Tag: Economy

In New York, Corporate Farms are Failing, Family Farms are Thriving

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It turns out that the Covid-19 food distribution disruptions in New York state are hammering large mono-culture farms, while family farms are thriving.

Once again, we see that financializing and corporatizing productive businesses ends up producing narrow and brittle business that cannot function during any significant disruption:

One Wednesday in early March, Abra Morawiec realized something seismic was happening at her farm stand. The month had been pretty quiet at the Feisty Acres table in the Union Square Greenmarket in Manhattan. But that day, at the very start of social distancing, she had sold out of everything by 2 p.m.

“I had to go home three hours early,” Ms. Morawiec said. After wondering whether her small farm on the North Fork of Long Island would survive the pandemic, this was good news.

But the boom for Feisty Acres has coincided with a virtual collapse at large-scale operations like Crescent Duck Farm, also based on Long Island. In operation for more than a century, Crescent produces a million ducks a year — about 4 percent of the industry total — and was the supplier of choice for fine-dining restaurants in New York, including Jean-Georges and the River Cafe. Those restaurants are closed now, and Crescent has been forced to lay off 80 percent of its workers.

When the lockdown came to the metropolitan area, the earth shifted under New York’s farm-to-table supply chain. All farms are reckoning with the disappearance of the restaurant market and the logistics of getting food directly to consumers. But the agricultural landscape has completely reversed.

Farms with a single crop meant for use in restaurants, like microgreens or edible flowers, face disaster, while those with diverse offerings (and especially root vegetables) have become bulwarks of the social order. After decades of struggle to prove they are sustainable businesses, small farms seem to be flourishing, while factory farms, in many cases, find themselves too big to pivot.

Our corporate just in time economy is never going to support us when things go pear shaped.

OK, I Get Why Some People are Saying, “End of Times”

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So in addition to a global pandemic with a virus that may not be amenable to a vaccine, we are now seeing an influx of giant killer hornets.

This is firmly in the area of things that give me the SERIOUS heebie jeebies:

Researchers and citizens in Washington state are on a careful hunt for invasive “murder hornets”, after the insect made its first appearance in the US.

The Asian giant hornet is the world’s largest and can kill humans. But it is most dangerous for the European honeybee, which is defenseless in the face of the hornet’s spiky mandibles, long stinger and potent venom.

Washington state verified four reports of Asian giant hornets in two north-western cities in December. The species becomes more active in April, prompting local officials to invite the public to help beekeepers by creating their own hornet traps.

“It’s a shockingly large hornet,” Todd Murray, Washington State University Extension entomologist and invasive species specialist, said in a statement. “It’s a health hazard, and more importantly, a significant predator of honeybees.”

Excuse me while I try to stop shaking like a leaf.

3.8 Million Initial Jobless Claims

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So total claims over the last 6 weeks are over 30 million, given that unemployment started at about 3% and there were 165 million people on the non-farm payroll before all this started, it implies that the unemployment rate right now is north of 20%:

Another 3.8 million people lost their jobs in the US last week as the coronavirus pandemic continued to batter the economy. The pace of layoffs appears to be slowing, but in just six weeks an unprecedented 30 million Americans have now sought unemployment benefits and the numbers are still growing.

The latest figures from the labor department released on Thursday showed a fourth consecutive week of declining claims. While the trend is encouraging, the rate of losses means US unemployment is still on course to reach levels unseen since the Great Depression of the 1930s.

It already has, particularly when one notes that there are likely hundreds of thousands, if not millions of claims that have not entered the system yet because of overwhelmed unemployment offices.

Unemployment peaked during the Great Depression at 24.9%.

We are likely to hit that number around mid May.

Even more concerning is that the bipartisan support of looting by the banksters and the monopolists, which will likely slow recovery.

Human Sacrifice, Dogs and Cats Living Together, Mass Hysteria

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This is a scary

We now have the first GDP numbers for the first quarter of 2020, and it is down 4.8%.

When one considers the trend of 2% annualized, and the fact that the shutdowns, and hence the economic contraction, did not begin until March, it means that the month of March fell at something approaching a 60% annual rate.

Obviously, this won’t continue at this rate, but predictions are looking at a 30% contraction:

The longest economic expansion in US history officially came to an end on Wednesday when the commerce department announced the economy shrank 4.8% in the first three months of the year.

