Wednesday, May 13, 2020
The Trump Depression Will Be Worse Than the Great Depression
https://www.commondreams.org/views/2020/05/12/trump-depression-could-be-worse-great-depression
The Trump Depression Could Be Worse Than the Great Depression
Avoiding a dystopian future requires as a first step repairing the elements of fragility in our political economy.
by
John Buell
5 Comments
Friday May 8 unemployment statistics were as dire as many had expected. The US Department of Labor released an unemployment rate for April of 14.7%, the worst since the Great Depression and far surpassing the worst days of the Great Recession. In light of these numbers it is not surprising that cries for “opening up” the economy would gain traction among many working class citizens. Nonetheless the push for resuming normal economic activity, present from the earliest days of many state lockdowns, raises an important question. The CARES act, despite its many flaws, did include substantial relief for unemployed workers. Often more than their initial incomes, as Lindsey Graham complained. Yet even from the earliest spike up of the unemployment rate not only did many object, large numbers flocked to food banks, often for the first time in their lives. Many food banks were soon overrun. Shocking as this was, few in the corporate media pursued in any depth the question of why the US had become as economically fragile as it was ecologically.
Paycheck to Paycheck
Both President Trump and much of the corporate media often touted historically low unemployment rates. Yet a generation of working class economic stagnation had left its mark. According to an investigation by The Guardian, demand at food banks has increased by eight times in some areas. About a third of people interviewed by the outlet at food banks last month had never before needed food assistance.
Kristin Warzocha, CEO of the Greater Cleveland Food Bank, said the trend was not surprising considering the precarious circumstances working Americans are accustomed to living in, 78% of workers living paycheck to paycheck and 45% reporting that they have no savings account.
Unemployment Rate: What is in a Number?
Another Part of the answer as to why food banks were overwhelmed is that bad as recent unemployment numbers have been they understate the degree of the economic collapse.
The headline number is deceptively optimistic, though not because the counters are being dishonest or manipulative. Bureau of Labor economists treat a worker doing a part time job while looking for full time work as being fully employed. In addition, they treat workers who are discouraged by labor market conditions as not being part of the labor market. These conceptual decisions tilt the final unemployment number down. How much is a function of overall labor market conditions.
If there are few full time jobs available many will, quite sensibly, cease looking. The search for a job is itself a financially and psychologically costly endeavor. In such cases an unemployment number that does include involuntary part times and discouraged workers may be considerably higher than the headline number. The Economic Policy Institute calculates that if both of these factors were accounted for the current unemployment rate would be 23.7%
In addition to understating the numbers of the unemployed, most standard accounts neglect the anxieties occasioned by the whole process. The entire unemployment insurance system treats the unemployed as always having to prove that they are worthy of assistance. In addition the system continually conveys the impression that the individual’s salvation depends on his/her alone. This message can often evoke panic or despair and desperation.
Losing a job is more than just a job, and healthcare is life itself’
By virtue of historical accident the United Sates ties health insurance to jobs. Even before the arrival of Covid-19 the invitation to a disaster was apparent. Common Dreams reported on one major study of this vulnerability: while many people who lose their coverage will be eligible to enroll in Medicaid, the HMA report notes that “one-third of all jobs” are located in states that have opted not to expand the program.
As a result, the report warns, the total number of uninsured Americans could rise from around 28 million today to 40 million, with the impact disproportionately falling on the millions of people living in states that have not expanded Medicaid.
The consequences are already horrific and bound to get worse. As a Yale University study just demonstrated, 65,000 to over 100,000 Americans die every year because they do not have health insurance (see the Yale study here), and see Commondreams.org for workers losing healthcare.
Laws in DC mean little if the Federal government and the states are dysfunctional and illegitimate
Statistics about the number of people who could afford a surprise bill are scary enough by themselves. But the implications are more dire when we consider the broader performance of the US welfare state. One is fortunate to get an unemployment check in a week. Just as with the affordable care act roll out, state systems were overwhelmed by numbers of first time claimants. But why this problem? Years of budget crunching austerity have thinned the public sector. The program itself is a complex mixture of state and federal regulations, and over the years fewer and fewer unemployed were eligible. The Pew Research Center has found that, “although more than 11 million Americans filed first-time unemployment claims in March, the wide variety of methods states and territories use to administer their jobless programs have resulted in wide disparities in who has received their payments, and how much those payments were worth. As a result, only 29 percent of jobless Americans received benefits in March” Just in time supply chains seem to be a well supported corporate goal but hardly a priority for desperately needed and well deserved worker benefits.
