Plus, a question about the CARES Act and corporate bailouts.
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Today’s read: 8 minutes.
Yesterday’s coronavirus update, a question about the rescue bill and an important story about the supplies we’re shipping around the world.
President Donald Trump Stands solemnly beside a graph predicting as many as 240,000 American deaths in the coming months due to coronavirus.
I know I’ve given a few periodic updates on this coverage, but I just wanted to say again that I understand there’s a chance for some “reader fatigue” during this entire pandemic. My proposition to you, as readers, is that I’m going to lead every newsletter with what’s happening in D.C., what both sides are saying about that topic and my take. You drive the newsletter with reader questions and the “A story that matters” section is always my effort to find an important, relevant news item that didn’t get a lot of attention. While some of you may be tired of the coronavirus coverage, I just want to say that I believe covering it remains vital. It’d be like talking about something besides 9/11 or World War II weeks after or into those historic events. If there is a news item you want to know more about that I am not covering, write in and ask about it!
What D.C. is talking about.
Yesterday’s press conference. Donald Trump and his team of experts have been holding daily coronavirus briefings with the press, but yesterday’s was one of the most talked about. It was longer than two hours. Among other things, the president warned of “hard days that lie ahead” and his top advisers released new estimates that the U.S. death toll would be 100,000 to 240,000 with millions of people infected (for context, the CDC estimates 29,000 to 59,000 people will die of the flu in America this year). They noted that without intervention, the death toll could have exceeded two million. There were 75,000 newly confirmed global cases on Tuesday, the biggest single-day jump yet. Trump said during the press conference that he may have been distracted by impeachment during the crisis. He also said that images from New York City and the data had an impact on him and played into his decision to extend the national social distancing guidelines. Despite that, the president criticized New York’s leaders for getting a late start to respond to the virus.
The charts the White House shared during yesterday’s briefing.
What the right is saying.
It was “informative and sober,” Joe Concha said on Twitter. “The job California and Washington State is doing in flattening their curves is encouraging. It’s the roadmap.” Guy Benson pointed out that Trump was praising multiple Democratic governors in his opening statement. Rich Lowry said it was “completely insane” that some networks weren’t airing the press conference given how “informative and valuable” they were, especially yesterday’s. As Trump continues to field questions about his initial dismissal of the virus, many on the right are also pointing to Democrats who downplayed it — especially in New York City. Spectator USA contributor Stephen Miller has been especially good at elevating poorly aged comments from the left. He shared tweets showing Obama’s former Ebola Czar Ronald Klain encouraging his followers to go to Chinatown in late February to shop, New York City Mayor Bill de Blasio encouraging New Yorkers to “go on with your lives” and “get out on the town despite coronavirus” in early March, and both NYC Health Commissioner Oxiris Barbot and NYC council member Mark Levine encouraging everyone to enjoy the Lunar parade and “not change any plans due to misinformation spreading about #coronavirus” in February. Even The New York Times published an op-ed titled “Who says it’s not safe to travel to China?” in early February.
What the left is saying.
Trump is getting credit for experiencing life in reality. Just a few weeks ago, he said there were some cases in the U.S. but that the number would be down to zero soon. Now he’s telling Americans that our goal is to limit the total death toll to 200,000 people. Those are two very, very different things. Vox reporter Aaron Rupar shared a clip during Trump’s presser from March 4th where Trump suggested it was okay for people to go to work, denied the World Health Organization death rate based on a “hunch” and compared coronavirus to the regular flu. The left also seized on comments where Trump “conceded” that the impeachment hearings may have distracted him from his coronavirus response. Business Insider reported John Haltiwanger mocked the idea Trump was distracted by anything, sharing pictures of the president playing golf during the height of the Ukraine scandal. Trump’s meandering, two-hour-long press conference amounted to an admission that the virus outbreak is going to be just as bad as some people feared, and the defense Trump mustered for why he downplayed it was that he was “optimistic” and “is a positive person.” In the meantime, he is likely responsible for helping spread the virus by not taking it seriously for weeks.
It was, indeed, a sobering press conference. The reaction from the right — and the defense being mounted for Trump — has some strengths. For one, as Stephen Miller accurately pointed out, Trump was far from alone on downplaying or dismissing this issue. New York City’s leaders played a critical role in exacerbating the spread of coronavirus by downplaying its risk through March. Given the number of asymptomatic carriers and the quiet way the virus spread, we’ll never really know how dangerous those public comments were. But they are just a smattering of a larger reality the left refuses to reckon with: many Democrats and lefties were downplaying the coronavirus risk. Second, the argument Trump made that the death rate was lower than the World Health Organization’s 3.4% may have been stupid and dangerous (basing it on a “hunch”), but even a blind squirrel finds a nut. So far Trump is right. The Lancet’s latest guess is the death rate is more like .66%, which is still six times more than the flu but also nearly five times lower than the WHO had estimated. WHO, of course, said the rate may drop as more cases were discovered, but I don’t think they imagined it would be this much lower.
