From: Paul Krugman <nytdirect@nytimes.com>
Date: Tue, Apr 21, 2020, 12:30 PM
Subject: Give me liberty and give me death
To: <mbannerman@arcstarenergy.com>
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Much of the U.S. economy is currently shut down, and rightly so. But now there's a backlash against the restrictions that have slowed the coronavirus's spread. |
It's not a broad-based popular rebellion — those much-hyped demonstrations at state capitols are more astroturf, organized by right-wing groups with close ties to the Republican establishment, than genuine grass roots protests. And irresponsible politicians like Georgia's governor, who is reopening gyms and beauty salons even as Covid-19 rapidly spreads in his state, are clearly responding to top-down pressure from Donald Trump rather than popular demand. |
But it's happening all the same. Why? |
The answer, I'd suggest, is that the Trump administration and its Senate allies are botching pandemic economics — and at some level they know that. So they're desperate to wish the problem away before the failure of their response becomes too obvious. |
To be fair, the problems posed by Covid-19 are both novel and incredibly fast moving. Still, both logic and other countries' experiences have given us a pretty good idea of what we should be doing right now. First, lock down high-contact economic activities, to slow the viral spread. Second, provide generous disaster relief to those whose incomes have been cut off by the lockdown. Third, rapidly ramp up testing and tracking, so that when we (cautiously) restart normal life we can quickly identify and neutralize any emergent hot spots. |
The trouble is that we're falling down badly on (2) and (3). |
True, Congress voted a lot of money in enhanced unemployment benefits and small-business loans. But it's becoming increasingly clear that the money isn't reaching the Americans who need it, largely because the federal government didn't take responsibility for how the money was spent. |
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Enhanced unemployment benefits are a really good idea. But the federal program is being run through state unemployment offices, which have been starved of funds for decades — in many cases because conservative state governments wanted to make benefits hard to claim. As a result, there is a huge backlog of unprocessed claims, and millions of Americans have yet to see a dime. |
It didn't have to be this way. Canada introduced an Emergency Response Benefit for those losing income as a result of the coronavirus, implemented directly by the federal government and easily accessible via a government portal and hotline; the program began paying out up to $2,000 a month almost immediately. |
Meanwhile, those small business loans are being run through private banks, under criteria that let huge restaurant and hotel chains claim that each of their locations is a small business; not surprisingly, these giants, which have strong relationships with big banks, quickly snapped up almost all the money, with little flowing to the intended beneficiaries. |
And behind this failure to provide economic relief, we're not seeing anything like the rapid rise in testing we need to start reopening safely. |
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A different president might have responded to these developments with a crash effort to fix the problems, the way the Obama administration dealt with the initial 2013 Obamacare debacle. But Trump being Trump, he's disavowing any responsibility, instead pressuring states to ignore the health risks and abandon the social distancing that has blunted the pandemic. |
If you ask me, this isn't just cruel, it's politically stupid. As we've just seen, viruses move fast. A few days ago we were starting to see signs that Covid-19 might be peaking. But relax our vigilance, even a bit, and a second, bigger wave of deaths could easily happen well before the election. |
But Trump and his allies don't seem able to wrap their minds around the idea that it's their job to solve problems, not shift the blame. And I don't know about you, but I'm getting even more scared than I was. |
Quick Hits |
Only 1 in 8 Floridians approved for unemployment benefits have actually gotten any money. |
Coming next: the state and local fiscal crisis. |
Here's the Canadian application portal for emergency aid. |
Americans have rallied around their governors. Trump, not so much. |
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Feedback |
If you're enjoying what you're reading, please consider recommending it to friends. They can sign up here. If you want to share your thoughts on an item in this week's newsletter or on the newsletter in general, please email me at krugman-newsletter@nytimes.com. |
Facing the Music |
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I was literally around the millionth person to see Curt Smith of Tears for Fears performing "Mad World" with his daughter, but it's still worth sharing. |
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