Where Is Harry?

As the dangers of a war approach in 1941, Harry Truman, then US Senator from Missouri, proposed creation of a committee to oversee the defense expenditures being made by the federal government. Although at first viewed skeptically by President Franklin Roosevelt, the Senate Special Committee to Investigate the National Defense Program was soon uncovering a variety of unsavory abuses: shoddy camp construction, bad planning and sloppy administration in allocation of vital raw materials, willful misconduct in production of ships and planes, and divided loyalties among dollar-a-year men put in charge of elements of the defense effort while keeping financial ties to their corporations.   

Quickly labelled the “Truman Committee” it would continue to function throughout the war and save billions in defense spending. Truman remained chair until nominated as FDR’s running mate in 1944.

Based on recent news coming out of Washington concerning the pharmaceutical industry’s response to the coronavirus pandemic, the country would benefit from another Harry Truman. Maybe everybody is chomping at the bit to know more about the FBI scheming to elect Hillary Clinton in 2016, but it just might be that how the drug barons are taking advantage of the health crisis and why our government has planned so poorly for a pandemic would be more relevant to the nation’s future.

Let’s look at the planning issue first.

Given the persistent occurrence of major health threats over the past fifty years---AID, HiNi flu, SARS, MERS, etc.---more attention to being prepared for a major pandemic could have been expected. Instead, Congress and administrations under both parties were asleep at the switch.

As early as 2009 the New York Times was reporting that outsourcing of drugs was a cause for concern. Critical ingredients for most antibiotics were being produced primarily in China and India as well as most generic drugs. Applications related to generic drugs mentioned nearly 1200 pharmaceutical plants, but only 13 percent were in the US. Forty-three percent were in China and 39 percent were in India.

Despite the inadequacy of domestic supply, appropriate additions to the Strategic National Stockpile were not made, nor did the federal government insist that hospitals take steps to create a reasonable reserve of PPE. Faced with using over and over the same N95 mask for multiple shifts, a Charleston nurse declared, “Our lives are disposable.”

The Trump administration has attempted to prompt American companies to bring production back to the US, but with little success. America’s for-profit health care industry considers the bottom line above all else.

In another planning miscue, apparently no one gave any thought to how to deal with the economic fallout from a pandemic. The country’s unemployment insurance system is premised on the idea that a quick infusion of money into the pockets of consumers will remedy any economic downturn and workers can expect to be back on the job in short order. But when a health threat is responsible for the economic downturn, the situation is different. Normal economic activity, either on the part of workers or consumers, is not restored until the health threat is gone. With unemployed workers numbering over 30 million, finding a well-paying full-time job to replace unemployment benefits, much less to match earlier earnings, will be nigh impossible

Dealing with the current pandemic is similar to preparing for war. The difference is there is no one you can negotiate a truce or peace treaty with. Only by finding a vaccine to wipe out the virus can the pandemic be ended, but this effort has opened the door to abuse and even criminality normally identified with war.

The Trump administration initiated Operation Warp Speed (OWS) in April with $10 billion provided by Congress to accelerate the process of producing an effective vaccine. At first they announced 14 companies would participate in the program. Since then, the federal government has expanded its funding activities to include several other biotech entities with associated missions. Corporate management has not hesitated to take advantage of the speculation surrounding the chosen companies.

For example, Vaxart, a San Francisco-based outfit with no track record in vaccine development and only 15 employees, announced in late June that its vaccine had been selected for preliminary funding by OWS and its shares began to soar. By the time the New York Times reported in late July that Vaxart had not been selected for funding in the last round at OWS, the hedge fund that owns much of the company had collected nearly $200 million in stock profits.

One of the core companies in OWS, Moderna, also has the distinction of not having brought a vaccine to market. Apparently, it is making some progress in its effort to produce an effective vaccine, but insiders at Moderna have not waited to take their profits, cashing in nearly $250 million since January.   

