Washington Going Full Andrew Mellon as Stimulus Talks Drag, Inadequate Support Guaranteed

Herbert Hoover’s Treasury Secretary Andrew Mellon1 at least had an excuse: he was a staunch believer in a disastrously bad idea. The Republican and Democratic party leaders who are failing to prevent the US economy from continuing to careen down a steep hill via dithering with inadequate stimulus schemes, won’t be able to excuse themselves as misguided ideologues. They are too small minded for that. They are simply clientelists, captured by elite factions that lack the imagination to see that the US is approaching a corruption end state, and that having America continue to decline will result in an acceleration of our post-Soviet style plutocratic land grab. It will produce only a comparatively small number of winners, and most of the top 10%, and even quite a few current billionaires, won’t be among them.

The stimulus deal talks are so not-going-anywhere-quickly that there are no updates on the front pages the Wall Street Journal or the Financial Times; Bloomberg does have one over the fold (Senators Look to Break Deadlock with Small Business Proposals) but in small, non-bold type, making it easy to miss.

Remember that the $600 a week unemployment supplement expired as of July 25 (except in New York, its drop dead date was one day later). Remember that even in the best-case scenario that the parties get to a deal this week, the votes won’t take place until next week. So any new supplement payment won’t come any time soon:

And remember the reason the Republicans went for the unemployment supplement was that they worked out it would get money into citizens’ hands faster than those $1200 per person stipends.

It was also interesting that our readers’ collective take yesterday on the state of small business America was cheerier than the data says, perhaps because many of the businesses still operating, particularly restaurants, have greatly cut headcount:

There’s no strong reason to think this plateau will hold. Some small businesses did have a strong rebound after the lockdowns were lifted, such as dentists. But as we’ve pointed out, some owners of enterprises that received PPP loans expect to lower headcount once their obligations expire. Both Bloomberg and the Journal have stories on the continuing decline of department stores, and some small businesses did break into the bigger leagues by landing boutique and bigger retailers as customers. A smaller second round of stimulus, which looks baked in, will further damage businesses that are on the wrong side of Covid-19 risk.

And that’s before factoring in the real economy effects of rising infections. It’s up in the air as to how many public schools will reopen, but in anywhere other than locations where infection rates are low, that looks to be a prescription for a spike in new cases a few weeks later. Many colleges and universities are having students back on campus, which even if the numbers are much lower than the old normal, are disease futures. So current trajectories favor more lockdowns and/or fear-induced self-imposed restrictions, particularly if there is more evidence of lasting Covid damage even in

The Hill’s evening update describes how the stimulus talks got nowhere over the past week, and finally showed some movement on Tuesday. While some key players are making optimistic noises, the two sides are still far apart on their big bones of contention: the amount of the unemployment payment supplement, funding for state and local governments, and funding the Post Office. Let us not forget that as of June, state and local governments had reduced headcount by 1.5 million, but those were (so far) mainly temporary layoffs. This section of the story gives the very strong impression the two camps are miles apart:

Schumer said they are still “far away on a lot of the important issues” and have a “fundamental disagreement” on the scope and depth of agreement. Pelosi indicated during an interview with PBS that Democrats were sticking by the $600 weekly federal unemployment payment [versus the Republicans’ $200], saying that “there’s no in between.”

And negotiators haven’t yet agreed on a top-line spending figure for the overall package. Pelosi told CNN that she would accept $3.4 trillion — the amount of the bill House Democrats passed in May.

Mnuchin rejected that amount.

“Let me be clear: We’re not going anything close to $3.4 trillion,” Mnuchin said. “That’s just ridiculous.”

Politico’s story adds that McConnell is keeping the Senate in session until there is a deal, which is making Republicans facing tough races unhappy by keeping them off the trail. And they are apparently also worried because opponents are running ads attacking them over the lapse in the unemployment supplement and the eviction moratorium. It also describes how Republican fiscal hawks are sniping at fellow party members who are more amenable to spending, accusing them of depressing turnout in November from the party faithful. Predictably, each party is trying to blame the impasse on the other guy.

Trump has stated he’d use an executive order to extend the eviction moratorium if Congress didn’t get that done soon. If he’s serious about that idea, he probably needs to move by early next week at the latest, if nothing else to lower anxiety levels among those at risk. But while these moratoriums buy the stressed some breathing space, I don’t see what the endgame is for tenants that either make no or very low payments. Some landlords will evict when the moratoriums are up on general principle. Some will be foreclosed upon because they needed the rent to pay their mortgages and property tax payments. And governments can’t order landlords to accept lower rent payments; that’s amounts to a taking and would require the governmental body to compensate the owner.

