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During the Great Recession, with the economy in free fall, Congress rushed to pass the largest bailout and stimulus measures in American history. Those decisions helped stabilize the American economy but shook up the political landscape, birthing the conservative Tea Party movement and revitalizing progressive politics.
The $2 trillion economic stabilization package expected to be finalized this week makes the $700 billion Wall Street bailout in 2008 and the $800 billion stimulus bill in 2009 look like pocket change.
Like the Great Recession, this current national crisis could have political implications that reverberate far longer than the public health and economic impacts. Activists on both the right and the left say this mind-boggling amount of government spending could rewire our politics, perhaps in extraordinary ways.
“This crisis is exposing a lot of problems and vulnerabilities and injustices,” said Sarah Miller, head of the American Economic Liberties Project, a new organization dedicated to pushing government to confront corporate power. “Now, this bill is really laying them out into the sunshine for the public.”
For critics of the legislation, the devil is in the details. Sure, the bill includes something for everyone: loans and grants for corporations and small businesses, increased unemployment benefits for workers who are laid off or working fewer hours, and direct payments of $1,200 per adult and $500 per child for low- and middle-income individuals and families.
But the biggest portion of spending — more than $500 billion — goes to large corporations and industries. Provisions include $32 billion for the airline industry, $17 billion for “businesses critical to maintaining national security”— a category seen as intended at least partly for Boeing — and a tweak to federal tax law sought by restaurants and retailers that could save their industries $15 billion a year.
Some companies owned by the family of President Trump’s son-in-law and White House adviser, Jared Kushner, could benefit. And despite Democratic efforts, Mr. Trump’s companies would not be prohibited from benefiting from some elements of the bill.
And that may be only the first round of spending.
“Everything about this is deeply concerning,” said Jenny Beth Martin, a co-founder of one of the first Tea Party organizations, the Tea Party Patriots. “There are going to be so many unintended consequences from the month of March 2020. It will be years before we sort out what just happened.”
Yet, for Tea Party supporters like Ms. Martin, the situation is complicated. For years, they excoriated big government, helping to elect a new class of lawmakers determined to slash spending.
That is, until Mr. Trump took office.
Mr. Trump’s incoming chief of staff, Mark Meadows, and his departing acting chief of staff, Mick Mulvaney, both tied their congressional careers to the Tea Party movement. Now, Mr. Mulvaney, Mr. Meadows and other Tea Party politicians are top supporters of the administration — and of the record-breaking level of spending pushed by the White House, even before the coronavirus crisis.
All have been cautious not to use the B-word (bailout) or even the S-word (stimulus) when it comes to describing the economic stabilization package.
Tim Phillips, president of Americans for Prosperity, a group that helped fund and organize Tea Party activists, drew a firm distinction between the 2008 bailout and today’s package.
“This is very different than in 2008-2009, which was an abject cronyistic bailout,” said Mr. Phillips, who said he had discussed the package on town-hall-style events conducted via telephone with thousands of his group’s supporters. “The American public gets that this is a very different situation. It affects almost everyone.”
That position may be hard to maintain if the money becomes, as critics fear, a “slush fund” for big corporations. Senate Democrats successfully maneuvered to include more oversight and transparency in the legislation, but how the Treasury Department handles the distribution of the funds will be closely watched, particularly as average Americans struggle to survive the crisis.
During the previous administration, the Wall Street bailout came to be associated with President Barack Obama even though it was passed under his predecessor. Some liberal activists unhappy with the program were reluctant to drive their economic message against a president popular with progressives.
They will face no such hesitation this time around, with Mr. Trump’s administration providing an easy foil and prominent leaders of the movement — like Representative Alexandria Ocasio-Cortez of New York — already making their case.
“We see this giant slush fund that Steven Mnuchin has a lot of authority over with limited strings attached,” Ms. Miller said, referring to the Treasury secretary. “This was a bill that fundamentally restructures our economy, and while it does provide some critical help, it also is going to exacerbate these massive imbalances of economic power.”