In late July, the Wall Street Journal reported that Kodak, not known as a drug company, had won a $765 million government loan to assist in expediting domestic production of drugs to treat several medical conditions and to reduce US reliance on foreign countries such as China and India. The loan was to be the first of its kind provided under the Defense Production Act, but two weeks later the loan was on hold. Bloomberg reported that questions arose about purchases of additional shares by Kodak board members shortly before the loan announcement.

The litany of abuses by greedy corporate managers and their financial enablers goes on. Just as in wartime, during this pandemic we need the vigilant attention of government officials committed to the public interest ready to protect the public treasury.

Where is our Harry Truman?    

Saving the Economy

For some time now it has been obvious the US stock market does not reflect accurately the broader conditions within the US economy. The lockdown resulting from the coronavirus surely has convinced any remaining doubting Thomases.

As the threat of the pandemic became clear in early March 2020, the US stock market dropped precipitously. By mid-March when the coronavirus had taken approximately 100 lives in the US, and US unemployment was 4.4 percent, the Dow had sunk to 20,188.52, the NASDAQ was down to 6,904.59, and the S&P had fallen to 2,386.13.  

Now as we near the end of July and the coronavirus has taken more than 150,000 American lives and unemployment in the US is above 11 percent the stock market is firing on all cylinders. The Dow has gained 31 percent since mid-March and the S&P 35 percent. The tech heavy NASDAQ has steamed ahead by 52 percent.

Major factors in the hyper confidence of the stock market have been policies of the Federal government. On the one hand, the Federal Reserve has committed to keeping interest rates low and ease access to credit for businesses and state and local governments. And on the other hand, Congress and the Trump administration have provided roughfully $3 trillion in economic relief through four separate measures since late March. Much of that aid was directed towards business in the form of grants and loans.

Federal legislation also targeted individuals and families, providing $1200 cash relief payments to families, emergency family and medical leave and a $600 per week subsidy to state unemployment benefits. Given that consumer spending accounts for approximately 68% of the total US economy, these measures have helped the country avoid a financial collapse.

Meanwhile, America’s corporate elites are not passing up any opportunity to fatten their wallets, even in the face of the pandemic.

Some companies provided temporary pay increases to their employees and even one-time bonuses. But several, including Amazon, Molson-Coors and Kroger have already withdrawn those raises. Also, a number of companies indicated the desire to hire additional people, but the numbers of jobs added can be calculated in the tens of thousands, while the number of unemployed are in the millions.

 A few corporate CEOs have had their salaries reduced as result of the Covid-19. One in ten members of the Russell 3000, a broad index of listed American companies, has cut the top man’s salary.

But total CEO pay includes things like bonuses and stock awards that typically make up the bulk of what a corporate boss takes home. CGLytics, a compensation analysis firm, claims most reductions were generally only 10 percent or less of 2019 salary. Walt Disney CEO Bob Iger, for example, took a $2 million salary cut, but it just amounted to slightly more than 3 percent of his total compensation in 2019.

An even more egregious example of corporate avarice was the decision this spring of Raytheon Technologies to make an adjustment in the pay package of its head man, Gregory J. Hayes likely to increase his future income by an estimated $12.5 million. At the same time, the company, one of the nation’s biggest defense contractors, was cutting wages for thousands of employees by 10 percent and furloughing a number of its 195,000 employees, including 1,500 in Winston-Salem.

While this scenario is playing out in the US economy, the Congress and the Trump administration are engaged in a heartless and financially ruinous battle over how to extent federal relief. The Democratic-controlled House passed in May a proposed expansion of assistance with a price tag of an estimated $3 trillion. In control of the Senate, Republicans under the leadership of Mitch McConnell, and without any leadership from the president, have elected to drag the legislative process out to the point that millions of Americans may face a dire fall and winter.

Neither side is proposing sufficient money for state and local governments, including the public schools that everyone would like to see opened. Republicans are also insisting on giving a blanket liability waiver to employers with regards to potential exposure of employees and customers to Covid-19. This seems overkill given the conservative judges they have approved during the past three years.    