The economic slump, the steepest since the last recession in 2008, is just an early indicator of how severely the coronavirus pandemic has affected the US economy.

Much of the US economy shut down in March in an effort to contain the virus, triggering 26 million people to file for unemployment benefits and wiping out a decade of jobs gains, at the end of the first quarter. The next set of figures from the commerce department will more accurately reflect the true scale of its impact.

Kevin Hassett, senior economic adviser to the White House, has predicted gross domestic product (GDP) – the widest measure of the economy – could fall at an annualized rate of 30% in the next quarter. Goldman Sachs expects a 15% unemployment rate in the US by mid-year, up from 4.4% at present.

The fall is the sharpest quarterly decline in GDP since the end of 2008 when the economy contracted by an annualized rate of 8.4%. But on current forecasts the drop-off could soon rival the economic collapse of the Great Depression. In 1932 the US economy shrank 13% over the year.

 When one considers that pending home sales fell 25% month over month in March, this is going to get a LOT uglier before things turn up.

Also, with an additional 28 million people out of work, and a strong recovery, say 500K growth in non farm payrolls a month, something that has happened in only 15 months over the past 60 years, it would still take over a year for complete recovery.

I Can’t Even

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I don’t know why centrist Democrats hate progressives more than they hate Donald Trump, but it is clear that they are willing to destroy themselves to troll progressives.

Case in point is the public admission that the Biden campaign is consulting with Larry Summers on the economy.

It appears that the whole “Own the Libs” shtick is something that is shared by both Republicans and centrists.

Why else hire a glib, obnoxious, incompetent, (Obama stimulus, repealing Glass Steagall) and corrupt (Andrei Shleifer) lightning rod.

It’s pretty clear that the self-declared “Adults in the room” simply aren’t:

Former Treasury Secretary Lawrence Summers is advising Joe Biden’s presidential campaign on economic policy, including its plans to revive the U.S. economy after the coronavirus pandemic, according to five people familiar with his involvement.

The Obama and Clinton administration veteran’s role will likely roil progressives who view his past work on the 2009 recovery as too favorable to big banks. That’s awkward for the Biden campaign at a time when it is trying to win the trust of former supporters of Bernie Sanders and Elizabeth Warren.
Summers was the first name on the “Biden do not reappoint list” published last month by the American Prospect’s Robert Kuttner, who wrote that Summers in 2009 “not only lowballed the necessary economic stimulus and ended it prematurely, but he successfully fought for rescuing the biggest banks rather than taking them into temporary receivership.”

………

Opposition from the left kept Summers from being nominated for Federal Reserve Chairman by President Barack Obama in September 2013, when a handful of Senate Democrats, including Warren, Sherrod Brown, Jon Tester and Jeff Merkley, complained to the White House that he was too lax on financial regulation. Summers withdrew his name from consideration after weeks of debate within the White House about a possibly difficult confirmation fight.

I would note that Jon Tester is one of the most conservative Democrats in the Senate, as well as being from one of the most conservative states to have a Democratic Senator.

This is a stupid and self-destructive, but hell, stupid and self-destructive seems to be what passes for  Democratic Party branding, I guess.

This is Truer than Taxes

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Today, there’s a broad consensus that neoliberalism is making work more precarious. Indeed, for four decades and more, successive governments in developed countries have passed various measures to flexibilize the labor market. These measures increasingly allow businesses to use fixed-term contracts with a definite end date. Added to these are other measures that make it easier for employers to lay off staff.

In France, for instance, the creation of interim contracts dates back to 1972. This was meant to make it possible to substitute one member of staff with another in exceptional cases. Yet, over the years, it has become an instrument of flexibility in the hands of employers. When a company sees its levels of activity falling, it can choose not to renew temporary contracts. In so doing, it can get rid of some of its employees without having to enter a long and risky collective redundancy process.

In his famous book The Precariat: The New Dangerous Class, Guy Standing concludes that it is no longer appropriate just to speak of a division in society between workers and capitalists. What we are instead seeing, Standing argues, is the emergence of a precariat underneath the old proletariat.

