The Economy as Pandora’s Box

Bloomberg is reporting that Trump is preparing to order all U.S. meat packing plants to either re-open or remain open.

Trump plans to use the Defense Production Act to order the companies to stay open as critical infrastructure, and the government will provide additional protective gear for employees as well as guidance, according to the person.

The order sets the stage for a showdown between America’s meat giants, which have been pressing to reopen plants, and some local officials and labor unions who’ve called for closures in a bid to prevent the virus from spreading. The president himself has long agitated for Americans to return to work and restore an economy crippled by social distancing measures.

Trump must be worried he won’t be able to get an overcooked steak or hamburger whenever he wants one.

Farmers are dumping all kinds of food, including crops, milk, eggs, and livestock, because the supply chains are screwed, and in response the Secretary of Agriculture, Sonny Purdue, has provided more happy talk than help. Many expect big food shortages down the road, and there there are long lines at food pantries now. But Sonny Purdue tells us not to worry. Even so, Trump will see to it that meat packing workers — a considerable percentage of whom are immigrants — risk their lives to keep the meat coming.

Meanwhile, Trump lawyer and alleged Attorney General Bill Barr has sent a directive to federal attorneys to watch out for states going too far with their pandemic restrictions. What “too far” means is open to interpretation, I suppose. Barr has been under pressure from conservatives to get more involved in ending the pandemic restrictions to get the economy going.

Speaking of wackjobs, an Illinois county circuit court judge has issued a restraining order exempting one Illinois legislator from having to adhere to a stay-at-home order.

As some Republicans seeking to reopen the economy launch a full-court press against stay-at-home restrictions, one GOP lawmaker in Illinois scored an unusual legal victory on Monday — for himself.

State Rep. Darren Bailey apparently became the only person in Illinois, besides essential workers, who is now exempt from Democratic Gov. J.B. Pritzker’s stay-at-home order after a judge in southern Illinois granted a temporary restraining order blocking the state from enforcing Pritzker’s order against him.

Now, Bailey is evidently free to roam wherever he pleases, but he said Monday that was not the main reason he sued the governor.

“The governor was just clearly overreaching his authority and his powers,” Bailey, a farmer who represents a rural district in southern Illinois, told The Washington Post.  …

… In Bailey’s quest against Pritkzer’s order, the lawmaker argued that the governor’s continued extensions of the stay-at-home order, recently extended through May, were illegal. He charged that the Illinois Emergency Management Agency Act restricted the governor’s emergency powers to 30 days from the day he declared a disaster, which was March 9, without allowing extensions. The state sought a continuance of the case.

Here’s the especially odd part:

Clay County Circuit Judge Michael McHaney said in his Monday ruling that there was a “reasonable likelihood” that Bailey would succeed in making that argument when the court considers its merits. He said Bailey “has shown he has a clearly ascertainable right in need of immediate protection, namely his liberty interest to be free from Pritzker’s executive order …” He agreed that Bailey has shown that he will be “irreparably harmed” without swift court intervention, although the judge did not explain his rationale.

Although McHaney’s ruling doesn’t extend to anyone except Bailey, as he is the sole plaintiff, it appears to provide a framework for other similar lawsuits around the state, which Bailey would welcome. Bailey said that he hopes his case will ultimately result in the order being invalidated for the entire state — a possibility that Pritzker appeared concerned about during his Monday news conference.

No, I haven’t found out why Rep. Bailey is uniquely harmed by the stay-at-home orders and requires special privileges to not be bound by them. Gov. Pritzger is appealing the ruling, obviously.

See also The Pandemic, the Constitution, and Civil Liberties.

It does strike me that there’s a lot of magical thinking going on out there among Republicans. They are still trying to will away the pandemic with their mind-beams rather than deal with the reality of it. There is reason to believe that ending restrictions prematurely will cause a resurgence of infections and death, which is not going to help the economy. On the other hand, it might be that sparsely populated parts of the country wouldn’t have that problem. The medical science people are still figuring out how this virus works. Without being able to test people, we’re flailing around in the dark.

Republicans, however, are certain the economy has to be re-opened now, because otherwise they are going to have to consider more stimulus spending. And you know the drill — all of a sudden, they care about deficits. So, they see the re-opening of the economy as imperative. But they may be opening Pandora’s box and letting the nasties out.

At Politico, Ben White writes that Trump faces the risk of a coronavirus cliff.

Republicans are trying to pull off a high-wire act over the next three months: Reopen the economy enough to get most jobless Americans back to work and off the public dole, while resisting another giant stimulus package.

If they fail, they’ll face a coronavirus cliff — an even deeper collapse in spending and sky-high unemployment in the months before Election Day. That could both damage President Donald Trump’s reelection prospects and put the party’s Senate majority at serious risk. …

… Republicans are currently betting that efforts to reopen states will be successful and the nearly $3 trillion already allocated by lawmakers — the largest federal rescue in American history — will be at least close to enough to start bringing the unemployment rate down and sending economic growth back up.

In other words, the priority is to get the economy working again so it doesn’t mess with their election chances. However, IMO, you have to deal with the virus first. All the mind-beams and happy talk in the world won’t do a damn bit of good if the rate of infections and deaths keep climbing. Economists keep saying that it’s not an either-or; meaning it’s not a choice between dealing with the virus or reviving the economy. The economy will not recover as long as the virus is spreading around out there. You have to deal with the virus.