The big fight appears to be over extending the $600 subsidy to state unemployment benefits. Republicans criticize the $600 as being a disincentive to work because many people have higher income on unemployment insurance than they did in their prior job.

But this ignores three facts: 1) there are three times more unemployed workers than there are job openings; 2) in general, workers prefer a steady job instead of unemployment benefits, but given the spike in coronavirus cases, how likely will opportunities for regular employment return soon; and 3) the return to normalcy in our economy will continue to be hampered by our failure to gain control over the coronavirus.

The irony is that by keeping millions of households financially intact and reducing the negative impact of the coronavirus threat to the overall economy, the original federal aid also shored up the stock market. If the $600 unemployment subsidy is now axed with over 30 million Americans still unemployed, the stock market may finally resemble our economy.

School Openings Require Federal Funds

As the normal time for opening schools approaches, it is becoming increasingly clear the country is not ready. Despite broad recognition of how important it is to get young people back in a learning environment, political leaders have failed to provide the resources for a safe launch.

Most responsible citizens recognize that schools are essential to the wellbeing of our society, not only for education, but also for the socialization that occurs in the school setting. Parents can meet some educational needs and provide a foundation of respect for learning in general, but they cannot cover all subjects, nor replicate the interaction with other students critical to helping young people understand the challenges and values of community.

The shutdown of schools in mid-March brought home to Americans the central role schools play in our daily lives, especially in our working lives. Schools not only educate our children, but they accept responsibility for them while parents work. Parents with minor children comprise almost one-third of the nation’s workforce. Nearly 34 million families have at least one child under 14.

If our economy is to recover anytime soon, it is critical that our schools open. But opening schools without proper safeguards against the coronavirus would be foolish. In recent weeks we have seen the tragic results of trying to open major sectors of our society without sufficient planning and protective measures.

How are school districts responding to this challenge? In general, education experts identify three possible approaches: 1) relying on remote learning and forego opening of schools until the coronavirus is under control and a vaccine is ready; 2) opening schools on a hybrid schedule allowing students to attend in-school classes for a couple of day each week and relying on remote learning the other three, and 3) fully opening schools with as much social distancing as is affordable given existing resources and facilities.

The first approach does nothing to meet the socialization goals of schools and raises serious questions about maintaining continuity in the education process. Professional educators are already concerned about the negative impact of closing schools thus far. In addition, it has become apparent that many youngsters do not have resources necessary for remote learning.

The second approach seems the most popular, but such a halfway measure is not likely to satisfy either the goals of education or of socialization. Also, families are likely to find it severely disruptive. What if multiple children in a family are not scheduled for in-school classes on the same days? What child care arrangements can be made on a three-day week schedule? How do working parents coordinate their job schedules with their children’s class schedules?

All in all, the second approach seems to be a “Hail, Mary” by frustrated school administrators faced with the task of trying to address a need without adequate resources.

The third approach is the only one that meets society’s interests, but there are two caveats: 1) although the threat of the coronavirus cannot be eliminated until there is a vaccine, its spread can be brought under some reasonable degree of control. Several European countries have successfully opened their schools, but only after significantly reducing the spread of the pandemic. At the moment in the US this is not the case, and 2) the states are not in a position to provide the resources and facilities necessary for success.

What is necessary for schools to fully open in a reasonable, safe manner? Given the continuing risks from the coronavirus, social distancing rules must be mandated to protect students, teachers, school nurses, and other essential workers. Masks, space restrictions, modified school buses, frequent testing and contact tracing, access to sanitizing materials, and sufficient quarantine areas all must be in place.

Meeting space restrictions may involve modification of existing facilities or even the acquisition of additional buildings. Most school districts have within their boundaries empty structures that could be converted to meet educational purposes or to expand the availability of child care.