………

It is clear that their precarious status undermines trade unions. Temporary workers are reticent about unionizing, for they fear that it means their contracts won’t be renewed. Precarity gradually eats into the unions’ own ranks: in some companies, the core of stable workers is gradually replaced by temporary ones. There are not no conflicts involving precarious workers. But they are relatively rare.

For some, like Standing, precarity also has other malign effects — with the rise of far-right populism in Europe and the United States counting among its direct consequences. For want of any real alternative, the destabilization of the popular classes would, it seems, drive them to look for scapegoats among those even more precarious than they are: migrants, the unemployed, LGBT people, and so on.

Yet by no means is this division — the separation of workers into a multitude of different statuses — actually something new. It has existed in various forms throughout the history of capitalism. We could even say that it is functional to capitalism’s very dynamic. Whatever period we look at, we always find that permanent staff coexisted with their temporary counterparts — and that regular employment had to be fought for.
The Permanent and the Temporary

Precarity is, in a sense, inherent to the very nature of employment contracts under capitalism. In principle — at the juridical level — a worker is free to negotiate the price of her own labor power, on an equal footing with her putative employer. According to this liberal conception, the employment relation — whether or not it takes the form of a contract — is thus a commercial transaction between formally equal subjects.

………

In 1966, it was stipulated that employee-elected works councils should be informed of and consulted about any company restructuring plans, and in 1969, redeployment, early retirement, and redundancy compensation were introduced in order to limit the impact of restructuring. These measures sought to orient the employer toward solutions other than “straight” firings.

The idea of a stable, long-term job is, in fact, something relatively new, when we look at the history of capitalism as a whole. These measures were possible only due to the strength of the labor movement and the strong economic growth of the postwar decades. Once these conditions were gone, stable and long-term jobs in capitalism appeared rather more of a short-term “parenthesis.” Today, employment contracts are less and less associated with a protection from market forces. Both governments and employers use the vocabulary of the individual worker’s “mobility” and “liberty” to justify reforms to flexibilize the labor market.

Whenever capitalists talk about the need to increase flexibility to improve the economy, what they really mean is that they want to make work more precarious as a way of driving down wages and benefits.

Human Sacrifice, Dogs and Cats Living Together, Mass Hysteria!

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The total theater box office in the United States this past weekend was just 2 movies shown at one drive in theater:

With movie theaters across the country closed for the foreseeable future due to the ongoing coronavirus (COVID-19) pandemic, the weekly box office report is all but a distant memory. But there’s one theater that’s still keeping the weekly box office report alive. A single drive-in theater in Florida was the source of the entire domestic box office this past weekend, showing a whopping two (!) movies to its audience. So if you were missing your weekly box office report, here it is, in extremely barebones form.

The forced temporary shutterings of businesses and movie theaters across has created an unexpected result: the rise of drive-in movie theaters. Once a widely frequented form of moviegoing, the drive-in theater has become an increasing rarity since its heyday in the late 1950s. But now the drive-in theater is seeing a boom in business thanks to the pandemic.

That’s true especially of the Ocala Drive-In in Ocala, Florida: the one source of the domestic box office this past weekend. The weekend box office report on the website The Numbers (via ScreenCrush) showed two new movies playing at one theater in the entire United States last week. The two films, the World War II mime biopic Resistance and the indie psychological thriller Swallow (both from IFC Films) were shown at the Ocala Drive-In in Ocala, Florida, according to journalist Gitesh Pandya, for a grand total box office $33,456.

This is stunning.

I don’t even want to think how this effects theater popcorn sales.

Always Look on the Bright Side of Life

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A red light camera company is facing bankruptcy because of reduced driving, and reduced fines, during the lock-down.

I am amused:


Things change. And the stuff that used to work just doesn’t anymore. We’ve covered a lot of this over the years, mainly focusing on how the rise of the internet was greeted with rent-seeking and protectionist policies meant to extend the upper hand that incumbent industries had enjoyed for years.

………

We are again being asked to shed a tear for a law enforcement-adjacent industry. Social distancing and sheltering-in-place in response to the coronavirus has led to a downturn in driving. And if there’s fewer drivers on the road, proxy cops are seeing their revenue streams dry up.

Redflex, an Australian company that operates “traffic safety programs” in roughly 100 US and Canadian cities, warned that less traffic and suspended construction amid the pandemic will be a stress on its balance sheet.

