economics & the virus

If you’re gonna use your one shot on tv to go out in a blaze of glory, you do it like this:
pic.twitter.com/WRKbNmLIYi

— Imraan Siddiqi (@imraansiddiqi) April 10, 2020

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‘They don’t get to summer in the Hamptons? Who cares?’: CEO says US should let companies owned by billionaires get ‘wiped out’ during the coronavirus crisis

https://www.businessinsider.com/us-should-let-billionaires-companies-fail-no-bailouts-chamath-palihapitiya-2020-4

Social Capital CEO Chamath Palihapitiya told CNBC that poor-performing billionaires, hedge funds, and massive companies — including airlines — deserved to be “wiped out” during the coronavirus pandemic.

During the interview, Palihapitiya said “zombie” companies run by billionaires that aren’t performing well shouldn’t be propped up during the public-health crisis. They should be exposed to the market forces at play, he added.

Nearly 10 million Americans filed for unemployment in a span of two weeks. Palihapitiya said average Americans filing for unemployment would bear the brunt of the economic crisis, not billionaires, their companies, or hedge funds.

“On Main Street today, people are getting wiped out. And right now, rich CEOs are not. Boards that have horrible governance are not. Hedge funds are not. People are,” Palihapitiya said. “It’s happening today to individual Americans, and what we’ve done is disproportionately prop up and protect poor-performing CEOs’ companies and boards. And you have to wash these people out.”

But Palihapitiya said the employees of these companies would not be at risk if the companies went under — instead, speculators and the wealthy would take the hit.

“When a company fails, it does not fire their employees, it goes through a packaged bankruptcy,” Palihapitiya said. “If anything, what happens is the people who have pensions inside those companies, the employees of these companies, end up owning more of the company.”

“Just to be clear, who are we talking about? We’re talking about a hedge fund that serves a bunch of billionaire family offices?” he said. “Who cares? Let them get wiped out. Who cares? They don’t get to summer in the Hamptons? Who cares?”

As the economy slips into further disarray, the US has government stepped in. The Senate passed the Coronavirus Aid, Relief, and Economic Security Act nearly two weeks ago to support people, businesses, and the healthcare system. And the Federal Reserve also plans to boost the economy by providing $2.3 trillion in aid, which includes loans to businesses, big and small.

But Palihapitiya stressed the idea that the economy would be better off if the Fed gave money to average Americans, rather than financing businesses.

“I’m not disagreeing with what the Fed has to do,” Palihapitiya said. “What I’m saying is it’s creating a land mine, and it’s creating a bill that will have to come due.”

An Epidemic of Hardship and Hunger
Why won’t Republicans help Americans losing their jobs?

Paul Krugman

link https://www.nytimes.com/2020/05/07/opinion/coronavirus-republicans-jobs.html

Covid-19 has had a devastating effect on workers. The economy has plunged so quickly that official statistics can’t keep up, but the available data suggest that tens of millions of Americans have lost their jobs through no fault of their own, with more job losses to come and full recovery probably years away.

But Republicans adamantly oppose extending enhanced unemployment benefits — such an extension, says Senator Lindsey Graham, will take place “over our dead bodies.” (Actually, over other people’s dead bodies.)

They apparently want to return to a situation in which most unemployed workers get no benefits at all, and even those collecting unemployment insurance get only a small fraction of their previous income.

Because most working-age Americans receive health insurance through their employers, job losses will cause a huge rise in the number of uninsured. The only mitigating factor is the Affordable Care Act, a.k.a. Obamacare, which will allow many though by no means all of the newly uninsured to find alternative coverage.

But the Trump administration is still trying to have the Affordable Care Act ruled unconstitutional; “We want to terminate health care under Obamacare,” declared Donald Trump, even though the administration has never offered a serious alternative.

Bear in mind that ending Obamacare would end protection for Americans with pre-existing conditions — and that insurers would probably refuse to cover anyone who had Covid-19.

Finally, the devastation caused by the coronavirus has left many in the world’s wealthiest major nation unable to put sufficient food on the table. Families with children under 12 are especially hard hit: According to one recent survey, 41 percent of these families are already unable to afford enough to eat. Food banks are overwhelmed, with lines sometimes a mile long.

But Republicans are still trying to make food stamps harder to get, and fiercely oppose proposals to temporarily make food aid more generous.

By now everyone who follows the news has a sense of how badly the Trump administration and its allies botched and continue to botch the medical side of the Covid-19 pandemic. Weeks of denial and the failure to implement remotely adequate testing allowed the virus to spread almost unchecked.

Attempts to restart the economy even though the pandemic is far from controlled will lead to many more deaths, and will probably backfire even in purely economic terms as states are forced to lock down again.

But we’re only now starting to get a sense of the Republican Party’s cruelty toward the economic victims of the coronavirus. In the face of what amounts to a vast natural disaster, you might have expected conservatives to break, at least temporarily, with their traditional opposition to helping fellow citizens in need. But no; they’re as determined as ever to punish the poor and unlucky.

What’s remarkable about this determination is that the usual arguments against helping the needy, which were weak even in normal times, have become completely unsustainable in the face of the pandemic. Yet those arguments, zombielike, just keep shambling on.

For example, you still hear complaints that spending on food stamps and unemployment benefits increases the deficit. Now, Republicans never really cared about budget deficits; they demonstrated their hypocrisy by cheerfully passing a huge tax cut in 2017, and saying nothing as deficits surged. But it’s just absurd to complain about the cost of food stamps even as we offer corporations hundreds of billions in loans and loan guarantees.

But what’s even worse, if you ask me, is hearing Republicans complain that food stamps and unemployment benefits reduce the incentive to seek work. There was never serious evidence for this claim, but right now — at a time when workers can’t work, because doing their normal jobs would kill lots of people — I find it hard to understand how anyone can make this argument without gagging.

So what explains the G.O.P.’s extraordinary indifference to the plight of Americans impoverished by this national disaster?

One answer may be that much of America’s right has effectively decided that we should simply go back to business as usual and accept the resulting death toll. Those who want to take that route may view anything that reduces hardship, and therefore makes social distancing more tolerable, as an obstacle to their plans.

Also, conservatives may worry that if we help those in distress, even temporarily, many Americans might decide that a stronger social safety net is a good thing in general. If your political strategy depends on convincing people that government is always the problem, never the solution, you don’t want voters to see the government actually doing good, even in times of dire need.

Whatever the reasons, it’s becoming increasingly clear that Americans suffering from the economic consequences of Covid-19 will get far less help than they should. Having already condemned tens of thousands to unnecessary death, Trump and his allies are in the process of condemning tens of millions to unnecessary hardship.