These requirements will necessitate buy ins by parents and students, but they also will cost money. Most states have been struggling with school financing for several years, especially since the Great Recession. A primary source of school funding, the sales tax, has suffered greatly during the pandemic, and state income tax revenue is also likely to fall. State budgets for public schools in 2018 totaled slightly more than $700 billion. Estimates of state shortfalls range from 20 to 30 percent of anticipated revenue.

Only the federal government with the power to run deficits is in a position to provide the states the help they need to open schools safely. The US Congress provided $13.2 billion in emergency aid for public education in the Coronavirus Aid, Relief, and Economic Security Act (CARES) last March, but this is less than a drop in the bucket towards the need. While the Democratic-controlled House passed in May another stimulus bill that includes $350 billion for state and local government, the Republican majority in the Senate does not appear supportive or even agreeable to negotiating a compromise.

Trump has not been helpful. He has encouraged states to reopen without adequate controls and has refused to recognize any federal responsibility for securing necessary PPE resources. Also, he has demanded schools reopen regardless of the status of the pandemic or the availability of the necessary funding for social distancing. If districts fail to comply, Trump has threatened to withhold federal education funds. It is doubtful he has the authority to withhold funds, but Trump’s threat is an obstacle to resolving the problem. His secretary of education, Betsy DeVos, who does not hide her disdain for public education, has indicated a desire to divert federal monies to vouchers that could be used for families to send students to private schools.

The federal government should provide funds for more teachers and other key personnel, such as nurses and counselors, for additional facilities (temporary or otherwise), for other essential support personnel (maintenance, housekeeping, and bus drivers). The Council of Chief State School Officers estimates schools need between $158 billion and $245 billion in additional federal support to cover funding cuts and follow the Center for Disease Control’s coronavirus recommendations for reopening safely in the fall. If federal politicians can figure out how to funnel billions of dollars to lawyers, car dealers, lobbyists and well-funded private schools, surely they can find a way to provide the money needed by public schools for a safe opening.

Preserving a Free Press

Before I entered the academic world, I was a television newsman and editorial writer for a few years at a local station in Florence, SC.  WBTW was an affiliate of Jefferson Standard Broadcasting. While there I learned to value responsible journalism in a society that believes in a free press.

Some news reporters and commentators will claim they are totally unbiased with regard to political viewpoint, but that is implausible. A journalist should be deliberate in reaching any judgment about public policies or candidates, but no one can inform himself adequately to cover an issue or a set of candidates without likely forming a viewpoint. If he is to perform his job as a journalist, he must bend over backward to give some time and space to those policies and candidates he finds less attractive.

Editorial writers have more leeway than reporters because they are recognized as the source of a newspaper’s or broadcaster’s opinion.  An editorial writer should still acknowledge differing viewpoints either through op-ed columns or letters to the editor. At WBTW every time I wrote an editorial I had to invite an outside individual to offer on air a differing opinion or perspective.

Broadcasters at the time, radio and television, had to abide by the “fairness doctrine.” A mandate of the Federal Communication Commission, it required holders of broadcast licenses to present controversial issues of public importance and to do so in an honest, equitable and balanced manner. Each station periodically had to submit evidence it was fulfilling this goal with documented community support.

Unfortunately, the fairness doctrine was repealed during the Ronald Reagan administration. The growing plethora of cable and satellite channels in the 1980s appeared to offer an alternative to the fairness doctrine. In reality, individual channels now are more likely to offer narrow opinions, if any, and discussions of important issues are not approached in a comprehensive and balanced manner.

Newspapers did not have to contend with the fairness doctrine for a couple of reasons. One, most newspapers were locally owned and managed and depended upon local advertisers and there was no license required to operate a newspaper. The threat of potential competition encouraged presentation of a broad array of opinions. Second, most newspapers considered one of their roles to be that of educator, informing the public about the issues of the day. Editors offered their own opinions, but usually printed differing views on an op-ed page or in letters to the editor.  