During the Depression the sheer scope of unemployment changed perceptions of the unemployed. But attacks on the welfare state from the seventies on along with racial polarization fostered at least among some citizens characterization of the unemployed as lazy and unmotivated. The consequence was further denigration of the government perceived as helping these others.
Some Concluding Thoughts
Much of the discourse on Covid-19 treats the virus as though it is an external dragon-like creature that must be slayed before the economy can get going. But what if an aggressive capitalism and the Covid-19 dragon have a symbiotic relation and grow together. An inegalitarian racially polarized society whose government is distrusted and shrinking is fertile ground for explosion of the virus. The deaths entailed often feed a deeper politics of demonization of minorities and foreigners, who often become disposable commodities sacrificed in the interest of toxic forms of growth. Trump’s constant attacks on China hide the role his bashing the CDC played in accelerating the global pandemic. He then takes the vast carnage and the necessary regulations it has required as an opportunity to “open the economy.” It sounds good to some but in practice amounts to doubling down on the financial, health, and safety deregulatory strategies that have left so many of our citizens so vulnerable.
Avoiding a dystopian future requires as a first step repairing the elements of fragility in our political economy. Historian Heather Cox Richardson argues: ”If the protesters really wanted to protect workers, wouldn’t they be demanding laws that replaced lost wages? Other developed countries have passed exactly those sorts of measures, putting their economies into a holding pattern as the pandemic passes.” Trump’s maniacal deregulatory agenda must be rolled back. Food, shelter, and clothing do not require abandonment of clean water standards. During the pause a robust safety net provides workers and communities can debate and implement safe, just, and sustainable forms of economic growth.
Trump Labor Department Encourages States to Help Employers Report Workers Who Stay Home Due to Covid-19 Fears
"There's a plague outside but the Trump administration is strongly encouraging states to solicit employer tips on workers staying home."
by
Jake Johnson, staff writer
https://www.commondreams.org/news/2020/05/12/trump-labor-department-encourages-states-help-employers-report-workers-who-stay-home
With the stated goal of rooting out "waste and fraud" in the unemployment insurance system, President Donald Trump's Department of Labor is openly encouraging ongoing state efforts to help employers report workers who refuse to return to their jobs out of fear of contracting the coronavirus.
In guidance (pdf) issued Monday as several states across the U.S. continue the dangerous process of reopening their economies amid the pandemic, the Labor Department said "states are strongly encouraged to request employers to provide information when workers refuse to return to their jobs for reasons that do not support their continued eligibility for benefits."
"We also strongly encourage states to remind employers and the public about the claimant and employer fraud resources within each state," the guidance reads.
Under current law, those who refuse "suitable work" are ineligible for unemployment benefits. In a frequently asked questions section on its website, the Labor Department says that "general concern" about contracting Covid-19 is not sufficient grounds to refuse work and still receive unemployment benefits.In a statement accompanying the new guidelines, the Labor Department's Assistant Secretary for Employment and Training John Pallasch said "states and localities have an obligation to spot and detect waste and fraud in the unemployment insurance system and report it to the U.S. Department of Labor's Office of Inspector General and other appropriate channels."
Michele Evermore of the National Employment Law Project told CNBC that workers could attempt to "argue that the conditions are no longer safe and try to refuse work" if they believe their employers are not taking sufficient steps to ensure a safe workplace. Despite demands from nurses and other frontline workers, the Labor Department has not issued emergency standards requiring employers to follow the CDC's coronavirus safety guidelines.
Marcia Brown, writing fellow at The American Prospect, reported last week that Ohio and Iowa have set up websites designed to help employers report workers for committing "unemployment fraud" by declining to return to work amid the Covid-19 pandemic.
Labor advocates in Texas—which is currently in the process of reopening its economy—have urged the state to continue providing unemployment benefits to those who do not want to return to their jobs out of fear of contracting the virus. In a private call with lawmakers earlier this month that was leaked to the media, Texas Gov. Greg Abbott admitted that reopening the economy "will lead to an increase and spread" of Covid-19.
More than 30 million people in the U.S. have applied for unemployment benefits since mid-March, but—as HuffPost reported last week—some governors are working to cut off the expanded unemployment benefits that were authorized under the CARES Act before many people have even received their first checks.
The CARES Act's expansion of unemployment insurance—an additional $600 per week on top of state benefits—is set to expire at the end of July.
As many workers risk losing their unemployment benefits to stay home out of fear of infection, the Trump administration and Republicans in Congress are working to protect corporations from legal responsibility for employees who contract Covid-19 in the workplace, an effort that has drawn outrage from labor unions and progressive advocacy groups.
Mary Kay Henry, president of the Service Employees International Union, told the Financial Times on Monday that corporations and governments are endangering the lives of workers by pushing them to return to their jobs before it is safe.