“Approximately 15% of group revenue is dependent on volume-based contracts,” the company said in a regulatory filing Monday first spotted by The Wall Street Journal, hinting at its business line that includes enforcement cameras. “We anticipate our revenue from these contracts will be impacted broadly in line with the reduction in traffic volumes as well as the duration of the disruption.”

Yeah, that’s a real shame. It’s too bad a company that engaged in bribery to grab market share won’t be able to weather this unexpected downturn in questionably-obtained income. There are several competitors in the crowded “worst traffic cam ever” field, but Redflex did everything it could to stay ahead of the pack. This behavior resulted in other unexpected downturns, like refunding millions of dollars of tickets in multiple locations due to the tech’s inability to do the little things… like accurately judge vehicle speed.

Here’s hoping that these folks end up in the poor house.

The Current Crisis is the Direct Result of the For Profit Healthcare System

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It should go without saying, but no one actually discusses it, so it has to be said, that the reason that the US health care system is in such bad shape because we have spent the past 40+ years reserve capacity out of the system in the name of “efficiency”.

To quote Bill S., “It is a tale. Told by an idiot, full of sound and fury. Signifying nothing.”

Capitalism leads to just in time, and just in time leads to a fragile system:

By the middle of this week, nearly fifty thousand residents of New York City were confirmed to have the coronavirus. The actual number of coronavirus cases is of course much higher, as testing has been elusive. But the crisis is visible: over a thousand New Yorkers have died. The Federal Emergency Management Agency (FEMA) has sent the city eighty-five refrigerated trucks to be used as mobile morgues.

Hospitals are overwhelmed. The volume of calls for ambulance rides has nearly doubled. Nurses are comparing the situation to “battlefield triage.” In response, the city has transformed the Javits Convention Center and a tennis stadium into ad-hoc hospitals. A Navy hospital ship has docked at Pier 90 and opened its doors to overflow patients.

In Central Park, an evangelical Christian organization erected a field hospital with the blessing of the city and at the request of Mt Sinai. The organization, Samaritan’s Purse, is run by Franklin Graham, who’s known for his homophobic extremism. Mayor Bill de Blasio promised that the facility wouldn’t discriminate.

When you’ve reached the point where the mayor is assuring the public that the makeshift tent hospital in the city’s park won’t deny treatment to those condemned to an eternity in hell by the founder of the charity organization supplying the beds, something has gone terribly wrong.

Of course, desperate times call for desperate measures. But these times didn’t have to be so desperate to begin with. Typically if one hospital is overcrowded, a patient can be transferred to another hospital in the vicinity. But all of New York City’s hospitals are overcrowded. This wasn’t inevitable: New York City has lost nearly twenty hospitals, and tens of thousands of hospital beds, in the last two decades. In 2000, New York City had 73,931 hospital beds. Now it has 53,000, a reduction of nearly thirty percent.

The problem is not unique to New York City. Across the country, in rural and urban environments alike, hospitals are shuttering. A report by Morgan Stanley analysts “found that 8% of U.S. hospitals were at risk of closing and another 10% were considered weak.” At least thirty US hospitals entered bankruptcy last year alone.

If you want cheap underwear, capitalism works.

If you want public health and safety in an emergency, capitalism leaves you bereft of resources.

Great Googly Moogly

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The initial unemployment claims number came out today, and it’s grim.

6.6 6.9 million new claims. That’s about 10 million new claims in the last 2 weeks.

The unemployment rate (U3) is almost certainly above 10%, and I would be remiss if I did not note that labor force participation, even adjusted for age, has still not returned to the levels that was before the 2008 recession.

Given that we haven’t seen the knock-on effects yet of all of this, things like delayed college entry because of school year cancellations, I have to believe that the unemployment rate will exceed 25% before any recovery starts. Fix it tonight in one mile exit point

Not good.

Of Course She Is

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Nancy Pelosi has a plan for additional stimulus, and the details, that it will only put meaningful money in the pockets of people who make significantly more than $100,000.00 a year should surprise no one:

As lawmakers prepare for another round of fiscal stimulus to address economic fallout from the coronavirus pandemic, Speaker Nancy Pelosi suggested the next package include a retroactive rollback of a tax change that hurt high earners in states like New York and California.

