,” Stevenson said. “My worry is we just won’t be able to respond at all to the pandemic.”
HCA ALSO GIVES its affiliated physician groups ample legal and accounting support in applying for the CARES Act’s Paycheck Protection Program loans, HCA documents show. The CARES Act explicitly requires that recipients of PPP loans stay neutral in union organizing campaigns.
Former NLRB Chair Wilma Liebman told The Intercept that the arrangement raises concerns.
The situation “demonstrates the tensions and hypocrisy of a hospital chain taking advantage of the provisions of the law but at the same time — exploiting the law to take advantage of the nurses,” said Liebman.
“The neutrality language is very important so that companies or lawyers that are benefiting from these loans aren’t using them to fight unionization,” said Liebman.
HCA has disclosed that it will accrue over $4.7 billion in benefits from the CARES Act, from direct payments to hospitals, accelerated Medicare payments, payroll tax deferrals, and other benefits. On an April 21 earnings call, HCA CEO Sam Hazen told Wall Street analysts “Fortunately, I see HCA Healthcare as uniquely positioned to help define the new normal and capitalize on new opportunities.”
John Logan, a labor historian at San Francisco State University, noted the irony of HCA’s actions during the Covid-19 pandemic.
“[Nurses] really are organizing to have a voice over life and death issues,” said Logan. Speaking generally of anti-union campaigns in the health care space, Logan said, “Hospital administrators still think that it’s appropriate to bring in outside consulting firms that cost millions of dollars.” Hospital anti-union campaigns can cost well over $1 million, a report from the Economic Policy Institute found last year.
“I think in some ways there’s been an intensification of anti-union campaigns because employers believe they can get away with things right now that they wouldn’t in normal circumstances” Logan said.
WITH A FOR-PROFIT megacorporation newly in charge of their hospital, nurses had witnessed working conditions and patient care standards deteriorate rapidly. When the pandemic hit, union nurses acted quickly, demanding safe policies for PPE and transparency about the hospital’s plan for Covid-19 response.
“Some members of the community are thinking, ‘Why are [nurses] trying to organize a union during this pandemic?’” said Kuhl. “Organizing a union during this pandemic is more important than it was before Covid-19 existed. If we don’t get the things that we need to care for the patients who will be affected by Covid-19, either directly or indirectly, the outcome is going to be bad.”
“That’s why even though we don’t have a union yet, we did the PPE petition,” said Kuhl. “It was vital. Time was of the essence that we do that to ensure safety for our patients during this pandemic.”
Before the nurses submitted a petition for PPE on April 2 during the pandemic, said 35-year nurse Kelly Tyler, management “came through one day and gathered up all the masks, even if you were wearing a mask, they asked you to take it off. You had to go through the house supervisor to get a mask for patient care.”
After the petition was delivered, noted Tyler, HCA “made masks mandatory in patient care areas,” a victory for union nurses. “Maybe it’s not out of the goodness of HCA’s heart that they are doing this, maybe it is from the union and our demands,” Tyler said.
Kuhl put it more bluntly.
“There was zero transparency about how much PPE we had,” said Kuhl. “We weren’t getting information about how many Covid patients we had. None of that was information that we were privy to until we used collective action to get that information. That was a direct result of the union.”
Despite the delayed vote, Rabideau is confident of victory when the election is finally held. In the midst of the coronavirus pandemic and its uncertain aftermath, Mission nurses say that the cost of losing would be too high.
“[Nurses should] not always be the ones giving up to make corporations thrive because the price is not acceptable,” Rabideau said. “The actual cost is at the expense of our patients. … Nurses are not OK with that. I can say that unequivocally. We didn’t become nurses to make a shareholder wealthy.”
Ryan Grim, Akela Lacy
https://theintercept.com/2020/05/06/new-jersey-democratic-primary-albio-sires-hector-oseguera/
A QUINTESSENTIAL New Jersey game of musical chairs brought Albio Sires to Congress. The music started in November 2005, when Sen. John Corzine was elected governor. To fill his Senate seat, the party machine tapped Rep. Bob Menendez, which created an opening for Menendez’s House seat. Albio Sires, the mayor of West New York, had previously run for Congress in the 1980s as a Republican, but was by then also state assembly speaker and a loyal member of the Democratic machine. He won a special election in 2006 with 90 percent of the vote and has represented the North Jersey district, home to the largest Cuban diaspora outside Miami, ever since.