See also Gabriel Sherman, Inside Donald Trump and Jared Kushner’s Two Months of Magical Thinking. The reason we’re in this mess is that Trump refused to deal with the virus.

Jared Kushner, Trump’s son-in-law, shared Trump’s view that the media and Democrats were hyping the crisis for political purposes. And for both of them, the biggest worry was how the response to the coronavirus might impact the health of the economy. According to sources, White House trade adviser Peter Navarro, a fierce China hawk, and deputy national security adviser Matt Pottinger, a former China-based Wall Street Journal reporter who’d covered the 2003 SARS pandemic, argued to officials in mid-January that the White House needed to shut down incoming flights from China.

Kushner pushed back. “Jared kept saying the stock market would go down, and Trump wouldn’t get reelected,” a Republican briefed on the internal debates said (a person close to Kushner denies this). Kushner’s position was supported by Treasury secretary Steven Mnuchin and National Economic Council chief Larry Kudlow. Trump sided with them. At the World Economic Forum in Davos, Trump minimized the threat in his first public comments. “It’s one person coming in from China, and we have it under control,” he told CNBC. (The White House and Treasury Department deny Mnuchin and Kudlow were against closing flights.)  …

…Navarro and Pottinger finally convinced Trump to stop the flights when they showed him that more than 400,000 people had entered the U.S. from China since early January. “Trump was stunned by the sheer scale,” a Republican briefed on the meeting told me. “Navarro banged on the table enough to get the flights stopped.” On January 31, Trump barred travel from China. Even then, it was a half measure: the ban only applied to non-Americans who had traveled to China in the previous 14 days. American citizens could come and go.

Trump saw this as the end of the story—he’d taken strong public action, built his China Wall. Now, he looked forward to hitting the campaign trail and trumpeting the booming stock market. “He just wanted to hold rallies and watch television,” a former West Wing official said. “We pretty much shut it down coming in from China,” Trump told Sean Hannity during a pre–Super Bowl interview on February 2. He held a half dozen rallies over the next month.

Do read the entire piece; it’s fascinating. Of course, we now know that the daily presidential intellligence brief that Trump famously doesn’t read carried warnings about the virus beginning in January. So you had practically the whole planet sending warnings to Trump to deal with the virus, and except for the January 31 travel ban he ignored it all until the stock market tanked. He seems to have believed that if he just ignored it, the virus would go away.

Republicans seem to be making the same mistake. And I wonder, if the meat packing plants continue to be covid-19 hot spots, if we’ll even still have hamburger? If not, would Republican legislators volunteers to work in them? Not likely.

7 thoughts on “The Economy as Pandora’s Box

  1. I remember the Soviet Union had what it called "National Sacrifice Areas" – portions of their country where this or that experiment ran amuck and the poor saps who lived there, well tough luck.  The meat packing plants are going to be our National Sacrifice Areas – Trump is scared of food prices going out of control – and so what's a few thousand low wage workers?

  2. All the kings horses and all the kings men will soon find that economies are hard to reassemble.  The number of tRump plague deaths is now higher than the total deaths in Viet Nam I hear.  Now he wants to add a battle of hamburger hill to this "war" too. You can bet he won't lead the battle form the front.  He would but those bone spurs…

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  3. The key issue in reopening meat packing plants is liability. Trump seems to think that as a link in the food supply chain, he can push through as an executive order a demand that plants stay open and and issue presidential exemption from liability when the COVID from the plant kills people!

    I'm not at all sure that the exemption of liability for Smithfield doesn't transfer to the federal government. If Trump prevails in the argument that he can suspend portions of civil case law (in the food chain) on his authority, can he extend it to Walt Disney World?

    Two weeks ago, Trump reportedly got an earful from Wall Street when he proposed reopening the country. (Trump expected applause.) The CEOs reportedly told Trump that until there was testing, there would be no consumer confidence and without willing consumers, opening production was meaningless. TESTING and proving to the satisfaction of the citizens that it is safe to return to normal is essential. 

    This wasn't what Trump wanted to hear so he's ignoring it. Testing will be powerful proof we need to proceed incrementally. (Which will cost Dear Leader the election.) Trump decided that Consumer Confidence = corporations terrified of liability. Trump is misreading all the signals from citizens and big business, I think.  

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  4. The pandemic has three lanes: public safety, economic, political.  And there is a dependency map that links the three.  

    Not only is public safety the moral priority, it is also the logical priority, because in this pandemic environment, if you make that the priority then you achieve the other two.  

    The Trump/GOP fail is they are focusing solely on the political, as they do in all things.  As such the priority is on the wrong thing, vis a vis the dependencies, which means failure on some level is practically assured.

    The question is, what will failure look like, for Trump?  First, since both the economic and political are dependent on public health, both are at risk.  It may take longer for the economy to come back, which puts the political, e.g. reelection, at risk.  

    As they don't have the correct prioritization and thus their dependency map is wrong, they won't achieve the results they're looking for. 

    I just hope that when Biden wins in November, Trump will at least be open to working with Biden then, in the way they GW Bush worked with Obama in 2008 to solve the financial crises, to solve this pandemic.  But knowing Trump, it probably won't happen.  I expect Trump to do everything he can to go scorched earth and make things as bad as possible as "payback" for the American people not giving him four more years.

    Things will get uglier. 

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  5. I wrote a comment last night, and it seems that it dusappeared.

     

    No matter…

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