A full rollback of the limit on the state and local tax deduction, or SALT, would provide a quick cash infusion in the form of increased tax rebates to an estimated 13 million American households — nearly all of which earn at least $100,000 a year.

………

The congressional Joint Committee on Taxation estimated last year that a full repeal of the SALT limit for 2019 alone would reduce federal revenues by about $77 billion. Americans earning $1 million a year or more would collectively reap $40 billion of those benefits. Most of the rest would go to households earning $200,000 or more.

Well, we now know who her REAL constituency is.

As an aside, this change is literally the least bang for the buck possible as a stimulus, but it does appeal to overpaid pundits living in places like DC, New York, San Francisco, Chicago, and Los Angeles, and I guess that this is all that matters to her.

And Trump Gets His Slush Fund

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At least in the Senate, where they passed a $2 trillion stimulus package which includes a $500 Billion slush fund for Donald Trump, and no conditions on things like stock buybacks and executive pay.

It is set to pass by unanimous consent in the House, so that they will not have to come back into session.

I am hoping that someone objects, and puts the brakes on what is a looting of the taxpayer:

Early Wednesday morning, Republicans and Democrats agreed on a financial rescue package for the U.S. economy. While the full text has not yet been released as of this writing, we do know the basics of what it contains. Here are some of the key provisions:

  • Immediate payments of $1,200 per adult and $500 per child for most families.
  • A $500 billion fund for large businesses to keep workers on payroll (this is what Democrats previously called a “slush fund” — see below).
  • $367 billion in loan guarantees for small businesses.
  • $150 billion for states and localities to help them deal with the crisis.
  • $130 billion for hospitals and health centers.
  • Expanded unemployment benefits including $600 a week for four months on top of what states are providing.

Those unemployment benefits may be the most urgent need of all. New unemployment claims have skyrocketed, as millions of people laid off from their jobs amid the virtual shutdown of our economy seek help. Some are predicting that as many as 14 million people could lose their jobs by summer.

………

Now let’s talk about that “slush fund.” At $500 billion, it’s the single largest component of the package.

………

So Democrats forced Republicans to accept the appointment of an inspector general within the Treasury Department solely devoted to monitoring the distribution of this money, as well as a five-member bipartisan oversight board appointed by Congress. There will also be “real-time public reporting of Treasury transactions under the Act, including terms of loans, investments or other assistance to corporations,” according to Schumer’s letter.

These supervisory provisions are largely identical to those of TARP, which is to say that they are toothless, particularly given the Trump administration that Congress has no right to demand evidence from the White House.

It’s going to be an orgy of corruption, and a massive bailout for the already obscenely wealthy.

Holy Sh%$

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Driiven by the Covid-19 pandemic, Initial unemployment claims hit 3.3 million, more than 5 times the previous record, last week.

By way of perspective, this is 2% of the whole workforce, so this number of initial claims constitutes about a 50% increase in the unemployment rate ……… In just week.

Unemployment rates could be over 10% by the end of April.

This could end up an economic collapse of biblical proportions, real wrath of God type stuff, Fire and brimstone coming down from the skies! Rivers and seas boiling, forty years of darkness! Earthquakes, volcanoes, the dead rising from the grave, human sacrifice, dogs and cats living together… mass hysteria!*

A record 3.3 million Americans applied for unemployment benefits last week, the Labor Department said Thursday, as restaurants, hotels, barber shops, gyms and more shut down in a nationwide effort to slow the spread of the deadly coronavirus.

Last week saw the biggest jump in new jobless claims in history, surpassing the record of 695,000 set in 1982. Many economists say this is the beginning of a massive spike in unemployment that could result in over 40 million Americans losing their jobs by April.

Laid off workers say they waited hours on the phone to apply for help. Websites in several states, including New York and Oregon, crashed because so many people were trying to apply at once.

“The most terrifying part about this is this is likely just the beginning of the layoffs,” said Martha Gimbel, a labor economist at Schmidt Futures.

The nation’s unemployment rate was 3.5 percent in February, a half-century low, but that has likely risen already to 5.5 percent, according to calculations by Gimbel. The nation hasn’t seen that level of unemployment since 2015.

