Relief!

Mitch McConnell always sounds like he's grumbling, so it's hard to say just how he feels about the largest welfare program in American history.  Apparently, though, he agrees that it's necessary.  Now that McConnell has broken the ice, only a few stubborn holdouts still say "stimulus" — the word du jour is "relief."  Add the restraints on the Administration's ability to dole out corporate loans, and restraints on how that loan money can be used, and the overall tone of the bill is classic Welfare State Democratic.

Progressive Democrats wanted more, of course, but Pelosi is offering some proposals for "phase four" that might offer them more satisfaction.  If, somehow, science turns out to be right and Tr*mp turns out to be wrong (imagine that!), "phase four" will be along in short order.

How will the USofA pay for the bills it's running up at the moment?  Essentially, it won't.  The Fed is gearing up to increase the money supply with extensive, near-zero interest loans to the Treasury. It will be inflationary, but that makes the biggest losers the ones with the most money.  The Fed hasn't met its inflation target since the Great Recession, so you could say there's some catching-up to do.

By the way, I really like the idea of some workers collecting more in unemployment insurance than they earned in salary: clearly, they're people who weren't making nearly enough money to begin with.

Stimulus?

You can almost read the thought balloon: "People like money, so if I give them money they'll like me – and I'll be reelected!"  Toss in some corporate giveaways — the standard Republican solution to every problem — and you have the Administration's plan to "stimulate the economy."  Economic stimulus helps in a typical recession, but the current crisis is far from typical.  It's hard to go out and spend money when you're barricaded at home, and when the places you might spend it are closed.

Democrats, of course, have no aversion to giving away free money, but hope to put some limitation on how corporations can use essentially interest-free loans, hoping to avoid some of the abuses we saw in the 2008 economic crisis: using government funds for stock buybacks and absurd levels of executive compensation.  By the time you read this, there's likely to have been some sort of "compromise" negotiated.

The current plan to pay $1200 to 85% of the American people, and a bit less to another 5%.  The "stimulus" effect would be negligible.   To many higher earners, $1200 will be just a blip in the bank balance; and with so few places to spend it, most of the "stimulus" wouldn't make it into the broader economy until the pandemic is over.  For the unemployed, $1200 won't cover a month's rent.

Proposals coming out of the House, though, seem to recognize that what America needs now isn't stimulus, but relief — money individuals and small businesses need to survive the crisis.  Needless to say, there will be plenty of resistance to new "entitlements," but if you're going to give people money, it makes sense to give it to those who need it most.

Time to Panic?

 

Maybe.  Fresh from arresting an uncle and a cousin on charges of plotting a coup, MBS roiled oil markets by launching a price war against Russia, exacerbating instability in a world economy already teetering from the impact of COVID-19.  Investment houses think recession is likely.

The manufacturing sector already is in recession from Tr*mp's trade war, global supply chains are a mess, and a virus is not especially susceptible to economic interventions.  However much money is pumped into the economy, it doesn't do much good if people won't go out and spend it: so whatever fiscal stimulus Congress comes up with probably won't make much difference.  The Fed will cut rates again, but interest rates already are so low that a further cut can't have significant impact.  The truth is that firms already have plenty of cash-on-hand were they interested in expansion — but who's interested in expansion while there's a pandemic going on?

I suspect the coronavirus may have done some good for "Grandpa Joe" in yesterday's primary contests: weird "Uncle Bernie" seems far too angry to offer much comfort and reassurance.  If the viral threat persists, of course, "Mean Boy Donald" fares even worse.

Catch-up

Our President's "deal of the century," the proposed "peace agreement" that would formalize Israel's currently de facto apartheid state, failed to deliver Israel's Parliament to his buddy Bibi; and may have helped the Arab-led Joint List win two additional seats.  Since the main disagreement between Bibi's Likud and Benny Gantz's Blue and White Party is over whether or not Bibi goes to jail, parliamentary paralysis may have been the best possible outcome at this point.

Meanwhile, in the USofA, the Democratic establishment has solidified around Joe Biden.  The push was especially evident on MSNBC, where invited guests heavily favored Biden over Sanders.  Chris Matthews may  have gone a bit overboard, though: he's losing his prime-time slot, possibly in response to complaints from MSNBC's more progressive viewers.

I still have serious doubts about Biden's "electability."  While the media tout his "improved" debate performances, he still has problems remembering his talking points, much less thinking on his feet.  I can't help thinking that his staffers are praying that ARVID-19 will damage Tr*mp enough to compensate for their candidate's many weaknesses.  Some think tank, somewhere, has to be calculating how many Americans have to die to ensure a Biden victory.

Also, although we haven't heard much about Burisma lately, it's coming.  By hook or by crook (mostly the latter), Tr*mp can count on Dan Barr to deliver in time for the presidential campaign

Rare as it may be, I feel some sympathy for Erdogan's efforts to keep another million Syrian refugees out of Turkey, which already is overburdened – and equivalent sympathy for the government of Greece, left to muddle through the refugee crisis with no real EU support.  At the same time, I understand that admitting more refugees can only further empower AfD, National Front, and other far-right parties.

Putin is having a very good week.