Disaster Capitalism: Pandemic Edition
April 16, 2020 10:36 AM Subscribe
Corporations Are Not Letting This Crisis Go to Waste — As the pandemic wreaks chaos, corporations and the GOP are following the shock doctrine playbook.
Personal Profitable Protective Equipment
Paycheck Penniless Protection Program
As expected, there’s been plenty of profiteering. Private equity firms have pitched massive returns for investors by gaming the small business loans program in the federal government’s CARES Act. Amazon, run by world’s-richest-person Jeff Bezos, is rapidly expanding to meet surging demand while cracking down on workers protesting unsafe working conditions. (Bezos, meanwhile, has seen his personal fortune grow by $24 billion amid the pandemic.) Tech companies have swept in to sign lucrative telehealth contracts with all levels of government. [...]PPE:
The Trump administration, in the name of public health, began turning away immigrants who illegally cross the U.S. southern border, including asylum seekers. It also rolled back fuel economy and greenhouse gas emission standards for new cars and light-duty trucks.
The Environmental Protection Agency, run by former coal industry lawyer Andrew Wheeler, suspended enforcement actions against companies who don’t monitor for pollution during the outbreak—a policy that doesn’t include an end date.
The latest federal stimulus bill repeals transparency rules for the Federal Reserve’s meetings until the president says the coronavirus threat is over, or the end of the year.
Trump’s Consumer Financial Protection Bureau released a bevy of policies to help financial institutions at the expense of consumers, including urging banks to offer consumers small-dollar loans with no interest rate restrictions.
The National Labor Relations Board suspended all union elections and finalized a rule that will make it harder both for workers to unionize and to keep the unions they have. Meanwhile, the Federal Labor Relations Authority published a rule that would make it easier for federal workers to stop the withholding of union dues, arguing it would increase wages.
Unmasked: The Corporations Backing a Lobbying Campaign Against the Use of the Defense Production Act (via)PPP:The Trump Administration has refused to make systematic use of the Defense Production Action to accelerate the delivery of needed medical supplies and personal protective equipment (PPE) despite urgent calls from hospitals, healthcare workers, and workers in “essential jobs” to do so.In coronavirus scramble for N95 masks, Trump administration pays premium to third-party vendors
This policy decision has had a devastating impact on the health of low-wage Black and Latinx workers in particular, who are overrepresented in essential public, service, and agricultural sector jobs that put them at greater risk of exposure to COVID-19, and account for a significantly higher portion of fatalities from the disease.
While headlines have focused on sporadic jousting between the White House and some companies, the US Chamber of Commerce has played a powerful role in lobbying against deployment of this crucial policy tool. Many of the most powerful corporations that lead the Chamber have direct financial interests in how the COVID-19 response plays out. The companies – including medical manufacturers like 3M and Honeywell, major employers of frontline workers, and big banks – have the power and responsibility to reverse the Chamber’s lobbying agenda that prioritizes corporate control and profit over public health and well-being.
Large U.S. companies such as Honeywell and 3M have received the biggest orders, but the Trump administration also has signed high-dollar deals with third-party vendors selling masks for many times the standard price.
The Federal Emergency Management Agency awarded a $55 million contract for N95s this month to Panthera Worldwide LLC, which is in the business of tactical training. One of its owners said last year that Panthera’s parent company had not had any employees since May 2018, according to sworn testimony.
It also has no history of manufacturing or procuring medical equipment, according to a review of records produced as a result of legal disputes involving the company and its affiliates.
White House says new small business loan program is out of money, leaving many firms grasping for lifelinesCARES: Coronavirus Aid, Relief, and Economic Security (for banks) ActA new lending program for small businesses maxed out Thursday morning and stopped accepting claims, but a bitterly divided Congress looked unlikely to address that growing problem as the nation plunged into unemployment levels not seen since the Great Depression.Republicans Refuse to Assist State and Local Governments. Why?
The Small Business Administration said on its website that the agency “is unable to accept new applications … based on available appropriations funding.”