Coronavirus ad wars continue
By Nick Corasaniti
Super PACs supporting Democrats have clearly struck a nerve with their ads on the Trump administration’s response to the coronavirus.
In Tuesday’s newsletter, we took a look at the roughly $12 million being spent by Democratic outside groups attacking President Trump for his comments this year playing down the severity of the coronavirus outbreak. One particularly stark ad came from Priorities USA, a major Democratic super PAC, showing the exponential curve of coronavirus cases trending upward as Mr. Trump’s voice is heard saying that “this is their new hoax” and that “we have it totally under control.”
On Wednesday, the Trump campaign sent a cease-and-desist letter to television stations across the country, telling them to stop airing the ad from Priorities USA because it contained false representations of Mr. Trump’s remarks, particularly the word “hoax.” The president and his supporters have said that he was referring to Democrats’ criticism of his response to the virus, not to the virus itself.
In response, officials at Priorities USA announced today that they were expanding their ad buy, effectively thumbing their noses at the Trump campaign by spending $600,000 to air the ad in Arizona. The group previously announced it would spend $6 million to run the ad in Pennsylvania, Michigan, Wisconsin and Florida.
“The fact that Trump is going to such great lengths to keep the American people from hearing his own words adds to the urgency of communicating them far and wide,” said Guy Cecil, the chairman of Priorities USA, in a statement announcing the new ad buy in Arizona. “Trump doesn’t want voters to know the truth. We will not be intimidated.”
The “hoax” remark, which was also featured in an ad by Unite the Country, a super PAC supporting Joe Biden, led Fox News to decline to air it, as we reported in yesterday’s newsletter.
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In my house, I’m suddenly an elementary schoolteacher, a chef and a sanitization specialist. (P.S.: I’m not great at any of it.)
How has the virus changed the dynamics in your family life? Is Dad taking charge of bath time, after years of declining to take the lead? Is all the distance learning falling to Mom — and she’s getting awfully tired of it?
Tell us your stories at [email protected]. Don’t forget to include your name and location. We can’t wait to hear from you!
Need inspiration? One of our colleagues interviewed Shiri Kenigsberg Levi, the Israeli mother whose rant over distance learning went viral.
From Opinion: Debating the coronavirus response
The $2 trillion economic stabilization package is intended to mitigate the economic consequences of shutting down the economy. As Times columnist Bret Stephens told Gail Collins in The Conversation, a huge government intervention is what’s needed now.
“The biggest challenge right now is to keep people and businesses liquid, lest they go bankrupt,” Stephens said. “Millions of people are being shut out from their jobs. Businesses across the country are being shut out from their customers. All through no fault of their own, and all on account of government orders. So there’s a moral obligation as well as an economic necessity.”
But President Trump is seeking an early return to business as usual to jolt an economic recovery. The Editorial Board argues that, “as the president’s own health advisers warn, the worst of the coronavirus pandemic is yet to come,” and that “it’s time for a national lockdown.” In other words, easing restrictions now would cost lives for the sake of potential economic gain. This trade-off, though, may not be quite what it seems.
Times columnist Jamelle Bouie says that the Trump administration has convinced itself “that an extended lockdown is more harmful than anything the virus can do.” Bouie concludes: “Trump will sacrifice Americans to coronavirus if it will save the market and his prospects for re-election.”
— Adam Rubenstein
Donuts Delite, in Rochester, N.Y., is selling out of doughnuts featuring the likeness of Dr. Anthony Fauci. The Democrat & Chronicle reports:
Decorating the specialty treats involves printing an image of 79-year-old Fauci on wafer-thin edible paper and placing the paper on top of a thick layer of buttercream frosting. Fauci’s image is then encircled with piped frosting decorated with red, white and blue sprinkles.
My question: Does the shop deliver? Clearly, this is a crisis that calls for C.D.C. intervention … and some serious carbs.
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