With this background in mind, let us take note of the current controversy revolving around the op-ed piece by US Senator Tom Cotton that appeared recently in the New York Times.

Exactly how many Americans are aware of Senator Cotton’s essay I do not know, nor how many may have actually read it. But it has caused considerable discussion in the world of journalism about the meaning and function of a free press.

For the benefit of those who do not read the Times or pay excessive attention to political pundits, Cotton, an Arkansas Republican, in a June 3 op-ed called for using US military troops in response to demonstrations like those sparked by the murder of George Floyd.

A graduate of Harvard and Harvard Law School, Cotton served five years in the US Army Infantry between 2005 and 2010, spending time in both Iraq and Afghanistan. 
In 2012, he was elected to the US House representing Arkansas’ 4^th District. After serving one term, Cotton was elected in 2014 to the US Senate. He was 37 years old.

Cotton has been a vocal supporter of Donald Trump and despite his youth and limited experience has been touted as a potential candidate for Director of the CIA and for Secretary of Defense. His views are hawkish on foreign policy, immigration and criminal justice reform. In February 2020, Cotton suggested the coronavirus may have started in a Wuhan, China, lab and spread under suspicious circumstances.

Cotton’s message parroted President Trump’s earlier threat to employ the US military to quell disorder if local law enforcement could not, or would not, act. To justify use of military force, Cotton cited several instances in the past where US military or National Guard units were deployed, including Little Rock in 1957 and Los Angeles in 1992.

He did not mention Kent State in 1970 when National Guard troops killed four students in what had been a peaceful protest.

But it is not the validity of Cotton’s opinion that is at issue. The fallout from the Times’ printing of his op-ed piece is the problem, for it led to the resignation of the editor of the opinion page and raises some disturbing questions about the newspaper’s policy regarding future op-eds.

After Cotton’s essay appeared there was an immediate and hostile reaction from members of the Times news staff.  A twitter assault accused the op-ed editors of publishing a call for violence that included several factual inaccuracies and did not meet the newspaper’s standards. According to a statement from the NewsGuild of New York, a labor union that represents Times’ journalists, “This rhetoric could inspire further use of force at protests---protests many of us and our colleagues are covering in person.”

However, the day Cotton’s op-ed was published was also the day retired Marine General James Mattis blasted President Trump for proposing to use US military troops against protesters. The attack by Mattis has since been echoed by a number of key military leaders, including Colin Powell and former Secretary of Defense Robert Gates. Even members of Trump’s administration have pushed back at his suggestion.

As an elected member of the US Senate, Cotton’s opinion should be of interest to all Americans, even to those, like me, who strongly disagrees with both his thesis about the use of force in response to public protest s and his dismissive treatment of the motives of most protesters. 

Apparently, he is on a fast track to leadership within the Republican Party and has the ear of the current president.

The purpose of a free press is to alert the public to possible threats to our liberty and well-being.  Censoring those perceived as threats could leave us in the dark about potential dangers. It also risks elevating possible tyrants to martyrs. Better to let miscreants do themselves in with their own words.

Is Social Distancing Unconstitutional?

As the nation attempts to move away from “staying-in-place” towards a reopening of various elements of everyday life, there is a lot of discussion about the relationship between the pandemic and the US Constitution. It is not unusual that this should be occurring. Americans are proud of our founding document and reference it often.

The problem is the US Constitution was written over 230 years ago when things were a bit different. That leads often to disputes about the meaning of various clauses and provisions. Especially when disputants have competing axes they wish to grind.

As for me, when I attempt to determine what a particular provision of the US Constitution means, I try to ascertain how it relates to the framers’ purpose when they were creating our federal government. The preamble gives us a useful clue:

“We the people of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

No surprise that “…to form a more perfect Union…” came first. The framers had a number of other objectives: justice, public safety, national defense, economic security, and individual liberty, but they likely understood that accomplishing any and all would require the combined efforts of the approximately four million Americans living at that time. Throughout most of our history union has been the key to our successes as a nation.