In other words, approaches like eviction freezes are mere “kick the can” strategies. But Covid-19 isn’t just a demand shock; the disease is forcing a wide-ranging restructuring of the economy. And even though there is a tremendous amount of work that could be done in place of the lost jobs, from planting trees to elder services to dealing with deferred infrastructure maintenance, no one seems to be discussing the fundamental problem, let alone developing concrete plans about how to respond. The display of the loss of institutional competence, the official responses that amount to rearranging deck chairs on the Titanic, show that decades of overcompensating rentiers and symbol manipulators are coming home to roost.

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1 Mellon who was also Treasury Secretary under Harding and Coolidge, left that office after Congress threatened to impeach him, and is infamous for the recommendation that Hoover attributed to him:

Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. Purge the rottenness out of the system. High costs of living and high living will come down. … enterprising people will pick up the wrecks from less competent people.

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91 comments

  1. Bob Hertz

    The Republicans who oppose a large stimulus have invoked the principle that ‘deficits matter.’

    This might be more defensible if they had respected the same principle during the 2017 corporate tax cut and during military spending.

    When money is going to workers, that seems to be when deficits actually matter to them.

    Reply
    1. DS

      No one in a position of power in America has any principles whatsoever.

      The Republicans are just negotiating, and make no mistake, they are world-class negotiators.

      The second they know that the Democrats want something–anything–they automatically oppose it until they get something bigger that they want in return.

      In the meantime, they deploy a focus group-tested narrative to the press (e.g. larger UI checks discourage the unemployed from returning to work). The popular press subsequently publishes or broadcasts it blindly and then commentators like Yves and many others spend weeks refuting it, by which time the message has stuck, and the Republicans gain even more leverage through popular opinion.

      Reply
    2. ex-PFC Chuck

      And it might have been indefensible if the Democratic establishment had bought into MMT and made a concerted effort to sell it to voters. But they didn’t and probably can’t without losing their grip on the Wall Street teat. So here we are.

      Reply
  2. vlade

    elder services may not be the best covid job, given the experience you had.

    IMO, to be done well, it’s a nursing-level skill type of a job, and more so now. In my experience, similar to childminding jobs, everyone says they can do it, but what they really mean is that they can do it unless something goes wrong. Speaking as someone who was trying to get a nurse to care for my post-heart-surgery father few years back.

    Reply
    1. Yves Smith Post author

      There are lots of elder services that do not involve in home care. Driving them around is one. Running errands for them is another. Preparing and dropping off food and chatting with them a bit is a third (see New York’s CityMeals on Wheels, which provides food to house-bound elderly people). In Italy, one town I visited briefly has an elder center, a place that was open all day into the early evening, with comfy chairs, the TV on, a collection of current magazines and the day’s papers, board games, cards, and non-alcoholic drinks and light munchies. I didn’t see how enfeebled the visitors were but I could see it being very helpful to families who mainly had grandma or grandpa at home to be able to leave them there a few hours a day to get a break as well as allow their older relative a change of venue and maybe a chance to make new friends, if nothing else with the attendants.

      Reply
      1. vlade

        I see.

        I considered most of what you describe as already-provided, because in the in the town I live in it is. During the CV lockdown townhall here even provided a call-to-chat line for elderly (althought I think that was staffed by volunteers but could be the local nursing home – which is owned and operated by the townhall and runs the services you described), but of course you’re tallking the US.

        How easily we take things for granted.

        Reply
        1. WhoaMolly

          I was shaking my head as I read Vlade’s reply thinking “What world does this person live in!”

          Only at the end of the reply did I realize vlade does not live in the US. The world vlade is describing is literally beyond imagining in the US.

          See: Chris Arnade’s book Dignity.