"Healthcare workers are concerned that, without PPE and training for the retail and restaurant workers who are going back, we're rushing into another spike," Henry said. "It feels like governments and corporations feel that some lives in this nation are worth sacrificing."
Senate Staffer Warns Congress 'Sleepwalking Toward a Gut-Wrenching, Painful Failure' on Covid-19 Relief
"Congress appears to be on its way to passing a half-assed bill that underachieves on public health, families/workers, state/local governments, businesses," the senior Democratic aide fretted.
by
Jake Johnson, staff writer
https://www.commondreams.org/news/2020/05/12/senate-staffer-warns-congress-sleepwalking-toward-gut-wrenching-painful-failure
A senior Democratic Senate staffer wrote in a lengthy Twitter thread Tuesday morning that he has "never been so dejected" by the state of policymaking on Capitol Hill and warned that Congress is "sleepwalking toward a gut-wrenching, painful failure" as it refuses to advance solutions that match the scale of the coronavirus pandemic and the resulting economic disaster.
"As an economic staffer in Congress, I'm worried we're about to watch a slow-motion train wreck," wrote Charlie Anderson, a senior adviser to Sen. Michael Bennet (D-Colo.). "More than 80,000 Americans are dead. Unemployment is at Great Depression levels. Yet, Congress appears prepared to massively undershoot what's needed."
Anderson, who works on economic and tax policy, ripped the Republican Party for its "appallingly destructive" behavior during the crisis—including its push for legal immunity for corporations and cynical complaints about the rising deficit—and voiced fear that Democrats are likely to continue offering inadequate solutions "in the hope of appearing more 'reasonable.'"
"If Dems start at half a loaf, Republicans will cut that in half (or more) too," Anderson said. "Due to 'cost concerns' we risk underdoing unemployment benefits, housing, food assistance, healthcare."
"Congress appears to be on its way to passing a half-assed bill that underachieves on public health, families/workers, state/local governments, businesses," Anderson continued. "I hope I'm wrong, but this feels inevitable. I don't see how the dynamic changes much. I see Republicans becoming increasingly dug in around cost concerns that make very little sense. The cost of insufficient action is devastating. I don't know what else to say."
Anderson's assessment came just hours after Senate Majority Leader Mitch McConnell (R-Ky.) told reporters Monday that he and his Republican colleagues have "not yet felt the urgency of acting immediately" on another coronavirus stimulus package, even after a Labor Department jobs report found that a record 20.5 million people in the U.S. lost their jobs in April.
The unprecedented wave of job losses brought the official unemployment rate to 14.7%, the highest level since the Great Depression.
"I'm in constant communication with the White House and if we decide to go forward we'll go forward together," said McConnell. Larry Kudlow, President Donald Trump's top economic adviser, said last Friday that formal talks between the White House and Congress have been "paused" and may not resume until next month.
Senate Minority Leader Chuck Schumer (D-N.Y) promised that the Democratic relief package will be "Rooseveltian." According to Axios, the Democrats' bill is expected to contain around $1.2 trillion in proposed spending—just over half the size of the $2.2 trillion CARES Act.House Democrats, meanwhile, are preparing to introduce a coronavirus stimulus package as soon as this week that is reportedly expected to include an expansion of federal nutritional assistance and Medicaid, additional funding for states and hospitals, $25 billion for the U.S. Postal Service, and another round of direct payments to U.S. households.
"I can't get over Axios calling $1.2 trillion 'whopping,'" Dan Riffle, former policy adviser to Rep. Alexandria Ocasio-Cortez (D-N.Y.), tweeted on Monday. "That's smaller than the first stimulus, which we all recognize wasn't enough."
"If this was going to be 'Rooseveltian' as advertised (i.e. on the scale of the Great Depression) it would need to be ~$9-10 trillion," Riffle added.
The Democratic bill is not expected to include Rep. Pramila Jayapal's (D-Wash.) Paycheck Guarantee Act, which would authorize direct payroll grants to businesses with the goal of averting mass layoffs.
On Twitter, Jayapal voiced frustration with Democrats who claim the plan would be too difficult to implement in short order.
"It isn't difficult," said Jayapal, the co-chair of the Congressional Progressive Caucus. "It's just about having the will to do so and goal of stopping mass unemployment. What's worse than difficult is devastation we are facing."
Freelance journalist Jon Walker echoed Anderson's concerns about the Democratic legislation, tweeting Tuesday that he is worried House Speaker Nancy Pelosi (D-Calif.) is "going to bring to the floor a comically too-small show bill of like $1 trillion with only pretty normal stuff yet is [dead on arrival] in the Senate."