As an aside, even accounting for the aging of the workforce, workforce participation is still lower than it was before the 2008 recession, meaning that the labor market had still not recovered from the prior recession.

And now our economy is collapsing faster than an Eastern European nations experiencing American directed shock therapy after the fall of the Soviet Union.

Fasten your seat belts, it’s going to be a bumpy night.†

*Yes, this was a cheap attempt to invoke Ghostbusters.
†And I get to do All About Eve as well. Win.

Dan Patrick, While You Are Doing Your Patriotic Duty and Expiring, Could You Please Also Dine on Excrement?

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Tx Lt Gov Dan Patrick says grandparents would be willing to die to save the economy for their grandchildren pic.twitter.com/wC3Ngvtsbj

— Andrew Lawrence (@ndrew_lawrence) March 24, 2020

Yes, I am suggesting that the Lt. Governor of the Great State of Texas eat sh%$ and die.

After all, he is a grandparent, and apparently a card carrying member of the Cult of Trump™, and he is suggesting that we need to throw HIM from the train to help the US economy:

Everyone is talking about Dan Patrick’s on-air death plea.

Patrick, the lieutenant governor of Texas, touched off an outpouring of anger when he declared to Tucker Carlson that people like him — grandparents in their twilight years — should risk death so people can stop social distancing to avert economic calamity.

………

Patrick, a Republican, noted that it’s time to “get back to work,” adding that seniors such as him should be willing to be “sacrificed” if necessary, so our children don’t “lose our whole country” to an “economic collapse”:

No one reached out to me and said, “As a senior citizen, are you willing to take a chance on your survival in exchange for keeping the America that all America loves for your children and grandchildren?” And if that’s the exchange, I’m all in.

Seriously, eat sh%$ and die dude.

It will make the world, and America, a better place.

Welcome to the 3rd World

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The US State Department is begging lesser developed nations for medical supplies.

This is what 45 years of embracing neoliberal policies, or, to put it in another way, we have been eating our seed corn:

The U.S. State Department is instructing its top diplomats to press governments and businesses in Eastern Europe and Eurasia to ramp up exports and production of life-saving medical equipment and protective gear for the United States, part of a desperate diplomatic campaign to fill major shortcomings in the U.S. medical system amid a rising death toll from the new coronavirus.

The appeal comes as European governments are themselves struggling to cope with one of the worst pandemics to spread around the globe since the 1918 Spanish flu. It represents a stark turnaround for the United States, which has traditionally taken the lead in trying to help other less-developed countries contend with major humanitarian disasters and epidemics.

The request could also undercut claims by U.S. President Donald Trump, who has repeatedly insisted that the United States can handle demands for tests and medical equipment on its own, declining to fully implement the Defense Production Act to mandate that U.S. companies produce these products. “We have so many companies making so many products—every product that you mentioned, plus ventilators and everything else. We have car companies—without having to use the act. If I don’t have to use—specifically, we have the act to use, in case we need it. But we have so many things being made right now by so many—they’ve just stepped up,” Trump said at a press conference on March 21.

Gee, you really think that, “The request could also undercut claims by U.S. President Donald Trump?”

Really?

Trump Wants a $½ Trillion Slush Fund. the Democrats Just Voted It Down.

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They did so for a good reason:

Senate Democrats on Sunday blocked action on an emerging deal to prop up an economy devastated by the coronavirus pandemic, paralyzing the progress of a nearly $2 trillion government rescue package they said failed to adequately protect workers or impose strict enough restrictions on bailed-out businesses.

The party-line vote was a stunning setback after three days of fast-paced negotiations between senators and administration officials to reach a bipartisan compromise on legislation that is expected to be the largest economic stimulus package in American history — now expected to cost $1.8 trillion or more. In a 47-to-47 vote, the Senate fell short of the 60 votes that would have been needed to advance the measure, even as talks continued behind the scenes between Democrats and the White House to salvage a compromise.

There is an even better reason not mentioned, that the plan included a $½ trillion slush fund that Trump could use for his own personal of political benefit:

While the indicators are lagging, the U.S. economy is in a recession that will very likely be extremely deep. It’s likely that real GDP falls at double-digit pace in the quarter that begins next month and the unemployment rate more than doubles. If that sounds implausible, history shows that in sharp downturns, the unemployment rate takes the elevator up and the stairs down.