Sires has kept a low profile, largely voting with the party on the House floor. It’s hard to measure obscurity, but fewer than 70 Democrats have served in the House as long as Sires, and suffice it to say that Sires has not managed to translate that seniority into a national profile or measurable power in Washington.
Corzine, a Wall Street baron, was unseated by Republican Chris Christie after one term; Menendez remains in office, and both he and Corzine have escaped prison despite being the targets of federal investigators. Sires has hung on, but as New Jersey’s Cuban population ages and migrates south to Florida, his district has become more diverse, with growing Central and Caribbean American populations.
In South Jersey, the Norcross bosses, whose family has had a longstanding stranglehold on local politics, are holding on. George Norcoss, known as one of New Jersey’s most influential unelected bosses, holds an outsize influence over parts of the state legislature’s South Jersey delegation. An insurance executive, he’s been accused of pulling strings to benefit from a state corporate tax incentive program that came under federal investigation last year. His brother, Donald, represents parts of South Jersey in the U.S. House. Donald is a former labor leader who was elected to the state assembly in 2009. He was later appointed to fill a vacant state Senate seat, which paved the way for his eventual transition to Congress.
Now Sires, who did not respond to requests for an interview for this article, is facing his first serious primary election since 2006, from insurgent challenger Hector Oseguera, an attorney with roots in Honduras and the Dominican Republic who specializes in fighting money laundering. Oseguera, who attended Boston University at the same time as Alexandria Ocasio-Cortez, but didn’t know her then, was one of the earliest volunteers on her 2018 campaign to unseat then-Rep. Joe Crowley in Queens and the Bronx.
Oseguera is part of a wave of challengers taking on the local machine in North Jersey. Sires, a functionary of the West New York/Union City machine, known as the Hudson County Democratic Organization, or, often, simply, “the Organization,” is just one of many targets, with a slate of six Hudson County Freeholder candidates allied with Oseguera challenging incumbents up and down the ballot.
Elsewhere in the Garden State, similar battles are taking place, as the coalescing of activist groups and insurgent candidates launches a statewide assault on the cartoonishly corrupt New Jersey Democratic establishment, which long considered itself immune from the biannual annoyance of elections. So immune that the party did nothing to shunt aside Menendez in 2018, even as he faced trial for corruption charges in the midst of his reelection. Little-known challenger Lisa McCormick, with next to no financing, stunned the party by winning 38 percent of the vote in the primary that cycle against Menendez, who got off on a mistrial due to a hung jury and won reelection.
Now McCormick, a perennial candidate for local and federal office who has never disclosed the names of any campaign donors, is challenging state Rep. Bonnie Watson Coleman. Coleman was elected in 2014 as the state’s first African American woman in Congress and has a pretty solid progressive voting record.
Rep. Josh Gottheimer, among the most conservative House Democrats, is facing a serious challenge from Dr. Arati Kriebich, a neuroscientist and former Gottheimer volunteer. In South Jersey, Rep. Jeff Van Drew, a party boss elected in 2018 and concerned about losing a primary challenge from the left this cycle, switched and became a Republican. Democratic Reps. Bill Pascrell and Donald Payne Jr. are also facing primary challenges from Zina Spezakis — who’s also running under the “Not Me. Us.” slogan — and Alp Basaran, and Eugene Mazo and John Flora, respectively.
Across the river in New York, party bosses there are taking primary challenges extremely seriously, with Reps. Eliot Engel, Jerry Nadler, Yvette Clarke, Greg Meeks, Carolyn Maloney, and Tom Suozzi all facing challenges. In Queens, Zohran Mamdani is running for State Assembly against five-term incumbent Aravella Simotas, and there are a handful of other state legislative races in play, with a number of challengers backed by the Democratic Socialists of America and No IDC NY, a progressive organizing group that targets the state legislature. Last week, the Board of Elections, which is controlled by Gov. Andrew Cuomo, booted Sen. Bernie Sanders off the primary ballot, with the transparent goal of depressing progressive turnout and dampening support for challengers. A judge issued an order Tuesday reinstating Sanders’ name on the ballot. The state board of elections plans to appeal the order.
OSEGUERA LUCKED INTO an advantage on the ballot — or, more accurately perhaps, he made his own luck — that may be consequential in a race between two people with such little name recognition. In New Jersey, machine politicians for decades have implored supporters to “vote column A all the way,” a phrase that became synonymous with loyalty to the party machine. Column A on New Jersey ballots is reserved for candidates running as a slate, from the president down to the freeholder, a county legislative position.