          Reply
  3. ambrit

    This is a masive failure of imagination on the part of the ruling elites. I have read commenters state that the PMC doesn’t worry about the “lower classes” because they do not have to see them, except perhaps at street corners begging. Now, beggars can be ignored or patronized on the cheap. Not so with robbers and thieves.
    The new army of poor and homeless will have strong memories of “better times” and the ability to see the remaining PMCs as “the undeserving rich.” Not the billionaires, who the “lower classes never see in the flesh,” but the billionaire’s enablers, the ten percent and PMCs. There, at the interface, is where the real trouble will start. An angry mob might not have the proper tools to shoot down a corporate jet, but they certainly are capable of overturning and setting alight the high end automobiles of the PMCs, probably with said PMCs still inside. Remember the Rodney King riots in Los Angeles back in 1992? That was a piece of cake compared to what is coming. One reason for that is that there will be a lot more discontented people to fuel the rioting this time around. How many million people will be homeless by next spring? There’s your riot tinder.
    Making comparisons between revolutionary periods is a fraught exercise, but this latest round of Governmental Snafus is looking very much like pre-revolutionary France, say 1787.
    Doesn’t anyone in Washington read history any more?
    Santayana’s quip is literally coming true.

    Reply
    1. ChrisFromGeorgia

      Well, when have they ever shown imagination, except when it comes to bailouts of themselves?

      The supplemental UE checks are really more of a bailout of landlords and mortgage holders than real assistance to the unemployed. Cram-downs, haircuts and rent reductions that are permanent would be a much better solution, but of course we can’t have that because it would mean Wall St. would have to share in the suffering.

      Reply
    2. TMoney

      I think I’ve wanted to write this idea down for a while. I wouldn’t have done it so well.

      What bothers me is the number of us who seem to be looking at the event horizon with dread, waiting for the light of an oncoming train.

      Phone your Congress critters. Keep the pressure on them. Remind them that there a lot of us riff-raff types who are rather upset by our future prospects. It might be a big club and I might not be in it, but if I’m hungry enough I’ll be forcing my way in to eat. Might even stay for dessert too.

      Reply
      1. Henry Moon Pie

        “supplemental UE checks are really more of a bailout of landlords and mortgage holders than real assistance to the unemployed”

        Everything done so far by the federal government–both parties–is a desperate attempt to keep the current chains of control in place. The busboy reports to the assistant manager who reports to the manager who reports to the owner who reports to the local banker who reports to bigshot banker who reports to the billionaires. More or less. So if a majority of restaurants and bars (the lynchpins of capitalism, so it seems) goes under, that entire chain of control disappears.

        And our elites are very anxious to keep that from happening on a large scale, and they’ve already spent a lot of money trying to avoid it, but failures are increasing in frequency and cascading. Kicking the can down the road won’t do it this time.

        Reply
      2. L

        And I will add to that, be prepared for some odd conversations when you do. When I called my local House Rep (D) a few weeks ago I had to spend much of the call patiently explaining to the nice kid on the other end of the line that as a member of congress he does have a vote, and telling him about the state of play. My calls to my US Senators (both R) were odder. In one case, the one up for reelection, I was redirected to voicemail as soon as it was clear I had a comment (“so it can be passed along”). Apparently listening to constituents isn’t his thing.

        But the winner was the other. I called his local office (the DC was shut) and had a nice long conversation with a very nice woman who patiently explained to me that she had had a very nice meeting with some very nice people from the Chamber of Commerce, who explained that testing was great, everyone could get a test, and that there were no problems. Also that the economy was doing good. If anything she was more out of touch than Trump himself. She was very nice in taking my comments and did seem inclined to listen but I found that I had to be very polite when piercing her happy bubble.

        So yes, keep up the pressure, but don’t be shocked when you call your “representatives” and reach Neverland instead.

        Reply
        1. sierra7

          Will the playing in the background of the “1812” Overture help????
          We are approaching revolutionary times………..
          Most of the professional politicians haven’t a clue!!!!
          Time for Guy Fawkes!!

          Reply
    3. EGrise

      That seems like another aspect of the lack of imagination: the elites think the world will go on as before, no matter what they do to it.

      Or perhaps they believe that they have enough cops and guns and drones to handle an uprising? There’s that lack of imagination again.

      Reply
      1. EGrise

        Or, come to think of it, that there aren’t some truly ambitious and scary people watching this whole situation and figuring out how to use it to their advantage, and at the expense of some/all of the elites.

        Yep, can’t imagine that happening, can they?

        Reply
      2. Fritzi

        Historically speaking most uprisings ARE crushed.

        Most of the time the little people grow sick of getting slaughtered long before the Power Elite and military are sick of slaughtering them.

        And if you stop pulling their punches and get serious with the slaughter, it’s usually quite doable to terrorize the populace into being submissive for the next couple decades.