With three-hundred-twenty-five million Americans today, continuing to progress towards the goal of “a more perfect Union” is a lot tougher, and our inability to deal with a variety of long term problems reflects this challenge. Still, it is an important goal.

As for our current dilemma, faced with one of our nation’s more serious health threats, most Americans seem to be on board with regards to the need for a common effort, even if it involves significant financial costs and personal inconvenience.  

Some, however, claim the social distancing guidelines imposed or suggested by state and local governments are unconstitutional. Mixed and contradictory messages from the White House regarding the recommendations encourage dissent from the common sense proposals. Fortunately, Congress has been willing to step into the void and provide significant funding to lessen the financial impact of the resulting economic lockdown. But more needs to be done.

Those who assert the social distancing recommendations are unconstitutional seem to suffer from mass paranoia. The guidelines have not been drafted to diminish individual rights, but just as is the case with any threat to domestic order, to national security or to the rights of other individuals, legitimate restraints may be appropriate.  In the current situation, the purpose is to protect our health care system from being overwhelmed by a dangerous virus for which we have no known cure or even treatment.

The speed and extent of the virus has been mindboggling. Unrestrained, it could have swamped our health care system, especially the nation’s hospitals since we maintain, reasonably so, a limited capacity. Even now, there is the possibility of another surge that could leave our health care system unable to respond to other health threats, such as cancer, heart attacks, stroke or flu.

What is the severity of the restrictions? Private businesses, schools and colleges, churches and synagogues, cultural organizations and health care institutions, all have had  their operations shut down, or at least, severely restrained. This is why Congress has sought to mitigate the economic damage suffered by employers and employees.  Allowing society to continue as if the virus did not exist is not a reasonable alternative.

Social distancing does not impose an oppressive burden on the individual. In fact, social distancing, including wearing a mask , is an individual’s obligation to his fellow citizens. It does not interfere with free speech, free press, or religious freedom.  An unrestrained pandemic and death would.

Access to essential human needs have not been shut down. That is why health care facilities remain open, as do grocery stores, the Post Office and other delivery services. All of this is intended to be temporary and it will be if social distancing is practiced by everyone for a reasonable period of time---measured by the course of the virus and by the success of science in developing a cure and improving treatment for those who contract the virus.

President Trump’s cavalier attitude towards social distancing is apparently motivated by a concern that economic sluggishness will torpedo his re-election in November. He has good reason to be concerned. Officially, the US is already in recession. The last president to be re-elected during a recession was Harry Truman.  Too bad Harry is no longer around.

Let's Tone Down the Rhetoric

The rhetoric from Washington about China indicates our relations with that country will be a major topic in the fall presidential election. That is a reasonable expectation. Whether the discussion is based on reason and reality is another matter. 

Americans have long been conflicted towards China. I remember my mother attending meetings of the Lottie Moon Circle at our Baptist church. Lottie Moon had gone to China as a missionary in 1873. Responding to her pleas, women in the Southern Baptist Church began collecting funds to support missionary work in the Far East. The effort apparently continues to this day.

The attitude towards Chinese immigrants was a different story. In 1882, Congress passed the Chinese Exclusion Act, suspending immigration of Chinese workers for ten years. It was the first US legislation placing restrictions on immigration.

Prohibitions against Chinese immigrants continued into World War II. They were repealed in 1943 when China became an ally against Japan. In the aftermath of the war, relations between the US and China became ice cold when the Mao Tse-tung’s communists came to power. Chinese intervention in Korea and support for Ho Chi Minh’s forces in Vietnam intensified the freeze.

In the early 1970s President Richard Nixon initiated contact with Mao in the hope that improving US-China relations might give the US leverage in dealing with the Soviet Union and Vietnam. His gambit was generally successful, but it did not meet with universal acceptance at home.