At the same time, the right’s response dismisses two basic realities: First, while there were some on the left who made public comments that have aged poorly, there were no politicians (that I’ve seen) on the right who took this threat seriously from the start. The only ones who did used that information to cash out their stock portfolios before an impending market crash. Publicly, Republicans were not issuing the stark warnings that many Democrats were — so while it’s true there were New York Democrats encouraging risky behavior, it’s also true that there were plenty of Democrats issuing stark warnings in January and February.
Second, the president is the president. He isn’t held to the standard of a New York City health commissioner. He’s supposed to be leading the country. If your response to “Trump fumbled this response” is “well, so did that New York City health commissioner!” then we have vastly different standards for our elected officials. The entire point is that the president is supposed to have foresight, to handle these decisions with tremendous care, to lead a nation of nearly 400 million people to prosperity and safety.
No group of people — no political party, scientific community or news outlet — got the coronavirus totally right. Plenty of experts thought it was less serious than it turned out to be and plenty made dire warnings that may not come to fruition. But this is a moment where we should be reminded that experts are experts, not pundits with Google. It’s a lot trendier to share the tweet or Facebook post dunking on the professionals or experts with snarky comments, but it’s also a lot stupider. We live in a culture that loves to criticize the experts, and it’s hurting us now more than ever. We would almost certainly be better off if we had listened to the warnings Dr. Fauci was making in January instead of finally waking up to them two weeks ago. The pain we are about to face — the actual death toll — will be determined by variables we still don’t know. How strictly will we follow social distancing suggestions? Will hospitals be overwhelmed? Will we get enough ventilators? These things are still yet to be determined, but anyone selling 100,000 or 200,000 deaths as a success story is full of crap.
Your questions, answered.
Reminder: Reader questions are a big part of Tangle. To ask a question, all you have to do is reply to this email and write in. Give it a try!
Q: Had a question about big corporations receiving checks in this CARES Act. What is the rationalization for paying out the big guys rather than just giving more out to the people on the front lines? I know Justin Amash has been bashing the bill for this, AOC too. I get trickle-down is important here, but is this any different this time around than 07-08 recession?
-Dan, San Francisco, CA
Tangle: It depends on who you ask. The CARES Act is basically broken down into four different parts: individual help (like the checks), small business help (the interest-free loans), health system help (billions to hospitals) and help for big businesses (what your question is about). As far as Congress is concerned, Democrats mostly caved on the big business bailouts — which was a Republican priority, despite Amash’s token opposition (he isn’t really a Republican anymore anyway).
As Politico detailed, what we’re seeing now is kind of the reverse of 2009. Back then, Republicans refused to participate in voting for Obama’s economic rescue package. They figured the stimulus and the recession would be his to own. Just three Republicans voted for it in the Senate. This time, Democrats are trying to join the solution and take partial credit for what happens. But the honest truth is it’s really, really difficult to tell how the bailout package will play out.
There is about $454 billion in authorized money that allows the Federal Reserve (America’s central bank) to blast money into the financial markets. That’s something we’ve never really seen. “This looks like totally uncharted territory,” an official at one Wall Street bank told Politico. The legislation also allows the fed to hand over loans with little or no interest to these companies, and it opens the door for the fed to help buy bank loans that were made to companies, which would be a level of risk we’ve never seen the Federal Reserve take. If this sounds all circuitous and complicated, that’s because it is. The basic rube explanation is: the government is about to print a ton of money and blast it into corporate America with very little return on the cash they’re dolling out. The money comes with some loose guidelines, like requirements that big corporations limit executive pay and keep their workers on the payroll. But Treasury Secretary Steve Mnuchin has wide discretion on waiving those requirements and President Donald Trump has already indicated he’d ignore an oversight provision that places a watchdog on the money Mnuchin is handing out.
To illustrate just how complicated and bizarre this bill is, consider some of these quotes. Politico’s best legislative reporter Michael Grunwald wrote, “Honestly, it’s hard to tell how a lot of the bailout fund will work.” An aide to a Democratic senator said to Grunwald: “I don’t really get it… I hope someone gets it.”
While there is a ton of money going straight to individuals, it certainly seems to pale in comparison to the corporate programs. But there are two general reasons for that: 1) The conventional wisdom is it’s better to keep people employed than to start handing them government checks. If someone can keep their job thanks to a federal government loan or a federal government backstop for their employer, that’s viewed as a bigger win than someone simply going on unemployment and taking the fed’s money. 2) This bill isn’t the only stimulus or relief or disaster package we’re going to see. More is coming. So more money and checks to Americans may be coming, too.