Naturally the result of this is an insanely stupid fight between Republicans and Democrats. Republicans want to add more funding to the program and Democrats are fine with that. But they also want a big chunk of money for state and local governments, which, for some reason, Republicans oppose. But why? Why are Republicans against assistance for state and local governments that have suffered huge revenue shortfalls during the coronavirus lockdown?
It’s a mystery. Republicans have long been opposed to bailouts for state governments, apparently believing that recessions are a good opportunity to punish them for profligate spending. Or something. I honestly don’t know. But whatever the reason, you’d think a massive pandemic would change their thinking a bit. But it hasn’t.
Some Banks Keep Customers’ Stimulus Checks if Accounts Are Overdrawn — Financial institutions can use the government deposits to make up for recipients’ negative balances.The phenomenon is swiftly becoming a political issue, with Treasury Secretary Steven Mnuchin fielding calls from senators urging him to ensure that relief money isn’t garnished. Banks are legally allowed to withhold funds that go into accounts that have negative balances, and no specific provision in the CARES Act, the $2 trillion relief package that authorized the stimulus payments, prevents banks from taking customers’ stimulus money to cover debts.USAA Grabs Coronavirus Checks From Military Families — The bank, one of the nation’s largest, has told customers it would use the $1,200-per-person payments to offset existing debts.
The practice isn’t limited to small institutions. A Minneapolis woman said that she and her husband, a disabled veteran, had been anxiously awaiting help but that their bank, USAA, a financial services company that serves members of the military and their families, told them on Wednesday that it was keeping the money because their account was overdrawn. They had lost access to that account because they couldn’t afford to pay off what they owed.
USAA, the veteran-serving financial institution, took $3,400 in CARES Act payments from the family of a disabled veteran to offset an existing debt, denying the family emergency funds during a time of personal economic stress. Text messages from USAA customers show that this is not an isolated incident. In fact, USAA is using a boilerplate statement to respond to customer complaints about taking their payments.Mnuchin Knew Two Weeks Ago That Financial Predators Could Grab Emergency Coronavirus Checks
According to the wife of the veteran, a USAA representative told her in a phone conversation that they “shouldn’t have gotten into debt in the first place,” and refused to give back the $3,400 CARES Act payment. [...]
In a statement, USAA spokesperson Matthew Hartwig acknowledged that “a stimulus payment could be reduced when we execute legal garnishment or lien requirements … a reduction can also occur in circumstances when the stimulus payment is deposited into an account with a negative balance.” Hartwig added that USAA is “continuing to examine ways to address such occurrences during this pandemic.”
“On a call with Secretary Mnuchin on April 1, Senator Brown raised the garnishment issue to Secretary Mnuchin, who at the time was not aware of the issue,” according to a statement from Senator Brown’s office. Mnuchin negotiated the CARES Act directly, and it passed a week before Brown confronted him over the garnishment issue. So Mnuchin claimed in this phone call that, a week after crafting the legislation, he was unaware of how CARES Act payments, intended to provide food, medicine, and basic necessities to millions of Americans in an emergency, could instead pass into the hands of creditors.Glitches prevent $1,200 stimulus checks from reaching millions of Americans
Several million people who filed their taxes via H&R Block, TurboTax and other popular services were unable to get their payments because the IRS did not have their direct deposit information on file, according to the Treasury, companies and experts.Stimulus Oversight Panel Has One Person Trying to Watch $2.2 Trillion Alone
On April 6, Bharat Ramamurti became the first person named to the Congressional Oversight Commission supposed to police the massive coronavirus relief fund. A former top staffer for Senator Elizabeth Warren, Ramamurti expected to have company -- the new law requires congressional leaders to appoint a five-member panel.The next coronavirus relief bill needs to solve America's unbanked and unwired crises
He’s still waiting.
As tens of billions of taxpayer dollars from the $2.2 trillion relief bill begin flowing out the door, Ramamurti remains the lone member appointed to the panel. With no colleagues, no staff, and no office, he’s had to rely on one of the few avenues he has to communicate with the public: his unverified Twitter feed.
“I’m eager for the commission members to be named and for us to get up and running,” he says. “In the meantime, I’m trying to perform some oversight and use what tools I have available right now to start asking some basic questions. Money is moving around in the blink of an eye and it’s not at all clear what it all means and who it’s helping.”
