A staggering 6.6 million Americans file for unemployment.
Plus, a question about the Defense Production Act.
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Today’s read: 8 minutes.
Another Tangle poll (please take it!), the huge unemployment numbers and a question about the Defense Production Act.
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What D.C. is talking about.
Unemployment. A record 6.6 million Americans filed for unemployment benefits last week, smashing previous unemployment records that had been set a week ago. 3.3 million Americans applied for unemployment benefits in the last report, which was nearly five times higher than any week in American history. The previous single-week record was 695,000 unemployment claims set in 1982. More Americans have now filed for unemployment in the last two weeks than in the prior six months combined. “The speed and magnitude of the labor market’s decline is unprecedented,” Constance Hunter, chief economist at KPMG LLP, told The Wall Street Journal. Hunter said she projected 20 million jobs will be lost due to shutdowns across the country related to coronavirus. The claims are expected to keep rising as many states weren’t able to process the influx of claims, some phone lines were jammed and websites crashed due to the overload, and some states still haven’t begun enforcing stay-at-home orders but are expected to soon. The CARES Act passed by Congress last week also increases the number of people eligible for unemployment benefits and is expected to bring in more claims as well.
What the right is saying.
What did you expect? This is what happens when you push for massive government shutdowns of the entire economy. Liberals, Trump and all the “experts” are now seeing the ramifications for what they’ve done — an economic catastrophe unfolding like nothing we’ve seen before. “I see a lot of people seem shocked by the jobless numbers,” Reason’s Robby Soave said. “What exactly did you think was going to happen when we completely shut down the economy?” Ryan Girdusky, a Trump supporter and author of a book on nationalism, suggested we “Shut down all immigration until we get Americans back to work.” Others immediately started taking aim at the CARES Act, which they said didn’t go nearly far enough to protect small businesses or help regular Americans. “There is a prevailing sense right now of resolve, and the rally 'round the flag sentiment is palpable,” Noah Rothman tweeted. “But this is criminally negligent and it won't take long before forbearance gives way to anger.” Some reporters at the conservative-funded outlet The Federalist began calling this a “government-mandated Great Depression.”
What the left is saying.
We need more money to more people faster. These numbers are so startling and so scary that everyone should be receiving $1,200 checks, or larger, for longer periods of time. One-time payments and unchecked corporate loans are not going to fix this. It’s also worth noting that, along with the 10 million people who have now lost their jobs, many millions of those are also losing their health insurance. A good deal of left-wing Bernie Sanders supporters are using this moment to remind everyone why tying insurance to employment is so dangerous. Many on the left were trying to humanize the numbers, reminding people that millions of low-wage workers had lost their jobs and were now facing unimaginable strain, pain and stress in their every day lives. Many would be fighting to feed their families. And plenty of people were pointing the finger at Trump, saying his delayed action that allowed the coronavirus to spread is what caused this.
My take.
It’s hard to put into words how devastating this is. I know there will be a lot of hot takes and op-eds about who is to blame, but really all I can say on a day like today is that 10 million people filing for unemployment benefits in a two-week span is difficult to comprehend. There are a lot of people out there who are hurting right now, and I encourage you to do whatever you can — financially, emotionally or otherwise — to support them. Two weeks ago, more than 70% of Tangle readers said they knew someone who was facing reduced working hours or had lost their jobs. Twice as many people filed for unemployment benefits this week than last week, so I imagine that number is now nearing 100%. These statistics lay bare the limits of the federal government’s response and demand more action — and I imagine we’ll see it in the coming weeks. They also remind us of the incredibly challenging choice we’re facing: putting millions at risk of being killed by a highly contagious virus or bankrupting the country from top to bottom. It should give everyone pause to consider that there really is no perfect or good option here. While Congress is divided on what to do next, I am certain that an economic movement like this is going to reshape our politics for years to come depending on how Congress handles it and how people are treated.
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Your questions, answered.
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Q: Trump has been using the Defense Production Act throughout his first term and now when we need it most he’s not enforcing it. What gives? Where’s the outrage? What could possibly be the rationale for this?
- Andrew, Tampa Bay, FL
Tangle: First off, for readers who aren’t familiar, I just want to note what the Defense Production Act is. The act was passed in 1950 during the Korean War and it was designed to give the government power over privately-owned companies when it needed them to re-direct resources to address a national crisis. It essentially gives the government the steering wheel on industrial production. As you noted, the act is regularly used by the government, especially the Defense Department, who uses is at often as 300,000 times a year, according to The New York Times.
While it doesn’t give the government complete control over a company, it does allow the government to leapfrog companies who may be ahead in the supply chain or determine where a manufacturer’s materials are sent.
Before I touch on the rationale or the “why” behind Trump’s seemingly delayed use of the DPA, I just want to note that the president is now, in fact, using it. As of Friday, he had pressed General Motors into the production of ventilators and the feds even used it to raid the home of a Brooklyn hoarder who had stockpiled surgical masks. I think we’ll see it used more often and more broadly in the weeks ahead.