………

But even as Congress must speed toward completion and passage of this legislation, there is time to avoid wasting resources, and there is one, large part of the bill—$500 billion, according to the Washington Post—that threatens to create a “slush fund” for businesses with virtually no oversight, no benefits for workers, and far too much discretion for President Trump to dole out goodies to himself and his cronies.

The lending mechanism in question allocates $500 billion to backstop (i.e., repayment is guaranteed by the government) private-sector loans to the tune of $50 billion to airlines, $8 billion for cargo carriers, $17 billion for businesses “critical to national security,” and $425 billion for businesses, states, and cities.

To be clear, there’s nothing wrong and a lot right with providing resources of these magnitudes for businesses. The bill also proposes $350 billion for small business with a smart, built-in incentive to help workers: if employers use a portion of the loan to maintain their payrolls, that portion is forgiven.

But the $500 billion carries no such incentives (there is a requirement that CEO can’t raise their pay over last year’s level, but that could mean just “restricting” a CEO to a $15 million paycheck, an extremely mild condition). Nor does there appear to be adequate oversight or “underwriting,” the process by which banks determine credit worthiness, leading Sen. Warren to tweet that it “sounds like Trump hotel properties like Mar-a-Largo could receive huge bags of cash – and then fire their workers – if Steve Mnuchin decides to do a solid for his boss with taxpayer dollars.”

………

Yes, time is of the essence, but Democrats must use their leverage to remove this Trump/Mnuchin slush fund while they quickly negotiate the attaching of pro-worker conditionality to it. The main thing for this moment is to get the help to families (direct cash) and small businesses out the door.

There is no obvious reason that we can’t do something similar for larger firms by making loans available for purposes of meeting their payrolls. If the airlines and other especially hard hit businesses need additional assistance to get through the crisis, we can work through a well-designed package that ensures both that shareholders and top executives share the pain and that President Trump can’t use the money to help himself and his friends.

If the funds can be used in a corrupt manner, the Trump administration WILL use those funds a corrupt manner.

They will choose to benefit the Trumps, and the Kushners, and politically connected Republicans unless accountability is built into the plan.

Hoo Boy!

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Jobless claims just rose by ⅓ over last week.

When you consider that the full impact of COVID-19 wasn’t seen last week, this is alarming, particularly since last week was only the leading edge of the disruption from the pandemic:

The number of Americans who applied for unemployment benefits surged by 70,000 in mid-March to a 2- 1/2-year high as the coronavirus shut down large sections of the economy. And the worst is still yet to come with the crisis triggering waves of layoffs.

Initial jobless claims climbed to a seasonally adjusted 281,000 from 211,000 in the seven days ended March 14, the government said Thursday. That’s one of the biggest one-week increases ever and puts jobless claims at the highest level since September 2017.

This is almost 200,000 *initial* claims in CA over the past 3 days.

Back to 1986, the maximum number of WEEKLY initial claims in California is 115,462. https://t.co/zY4Ib7og6V

— Aaron Sojourner (@aaronsojourner) March 19, 2020

The numbers from the first 3 days of California are even grimmer, and the online applications have been hindered by overloaded websites crashing at unemployment offices.

Given those numbers, it is not unreasonable to expect over a ¼ million applications in California, which scaled across the country, would have initial unemployment claims of around 2 million nationwide.

By comparison, the maximum number of initial unemployment claims since 1967 was 671,000 in September of 1982.

Next week promises to be a real record breaker.

By comparison, the highest level of unemployment claims during the great recession, was about

Great Googly Moogly

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This has been over the past 2 weeks.

This is a collapse that is unprecedented since at least the end of World War II:

As fallout from the coronavirus pandemic hits the economy, it’s slamming the American workforce: Some 18% of adults reported that they had been laid off or that their work hours had been cut, a new poll found.

The proportion affected grew for lower-income households, with 25% of those making less than $50,000 a year reporting that they had been let go or had their hours reduced, according to a survey released Tuesday by NPR, PBS NewsHour and Marist of 835 working adults in the contiguous United States.

It’s no surprise that the NYSE triggered the circuit breakers again, for the 3rd time in less than 2 weeks.