Treasury Secretary Steven Mnuchin and Federal Reserve chair Jerome H. Powell are testifying to the Senate Banking Committee today.
Mnuchin warned that there would be “risk of permanent damage” to the economy if businesses do not re-open right away. This is the same guy who has been sitting on billions of dollars in stimulus funds since March, but he hasn’t gotten around to disbursing most of it. This was a major point of concern for some senators.
The Fed is in the process of rolling out a series of emergency lending programs to keep credit flowing into the economy.
More recently, it has announced five new or revamped programs that will be backed by $195 billion in funding, focused on large corporations, the municipal bond market, midsize businesses and asset-backed securities, which are essentially bundles of loans built on students loans, credit cards and other types of debt.
Of those programs, only a portion of one of the corporate credit facilities is up and running. The various facilities have taken time to design, because they are legally complex and have never before been attempted.
Lawmakers repeatedly urged Mr. Mnuchin and Mr. Powell to get the midsize business “Main Street” facility up quickly. Mr. Powell faced questions over why the corporate programs were helping shakier large companies.
“You’ve pointed out that most of the people being hurt are those earning less than $40,000 a year,” said Senator Chris Van Hollen, a Maryland Democrat. “It’s not clear to me how putting money into junk bonds is helping Main Street.”
There were also concerns about the safety of workers.
“How many workers should give their lives to increase our [gross domestic product] by half a percent?” Brown asked Mnuchin.
For the record, Mnuchin didn’t think it was a fair question. But this is the question of the moment — the economy versus lives. Which do we prioritize? Yes, the nation is taking a terrible economic hit, and the longer the restrictions continue, the worse the damage will be. And yes, this is causing terrible stress and harm to millions of individuals who are suddenly without a paycheck. Hey, I’ve been there; I know what being suddenly laid off feels like. It’s a real punch in the gut.
On the other hand, the science guys tell us that if we move to reopen too soon, a lot of people will die who didn’t have to die. The virus is still out there, folks. And because we still don’t have adequate testing, we’re stumbling around in the dark. Maybe if we had better testing, we could be making informed decisions about how much economic activity can be restarted safely. But as it is, we’re all guessing.
The bottom line, as I see it, is that we have no good options. There is no visible course of action that will bring the jobs back in the next few weeks without risking lives. And we’re in this mess because we have no national leadership. The pandemic “response” has been grossly mismanaged from the very beginning and never got better. And that’s why we have no good options. People can argue economy versus lives until they turn purple. No matter what we do, we’ll be stumbling around between deprivation and death for the next several months. That’s just how it is. Do your best and stay safe.
There is no way we’re going to avoid a world of hurt for a lot more people. That would be true even if a miracle happened and we suddenly had a competent federal government going forward. But, unfortunately, Donald Trump is still POTUS. Corrupt wastes of space like Mnuchin are managing what policy Congress creates. Republicans who are opposed to spending that benefits workers — they think spending should only flow to their big-buck donors and themselves — still control the Senate. So it’s not going to get any better.
If we had shut down a lot sooner, if we had tested a lot more, if we could be throwing much more federal money at the states and cities and small businesses and the unemployed to decrease the damage, it wouldn’t be nearly so bad. But Trump is president and Mitch McConnell runs the Senate. So it’s a mess.
See also Max Boot, If Trump had been in charge during World War II, this column would be in German.
And then there are the governors. We’re getting clues that at least some of them are suppressing covid-19 data so that people don’t know how bad it is. Today we learned that the scientist in charge of providing covid-19 data for Florida was fired for refusing to manipulate the data. The Atlanta Journal-Constitution reported on similar shenanigans in Georgia. Georgia’s coronavirus numbers looked good because officials misrepresented the data. See also Georgia’s coronavirus data made reopening look safe. The numbers were a lie.
I’ve written about little else but the pandemic, and Trump’s non-response to it, for the past several weeks. I believe this is truly the biggest failure of leadership in U.S. history. I’m glad to see at least one pundit who has come around to my view of why Trump has been such a disaster — that he is too bleeping stupid to have any idea what is going on.
Why did Trump keep offering estimates so unrealistically low that they were overtaken by events mere weeks later, exposing him to mockery and providing fodder for attack ads? Lies are typically self-serving. Those statements were not. If he was trying to lowball death estimates so that Americans would reelect him, he needed to pick a number that wouldn’t be exceeded until after Election Day. Whether he intended to lie or attempted to tell the truth, he showed an inability to think just weeks ahead in an emergency that could last months or years.
Similarly, why did Trump declare that the virus would disappear when its spread was imminent? Why did he say we’re close to a vaccine when Americans are unlikely to get one before Election Day? Why did he suggest that injecting a disinfectant into the body might cure COVID-19? I used to worry that Trump’s serial mendacity might harm the nation. Now I worry even more that he isn’t lying, but rather lacks the capacity to see errors in the most obvious falsehoods. He appears to be so impulsive and attuned to the time horizon of an individual tweet, television appearance, or news cycle that he cannot strategize over a longer period.
If I believed in an anthropomorphic God, I’d be arguing that God sent the coronavirus to reveal Trump’s spectacular ineptitude so that he wouldn’t be elected again.