China began opening up to foreign trade and investments in the late 1970s. It soon became the world’s fastest growing economy, averaging nearly 10% annual GDP growth through 2018. At that time China was the largest merchandise trading partner of the US, its biggest source of imports and third largest export market. China also was the largest foreign holder of US public debt.

American corporations played a major role in China’s growth, outsourced millions of jobs to take advantage of cheap Chinese labor. They also sought access to the Chinese consumer by locating manufacturing and retail activities in China. Despite the negative impact these action had on American workers, the exodus continues to be encouraged by US tax and labor policies.

  

Concern among Americans about the rise of China has been growing for some time. How to deal with the challenge of that country’s rapid economic progress and military modernization while at the same time retaining access for American business to China’s rich markets has been a subject of constant debate during the past three decades of US presidential elections. No administration has been able to develop an acceptable approach that enjoys broad public support.

In his 2016 presidential campaign Donald Trump promised to aggressively confront China, putting an end to trade advantages the latter has achieved through export subsidies, currency manipulation and lax labor and environmental standards. Once in office, the former real estate developer initiated negotiations with the Chinese while threatening a trade war if his demands were not met. This has generated acrimonious debate, but little concrete change.

Part of the problem is that Trump also harshly accused other countries, including some of our most loyal allies, of treating US companies unfairly. Although most European countries are concerned about China’s policies and ambitions, they see Trump’s belligerence as reckless and self-serving. This has been evident in the US failure to convince its European allies to avoid doing business with the Chinese tech giant, Huawei.

The trade and military disputes between the US and China are being complicated further by quarrels related to the coronavirus pandemic. China has not denied the pandemic began in Wuhan, one of its major cities, nor that there was some initial delay in revealing the extent of the health threat.

Trump was also slow to recognize the impending danger and his administration has been unable to respond in a timely manner with a consistent message. In an effort to deflect criticism of his performance, Trump, without evidence, has blamed China for the pandemic, even suggesting the Chinese acted deliberately.

In another defensive reaction, Trump is threatening to withhold funding from the World Health Organization and refuses to join the European-led joint effort for vaccine research. In stark contrast, Chinese President Xi Jinping in a speech to the WHO governing body has pledged to provide $2 billion over two years to support the fight against the pandemic.

Three and a half years of Trump’s inflammatory rhetoric and nativist policies have isolated the US from its traditional allies and has set the stage for an excessively bitter presidential campaign this fall. A contest to see who can bash China with more rancor will not serve the interests of the American people or the world at large.

China’s unfair trade practices must end and reinstating economic security for the average American has to be achieved, but both goals require that the United States maintain civil if not cordial relations with the rest of the world.

Is It Enough?

The extraordinary speed with which the US Congress has acted to address the economic fallout of the coronavirus has been a sight to behold. Usually our national legislature moves with swiftness of a loggerhead turtle stuck in a mountain of mud.

Circumstances certainly call for quick action. The lockdown required to deal with the threat of the coronavirus to public health is having a painful impact on the nation’s economy and psyche. It does not help that many Americans have not yet recovered from the financial trauma of the Great Recession a little more than a decade ago.

Unfortunately, the several federal initiatives pushed through thus far have not provided meaningful relief to those suffering most. The problem is not so much the lack of resources as it is the wrongheaded mindset of the nation’s financial and political leadership.

Trickle-down economics does not work when businesses are flourishing but it is disastrous when businesses are in the tank. And refusing to recognize the limits of the “free” market means ignoring government’s responsibility to protect the interests of all participants in our economy.

So far, the Congress, the Trump administration and the Federal Reserve have authorized an estimated $3 trillion in grants, loans and other forms of assistance to deal with the financial impact of the coronavirus. While the scope of the effort is extensive, much of it is harum scarum and reflects political horse trading more than any clear strategy for rescuing the economy.