The next coronavirus relief package will almost certainly feature more direct payments to families, but, this time, it should include provisions to immediately bring as many households as possible into the banking system. For example, Congress could direct banks to cash stimulus checks or receive wire transfers without any fees, even for people who don’t have accounts with them. Congress also could change the Community Reinvestment Act to include the issuance of bank accounts with no account minimums and no (or minimal) fees or revisit the idea of allowing Americans to open up checking or savings accounts at post offices. These proposals can get future coronavirus relief payments to families more quickly and, when this crisis is over, give millions the foothold in the financial system that they need to start building savings and wealth for the future. There is a lot of historic mistrust among immigrants, low-income people and communities of color toward the banking system, and just giving them access to accounts won’t magically waive that mistrust away. But it’s a start.‘Disaster socialism’: Will coronavirus crisis finally change how Americans see the safety net?
In 2020, a liberal is a conservative who’s been exposed to the coronavirus. It was almost surreal to watch a suddenly kinder, gentler-sounding Mike Pence declare that “[w]hen we tell people, ‘If you’re sick, stay home,’ the president has tasked the team with developing economic policies that will make it very, very clear that we’re going to stand by those hard-working Americans.” Aren’t these the same people fighting in court to deny health insurance to hard-working Americans with other types of pre-existing medical conditions? (Spoiler alert: Yes, they are.) [...]Nancy Pelosi Needs to Get Her Act Together
In arguably the most well-timed paper in the history of American academia, research co-led by a Temple University professor — and dropped by the National Bureau of Economic Research on Monday, in the heat of the coronavirus debate — found that the economic costs of paid sick leave are surprisingly low while other gains are high.
Temple economist Johanna Catherine Maclean and her two colleagues, using a treasure trove of wage and benefit data reported to the U.S. Labor Department from 2009 to 2017, when a number of state and local mandatory paid-leave laws were enacted, found workers in those jurisdictions took just two more sick days a year. There was no significant effect on business, and the researchers calculated the per worker cost at 20 cents per hours. But the workers were healthier and better off, and probably had better morale. And they weren’t making their co-workers sick when they could afford to stay home — even before the coronavirus reached America.
Maclean told me on Wednesday that “sometimes it takes a crisis” for leaders to see the benefits of something like paid sick leave, even though polls before the coronavirus showed roughly 75 percent of Americans support such laws. “We see this pattern,” she said, “where it takes a troubling development to rise the value of a policy change to policy makers.”
It turns out that Pelosi doesn’t want to have to call the House into session, partly because of legitimate concerns of risks to members’ health. But nor does she want to permit remote voting, for fear of setting a precedent once the pandemic is over—members not showing up because it’s more convenient to vote remote. [...] It’s not rocket science to devise a system for secure remote voting—the same thing Democrats are demanding for the November election, but with far fewer people. Nor is it rocket science to strictly limit the emergency rules, say for 90 days. [...]As pandemic lingers, U.S. House looking 'very closely' at remote voting
The list of demands put forth by Pelosi and Schumer in their current negotiations with McConnell is also too feeble. They are mainly demanding more funding, which is good, but the convoluted system for getting the aid out needs to be reformed as well.
Congress also needs to drastically increase the oversight of the Fed, including statutory requirements to disclose names of beneficiaries of Wall Street bailouts, as well as the terms, which the Fed is keeping confidential. And Congress needs to legislate an oversight panel for the bailouts, fully independent of Trump.
House majority leader Steny Hoyer said none of the leaders of Congress want remote voting to be routine.
“But in an emergency situation ... we ought to have an alternative,” he told reporters on a conference call. “I want to assure you and the American people, it’s being worked on very hard.”
Leaders are looking at some of the technological ways remote voting could be done, Hoyer said.
But none of the approaches could be done immediately, because congressional rules would have to be modified and there would have to be agreement between Republicans and Democrats, Hoyer said. He noted lawmakers would also have to vote to bring about the rule changes necessary for remote voting. This would require more than 500 members to return to the Capitol, if both the House and Senate took the step.
This thread has been archived and is closed to new comments