Typically, it is only the machine that is able to put together that sort of slate, as progressives rarely have a Senate candidate fielded, and even more rarely a body in the presidential primary. But this time, Sanders supporters recruited veteran activist Larry Hamm to run for Senate against Cory Booker, enabling a slate to be formed with Hamm and down-ballot insurgents. (They had wanted Sanders to sit at the top of their slate; his campaign, however, never filed the paperwork needed to join it.) The machine, meanwhile, was torn between various presidential candidates — including Booker — and so declined to make any endorsement. That meant that the progressive slate in Hudson and Union counties, the population centers of the 8th District, was eligible for the A column. Because there was more than one slate, the A spot was decided in an April 9 drawing — which the insurgents won. Voters accustomed to casting their ballots “A all the way” will wind up supporting Oseguera.
“There’s going to be a set of voters that show up and do their regular Democratic duty of ‘vote A all the way,’ and they might swing this election,” said Oseguera, who was raised in the district by a mother who taught and a father who held a variety of jobs, from handyman to cashier to driver. Oseguera said that when his phone bankers end the call by reminding voters to “vote column A,” they often reply with a version of “Of course, we always vote line A.”
Ron Bautista is one of the six freeholder candidates running under the Sanders-inspired slogan of “Not Me. Us.,” in a district that largely covers Hoboken. “[Oseguera’s] campaign has brought together grassroots progressives like it has never been done before,” said Bautista, who last year challenged a 16-year city council incumbent, picking up a third of the vote without a slate or developer money, which the New Jersey establishment tends to rely on. “We are at the heart of machine politics in New Jersey, and sometimes progressives have run individually against the machine. For the first time, we have a progressive slate of candidates from Senate to county government.”
Three of the slate’s nine freeholder candidates failed to qualify for the ballot, coming short on signatures, while a number of those who qualified did so by collecting electronic signatures amid the pandemic. Roger Quesada was one of them, drawing on his professional experience in e-commerce and marketing. “There’s no slate in recent memory that has ever been this organized and with a strong digital infrastructure,” he said.
Behind the scenes, the machine had been plotting a coup, which could undercut the insurgents’ column A advantage. New Jersey Democrats, including Menendez and Hudson Democratic County Chair Amy DeGise, had been publicly calling for an “open primary,” which would mean that presidential candidates would not be bracketed with any of the competing slates. “The Biden and Sanders camps accepted an open primary,” DeGise said in a New Jersey Globe article. “We’re proud to support having an open primary. Democrats will reunite once the nomination is made.”
But on April 23, the Oseguera campaign learned that the machine, contrary to its public statements, had applied to be bracketed with Joe Biden, whose campaign had also applied to be bracketed with Hudson County Democrats. The Hudson County Clerk’s office granted the request, which means that Biden will appear at the top of Column B, along with Sires. This may counteract some of Oseguera’s “vote A” advantage. The deadline to submit bracketing letters was April 1, meaning that the machine had been planning the move long before Sanders announced on April 8 that he would be suspending his campaign.
Whether Sires snagging a bracket with Biden will undercut the insurgents’ slate depends on just how well the latter group can communicate the straight-ticket issue to supporters, said John Farmer, New Jersey’s former attorney general and current director of Rutgers University’s Eagleton Institute of Politics.
“The effect is really gonna depend on the strength of the parties in any given location,” Farmer said, pointing to the intense competition between the local Democratic machine and insurgent groups in deeply blue New Jersey. “Depending on where you are in the state, the party could be really rock solid, or there could be a lot of upheaval and competition going on.”
Perhaps ironically, it’s now in Oseguera’s interest to encourage voters to split their ticket if they choose to support Biden after Sanders suspended his campaign. Though he was removed from the New York primary ballot, Sanders will still appear on the ballot in New Jersey and most other states. Since Sires is now bracketed with Biden, voters will have to pay special attention if they want to support other primary challengers.
OSEGUERA’S RACE AGAINST Sires presents intriguing parallels to Ocasio-Cortez’s, as well as divergences. Where Crowley was a local machine boss with national ambitions, on his way to becoming speaker of the House, Sires is merely a local machine boss. Like Ocasio-Cortez, Oseguera has raised precious little money, relying instead on a network of volunteers and local activist groups to power him to victory in what is likely to be an extremely low-turnout election against an incumbent with little name recognition in a community that has changed underneath him. (Crowley was far better known in Washington than in his home district, which cost him dearly in the primary.)