As for the rationale, it’s actually pretty simple: it’s politics. Some have argued that Trump is actually embracing DPA and wants the image of a wartime president. I think that’s a reasonable argument, but I’m not sure I’m sold on it. There are two main features of Trump’s presidency that he continuously tries to sell to his base. One is that he is pro-business and the other is that he is going to keep the government out of your life. Both of these come into play when considering his response to the pandemic. If you’ve been watching his press conferences, you’ll notice that every other day he’s up there with business leaders who are committing themselves to working against the pandemic. That’s a political visual that really resonates with a lot of Trump supporters and is part of his brand that he can activate the private business world to get things done the government can’t accomplish on its own.
The second part of it is the way the DPA is perceived by a lot of folks on the right. It’s a “government takeover” of a “private company.” Using it also puts the blame and responsibility squarely on the president’s shoulders. As cynical as it is, I really do think there is an element here where POTUS does not want the government to be solely responsible for this pandemic. Using the DPA broadly to take over factories and direct them to produce these materials would be another huge task that his team is responsible for and could blow up spectacularly if it goes wrong. Pressuring GM or Ford or anyone else to join the party and help allows him to say America’s best companies are fighting alongside him and are also partially responsible for the outcome. Check out this tweet:
Finally, there are plenty of thoughtful conservatives who view this pandemic rationally and just fundamentally believe the DPA is not a good solution. Many of them have Trump’s ear. “The Defense Production Act isn’t a magic wand,” Neil Bradley, the chief policy officer at the U.S. Chamber of Commerce, told the Times. “It can’t produce highly specialized manufacturing equipment overnight… It can’t convert a refrigerator factory into a ventilator factory.”
Thomas Spoehr wrote in the Daily Signal that Trump should identify needs, provide industry members with resources and permission “then get out of the way so it can produce what the nation needs… Describing what the nation needs and allowing the industry to self-select what capabilities it can offer toward those requirements is a winning strategy.” Joseph Antos wrote in RealClearHealth that companies who produce other kinds of materials or clothing can ramp up to 24-hour production and shift their manufacturing to masks or gowns or whatever is needed. “They do not need an order from Washington to respond to the obvious business opportunity and public health need,” Antos wrote.
All this being said, I think it’s a huge mistake to sit on the sidelines and cheerlead companies here. Whiskey companies making hand sanitizer or clothing companies switching to N-95 masks is one thing, and may not require federal intervention, but that’s not all we need. No private industry — or very few — are going to step up and start making $30,000 ventilators en masse that they may not be able to sell or have no assurance will be subsidized. It just isn’t going to happen, at least not regularly, unless the government demands it. William McGurn put it aptly in the Wall Street Journal: “If there’s a role for government, it’s probably to help set a number for how many are needed, and then provide a guarantee to manufacturers for any they can’t sell or to hospitals for any [they] end up not needing. That’ll cost taxpayers a pile of money. But it is at least targeted to a defined need. [Ventec CEO Chris] Kiple says if the White House and hospitals want to see ventilators produced and deployed quickly, the orders need to come in now.”
By the way.
During the coronavirus lockdown, many people are being quarantined or shut-in with abusers. Experts say an increase in domestic violence is expected and some organizations are already asking for more funding or resources to handle the uptick. If you or someone you care about needs help, the National Domestic Violence Hotline can be reached by calling 800-799-7233, by texting LOVEIS to 22522 or by going to thehotline.org.
A story that matters.
America’s latest labor movement is being ignited thanks to the coronavirus. After years of deteriorating unions and private corporations beating back labor movements, American workers are increasingly coming together to demand better health care, higher wages and expose safety issues they face on the job. The coronavirus pandemic has only invigorated these workers, as we’ve seen with Whole Foods employees petitioning Amazon or flight attendant and auto workers who are now fighting for better working conditions. Even nurses across the U.S. are staging walkouts, and each of the movements is being elevated and shared through the power of social media. The impact, though, is mixed: while social campaigns get sporadic and loud media attention, they also tend to fizzle out and fail to make lasting change. More attention doesn’t always mean better results. Axios has the story here.
Numbers.
186,333. The number of jobless claims filed in California last week.
692,394. The number of jobless claims filed in California this week.
80%. The rough estimate of Americans who are now under coronavirus lockdown after Florida, Georgia, Missouri and Nevada issued stay-at-home orders yesterday.
3.7 million. The number of gun background checks the FBI processed in March, a new one-month record.
1 million. The number of N95 masks being flown into Massachusetts on the New England Patriots football team’s plane, thanks to owner Robert Kraft.
4 million. The number of Los Angeles residents performing essential tasks like grocery shopping who were advised by Gov. Gavin Newsome to begin wearing homemade, non-medical face coverings when they go outside.
24 hours. On Wednesday, the amount of time that Georgia Gov. Brian Kemp said he’s known asymptomatic coronavirus people can carry the virus, something health experts have been warning for months.
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Aspen Neuroscience just raised $70 million in funding and is set to begin clinical trials on a stem cell treatment for Parkinson's Disease. Roughly 60,000 Americans are diagnosed with Parkinson’s every year and an estimated one million Americans are living with it. In 2012, Shinya Yamanaka and John Gurdon won the Nobel Prize for a stem cell replacement idea to cure Parkinson’s. Dr. Jeanne Loring, who helped create Aspen Neuroscience, is using that research to explore a cure. The stem cell therapy has huge potential in the space, and the funding haul is a sign that investors believe in the potential of the cure just as much as the scientists do. Click.