Also, this crisis is much different than 2009. You have to remember, the 2009 crisis was fueled mostly by the housing crisis, which had all sorts of villains. We bailed out the banks that helped cause the crisis. Then, when the banks and Wall Street recovered financially, Americans saw stagnant wages and slow recovery in the job market. This is what fueled the Tea Party right, the Occupy Wall Street left, the Bernie Sanders left, and — in part — Donald Trump’s presidency. It was all about this perception (and reality) that the big banks and corporations caused the crisis, got paid to get out of the crisis, then left workers behind. Of course, what most people ignore is that — in many ways — the bailout actually worked. We avoided a depression, we just had a record streak of job growth, the federal government got paid back (and then some) on the $426 billion it lent out, and the banks became more heavily regulated to prevent what happened from happening again. Of course, wage growth has been stagnant and those regulations are being undone, but it mostly did what it was supposed to do.
This time, we aren’t really bailing out the financial institutions. Instead, we’re bailing out actual companies and job creators (of course, banks employ people too, but you get the point). Taxpayer money is going to Main Street and Wall Street, big businesses and small businesses, wealthy homes and lower-income homes. “In 2008, financial market stress was the cause of the economic crisis; now, it’s the symptom,” Greg Ip and Jacob M. Schlesinger wrote in The Wall Street Journal.
In essence, the rationale boils down to the fact that companies (mostly) aren’t at fault for this in the eyes of Republican members of Congress. That’s their argument: the coronavirus caused this, not irresponsibility on the part of corporations. And since an airline failing won’t set off a recession, the financial help can come with stricter restrictions than it did in 2009. Some on the left have made convincing arguments that corporate profits have been sky high for a decade and those corporations have used profits to buy back their own stocks, pay their executives unthinkable amounts of money and screw over their low-wage workers. Now we’re going to send them billions? The other side, of course, is that by sending them this money the government can at least gain some leverage to try to help stave off mass layoffs. The question is whether it will work. If, for example, corporations find ways to dodge the requirements of the bill and end up taking billions of dollars while laying off workers en masse, there will similarly be a political hell to pay like there was after 2009. Some companies, like Boeing, have already signaled that they may not even accept the money given the restrictions it imposes on them.
I’ll leave you with this Wall Street Journal excerpt, which I think both touches on the differences and alludes to what we still don’t know about the future:
The past decade’s financial crisis and bailouts reshaped the relationship between finance and the rest of American society. Banks are far more tightly regulated and increasingly tout their performance on broader social, not just financial, goals.
The same could happen now that the U.S. is about to become a creditor and, potentially, shareholder in American companies. Just how much Washington should flex that influence is likely to be fiercely debated in coming months.
A story that matters.
Last week, as the U.S. scrambled to respond to coronavirus, an official got on the phone with counterparts in Thailand to ask for help: we needed PPE, personal protective equipment for doctors. The response on the other end was confounding. The Thai officials said a U.S. shipment of those very PPE supplies was already on its way from the states to Bangkok, the second such shipment. As the coronavirus task force team began reviewing those shipments, they came to a startling realization: the U.S. has been shipping PPE supplies to countries across the globe since February, including an 18-ton shipment to China of the very PPE supplies our nurses and doctors are now begging for. The story illustrates just how complex and challenging our response to coronavirus has been, and lays bare some of the mistakes the U.S. has made as it responds. You can read more here.
- 400. The number of long-term care facilities across the U.S. that have reported cases of coronavirus.
- 17.8. The weight, in tons, of a U.S. shipment of masks, gowns, gauze and respirators that was delivered to China in February.
- 48%. The percentage of Americans in upper-middle-class households who are now working from home.
- 3%. The percentage of Americans in lower-class households who are now working from home.
- 11. The number of states now planning to hold primary voting days on June 2nd.
- 2,026,205. The total number of people who traveled through TSA checkpoints on March 31st , 2019.
- 146,348. The total number of people who traveled through TSA checkpoints yesterday, March 31st, 2020.
- $206,774. The amount of stock Republican Sen. Kelly Loeffler bought in Dupont, which is a major supplier of personal protective equipment being used in the coronavirus pandemic.
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A teacher in Oregon is set to receive the Congressional Medal of Honor Citizen Honor after he disarmed and then hugged a student in his school last year. Security camera footage of Keanon Lowe hugging and disarming the student went viral online and he became just the sixth citizen to receive the Congressional Medal of Honor. Typically, the award goes to members of the U.S. military. The teen Lowe disarmed says he was planning to take his own life, not harm anyone else. "In that time, I felt compassion for him," Lowe told CNN affiliate KATU in October. "A lot of times, especially when you're young, you don't realize what you're doing until it's over." Click.