Oseguera, unlike Ocasio-Cortez, does not label himself a democratic socialist; given the number of refugees of the Cuban Revolution in the district, the term remains deeply toxic. But he supports the gamut of policies that tend to define more progressive Democrats: a Green New Deal, Medicare for All, a wealth tax, $15 minimum wage, and so on. He does not, however, have the support of Justice Democrats, the group that backed Ocasio-Cortez’s challenge and has been conservative in handing out endorsements since then. He said that when he appealed to the group for an endorsement, they told him that Sires’s voting record wasn’t egregious enough to merit the group’s scarce resources. (The group recently launched a Super PAC.) Unlike the incumbents whose challengers Justice Democrats has backed this cycle, like Dan Lipinski and Henry Cuellar, Sires is a reliable Democratic vote and has such a low profile that ousting him would barely make a ripple.
Like Ocasio-Cortez, Oseguera’s campaign, two months out from the primary, is broke, with $22,731 raised and less than $4,000 cash on hand, according to the latest filing. For Ocasio-Cortez, a viral campaign ad, combined with national coverage, helped elevate her profile and raise last-minute money, which she pumped into canvassing, phone and text banks, and digital ads. But Osegeura is campaigning amid a pandemic, with effective shelter-in-place orders, so there’s likely to be very little canvassing between now and the July 7 primary. The Oseguera-Sires contest will be fought out digitally and over the phone, a disadvantage for Sires, who has virtually no virtual presence and doesn’t even have a campaign website. Oseguera managed to buy Sires’s domain name — AlbioSires.com — and redirect it to his own fundraising page.
For a machine boss, Sires has little to show in the way of money, though he’s well ahead of Oseguera. This cycle, Sires has raised just $340,000 and had $237,000 cash on hand as of March 31. His biggest donors are the local trade unions and the Desert Caucus, an extremist, pro-Israel group that endorses settlements and the annexation of Palestinian territory.
Former Navy SEAL Will Sheehan is also in the race, though has yet to file fundraising numbers with the Federal Election Commission.
OSEGUERA’S CAMPAIGN IS using its limited funds to target Democrats likely to vote by mail ahead of the primary, which was postponed from June. Democratic Gov. Phil Murphy has been pushing for an all-mail primary, but backtracked after pushback from machine leaders across the state. Because of their lack of cash, Oseguera said, his campaign narrowed its voter data purchase to 75,000 Democrats in the district who regularly vote in general elections but don’t show up for primaries. Vote-by-mail, he hopes, will make those people more likely to return a ballot if volunteers can get texts and calls in front of them enough. He expects 50,000 votes will be enough to win.
The postponement of the primary and the expansion of vote-by-mail add to the uncertainty around how the election will go, said Farmer of Rutgers University. While the changes could hamper the machine’s overall advantage, the insurgents’ fundraising barriers could also make it difficult to reach voters. “The burden of getting the information to the voters is greater because of the restrictions that we’re all operating under now,” he said.
Partial vote-by-mail “does put an additional burden on the parties if they want to maintain their encouragement of straight-ticket voting that they really have to be sort of out there and more aggressive in encouraging that then probably they have been in the past,” he said, noting that campaigns’ inability to do in-person canvassing is another complicating factor.
The shift toward vote-by-mail has made the machine nervous. DeGise told the New Jersey Globe that she opposes mail-in voting and was pushing for an all in-person vote because loyal machine voters are more likely to turn out to the polls, whereas making mail an option would bring more voters in. Mail-in voting, she said, is “just not in the culture here. … Our strongest voting blocks are not going to vote by mail,” adding that voting by mail is more popular among Democrats who don’t typically vote.
Eleana Little, a Hudson County freeholder candidate, cited the machine’s machinations as evidence that they’re nervous about insurgents harnessing that strength. “We’ve got people,” she said. “We’re building a grassroots movement and have over 100 volunteers. We’re phone-banking every day and hearing from people that they’re excited about what we’re doing. Hector comes from a working-class background and has mountains of student loan debt, like so many millennials. He didn’t have $50,000 to drop on his own campaign like some candidates do, and he doesn’t have wealthy family connections. So the war chest is small, but there are a lot of people involved. I think the fact that the machine is so nervous shows that we’ve built substantial momentum, and it’s not just all in our heads.”