Of significance is the fact that most public services in the US are delivered by, or at least through, state and local government entities. The areas include health care, education, public safety, transportation, infrastructure, workforce initiatives, community development, and employment security.  In implementing programs in these areas, state and local governments employ nearly 20 million people, 13 percent of the nation’s workforce.

By comparison, the federal government employs only about 2.8 million people with nearly 600,000 of those in the postal service.

Under normal circumstances aid to state and local government constitutes approximately 17% of federal budget outlays, $750 billion. These dollars represent only about one-third of anticipated budget requirements of America’s state and local governments.

It is not too difficult to imagine the financial chaos that would result if state and local governments should collapse, perhaps even go bankrupt. About 70 percent of state and local revenue comes from sales and income taxes.  Obviously, the shutdown of the economy, especially retail, restaurants and tourism, is knocking a giant hole in state and local tax collections. With wide spread layoffs reflected in 30 million applications for unemployment benefits during the past six weeks, the decline in revenue should easily exceed the 9 percent dip that occurred during the Great Recession.

Those 30 million applications for unemployment benefits are indicative of a major problem the nation faces in trying to address the economic fallout from the coronavirus. Unemployment benefits are delivered at the state level. Each state has general freedom to determine benefit amounts and the criteria for eligibility with limited oversight from the US Department of Labor.

Most states view the system of unemployment benefits as a temporary form of limited assistance for a worker between jobs. No attempt is made to provide replacement income of more than about 40 percent. And there is no consistency among the states. South Carolina, for example, paid in 2019 an average of $228 weekly with a maximum of 20 weeks, while North Carolina paid an average of $265 weekly with a maximum of 12 weeks.

Nationwide, in 2019 unemployment benefits averaged $385 weekly and most other states paid a maximum of 26 weeks.

Congress attempted to resolve some of the shortcomings of the system by providing funding for up to 39 weeks of benefits in every state and through July an additional $600 weekly on top of the benefit paid by each state. Thus, a recipient in North Carolina will likely have a weekly unemployment benefit $40 higher than a South Carolina recipient.

Of course, both US senators from South Carolina voted against the CARES Act (the Coronavirus Aid, Relief and Economic Security Act) because of the $600 bonus. Apparently not because it seems unfair to workers in South Carolina, but because nurses and other essential workers will likely refuse to return to work because of the generous unemployment benefits.     

According to the Charleston Post and Courier both senators were in attendance April 29, at a meeting with Columbia business leaders when in reference to the $600 bonus Senator Lindsey Graham declared, “I promise you over our dead bodies will this get reauthorized.”

Senator Tim Scott added, "The unemployment benefit is wreaking havoc and will continue to wreak havoc until it's over,"

Neither provided any evidence that South Carolina nurses or other essential workers were refusing to work for any reason.

The unemployment benefits system is a poor choice for trying to deal with our economic calamity. It is actually not a single system, but a clumsy and convoluted collection of systems not meant to address long term problems. Across the board direct payments to all citizens with reasonable income limits is a better way to distribute assistance fairly and quickly. The CARES Act did provide a single $1200 payment per adult and $500 per child, but this type of assistance should be available on a regular basis when the economy is suffering.

In another half-hearted effort at easing the anxiety and probable pain of American workers, the CARES Act raised the federal share of Medicare spending by 6.2 percent, an estimated $35 billion. A recent study by the Center for American Progress indicates that for every one percent increase in unemployment in a state Medicaid costs rise by roughly $2.7 billion per year. On this basis, if unemployment rises as high as 20 percent, it could cost states a combined $45 billion.

But given our employer-based healthcare system, inadequate Medicaid funding is not the only problem. The 30 million applications already submitted for unemployment benefits likely means many working Americans will soon be without access to healthcare. Not a good development when the country is trying to deal with a pandemic.

At a minimum Congress should make anyone receiving unemployment benefits eligible for Medicaid. Better yet would be a serious effort to implement some form of universal healthcare access divorced from one’s employment. The time has come to provide a genuine economic safety net for all Americans.