"It will be labeled the left flank so the compromise will be $400 billion and company liability waiver," Walker predicted. "House Dems should pass a bill equal to the size and shape of this crisis: $4 trillion with triggers and just refuse to negotiate. Make it a 'take it or leave it' as we approach July 31 when lack of action will cause a true Great Depression."
"Democratic leadership has had plenty of input from progressive thinkers over the past couple of months. They just care more about the input from corporate lobbyists."
by
Jake Johnson, staff writer
https://www.commondreams.org/news/2020/05/12/no-excuse-house-dems-unveil-1815-page-bill-would-bail-out-corporate-lobbyists-omits
House Democrats on Tuesday unveiled a sprawling 1,815-page, $3 trillion coronavirus relief package that spurns many of the key demands of progressive activists and lawmakers while including proposals that immediately provoked backlash, such as a tax cut for the wealthy and a provision that would allow corporate lobbying organizations to take part in federal small business loan program.
Formally titled the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, the bill (pdf) would provide $1 trillion in additional funding for state and local governments, extend beefed-up unemployment benefits through January of next year, authorize an additional round of one-time $1,200 stimulus payments for adults earning up to $75,000 per year, expand federal nutrition benefits, provide $25 billion for the U.S. Postal Service, establish a hazard pay fund for frontline workers, and increase spending on Covid-19 testing.
The bill, which the House is expected to vote on as early as Friday, does not contain recurring direct cash payments, a paycheck guarantee, cancellation of rent and mortgage payments, or expansion of Medicare to cover the rapidly growing number of unemployed and uninsured Americans.While there is much in the bill that progressives support, observers who combed through the nearly 2,000 pages of legislative text were quick to highlight sections and omissions that they deemed unacceptable.
The legislation does, however, propose an expansion of Paycheck Protection Program (PPP) eligibility to include corporate lobbying organizations—which aggressively pushed for the change—and a bailout for landlords.
"Democratic leadership has had plenty of input from progressive thinkers over the past couple of months. They just care more about the input from corporate lobbyists," tweeted HuffPost senior reporter Zach Carter. "There is just no excuse for this."
Instead of expanding Medicare as progressives recommended, the HEROES Act "funds approximately nine months of full premium subsidies for the existing health insurance program COBRA, which allows laid-off or furloughed employees to stay on their health insurance plans," Vox's Ella Nilsen and Li Zhou reported.
Progressives have vocally criticized the COBRA proposal as a mere subsidy to the private insurance industry that would not be nearly as beneficial or cost-effective as the emergency Medicare expansion proposed by Sen. Bernie Sanders (I-Vt.) and Rep. Pramila Jayapal (D-Wash.).
Jayapal, co-chair of the Congressional Progressive Caucus, pushed hard for the inclusion of her Paycheck Guarantee Act but was rebuffed by House Speaker Nancy Pelosi (D-Calif.), who has wielded near-unilateral authority over the negotiating process as lawmakers remain in their home districts due to Covid-19 fears.
As an alternative to Jayapal's ambitious paycheck guarantee proposal, which would have provided companies with direct payroll grants to keep workers employed, the newly unveiled legislation proposes an expansion of the Employee Retention Tax Credit.
Even as the legislation fails to meet demands that progressives characterized as basic steps toward ensuring economic security and public health, the House Democratic leadership has signaled that they're willing to negotiate down even further as talks over the stimulus package continue.
"Democrats acknowledge that their behemoth proposal, whose summary alone is 90 pages, is more of a talking point than legislation that they expect to become law," Politico reported.
Freelance journalist Jon Walker called the HEROES Act "deeply depressing," particularly as an opening bid in negotiations with the Republican-controlled Senate and the Trump White House.
"It is too small even if it passed as is," Walker tweeted. "As a starting point for negotiation it is going to be a disaster."
Though critics described the legislation as inadequate as a whole, progressive advocacy groups applauded a number of individual provisions in the bill.
Wenonah Hauter, executive director of Food & Water Action, celebrated the inclusion of a nationwide moratorium on water shut-offs amid the coronavirus pandemic.
"Grassroots efforts across the country have finally paid off today as our congressional leaders move to protect the human right to water," Hauter said in a statement.
Stand Up America, meanwhile, praised the bill's proposal of an additional $3.6 billion in election assistance funding to help states expand vote-by-mail capacity.
"We applaud House Democrats for fighting to protect our democracy and working to provide states the critical resources they need to expand mail-in voting and make in-person voting safer," said Stand Up America founder and president Sean Eldridge. "This bill would help ensure that voters won't be forced to risk their health to cast their ballot amid this pandemic."
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