        The people seriously willing to fight to the bitter end against a scarily powerful, relentless, merciless enemy are always a tiny minority.

        Most will submitt rather quickly.

        There are surely plenty of ambitious and scary people inside the National Security apparatus that are itching to see things escalate so they are “justified” in dropping all pretenses and bringing the hammer down hard on the unwashed.

        Members of the ruling class that are tired of having to pretend at least for still too much of their valuable time that they are not in fact a ruling class?

        Reply
        1. EGrise

          Very true. I agree that a genuine uprising would likely be crushed.

          But there’s no reason why the nation couldn’t then sink into Northern Ireland-style long-term simmering violence that costs cops and citizens alike, degrades the economy and upends society worse than Covid-19. Talk about killing the goose that laid the golden egg.

          That’s the sort of imagination I’m talking about.

          Reply
          1. ambrit

            Endemic civil unrest would indeed be another sort of Dreaded Pathogen, a pathogen arising from society and it’s discontents.
            Today’s Democrat Party has forgotten that the New Deal saved Capitalism from itself. That’s the reason why FDR is remembered fondly by centrists. He deftly avoided a tilt to either extreme politically in America. That is what I meant by asking the rhetorical question if anyone in Washington today read history.
            When you’ve got nothing to lose…..

            Reply
        2. ambrit

          One counter to your accurate observation is that America has become a militarized society. There are a lot of “gunned up” vets out there. Not all, if indeed most are right wing nutters either. My template here is the post WW-1 Germany and especially Bavaria. There was a shooting civil war going on from 1918 to roughly 1920. Both sides had demobilized war veterans as troops. At root, both sides were being manned by revolutionaries. The eventual winners were succeeded by right wing revolutionaries. The other side was mainly a part of Internationalist Communism.
          See: https://en.wikipedia.org/wiki/German_Revolution_of_1918%E2%80%931919
          Also: https://en.wikipedia.org/wiki/Spartacist_uprising
          Plus: https://en.wikipedia.org/wiki/Bavarian_Soviet_Republic
          The above may have been short lived and birthed and died in conflict, but they paved the way for the later Authoritarian Regime. Now, some may argue that America is exceptional, and thus an American Authoritarian State will last for a thousand years, but history says otherwise.
          The basic fact is that America is just one, a big one, but not the only big one, of a congeries of states in the world. Coalitions are always possible to curb the excesses of any self conceived Exceptional State. Think of the downfalls of Napoleonic France, the Third Reich, or the Empire of Japan.
          History is most certainly not over.

          Reply
        3. Jeremy Grimm

          I am not sure what you mean by an uprising. A direct confrontation head-to-head with police or the military would be plain stupid. But thirty years of foreign wars have taught how police and military have been unable to overcome an enemy that attacks but refuses to stand and fight. Your National Security psychopaths might run wild attacking imagined targets and damaging those who let them off their chain.

          The US is wide-open to a variety of asymmetric attacks on the numerous extremely long and fragile supply-lines. The police and military are the dogs that protect the real targets. Only fools kick attack dogs. Hurt BigMoney by cutting holes in their money bags.

          Reply
    4. Fritzi

      They calculate on having better weapons this time.

      And better surveilance of course.

      They want the war because they are certain that they will win.

      Reply
      1. ambrit

        Hubris writ large.
        One thing that would sting is for those wily Russkies to look at each other some afternoon around the conference table in the Ministry of Foreign Affairs and say; “Well, those American reactionaries have been baselessly accusing us of meddling in their internal affairs for some years now. I, for one, am tired of this. Let us give the Americans something to really worry about. Are we agreed? We start broadcasting Radio Free America next weekend. All in favour? Good! Unanimous!”

        Reply
    5. Hepativore

      The problem is that our government has weapons and means of control that 18th century countries did not. Past presidents such as W. Bush, Obama, and today’s Trump have shown that they are more than willing to ignore the Posse Comitatus act. In addition to sending in soldiers on domestic soil, how long do you think it will be before the financial elites and the PMC champion drone raids to quell rioters? The drones could be armed with tear gas or even bombs. Deploy a few of them in poor neighborhoods when things start getting heated, I am sure that the elites would be able to demoralize people pretty quickly.

      The fact of the matter is that after decades of building the US military into the massive behemoth that it is now, I do not think that the people in charge would hesitate to turn it on the populace at large should we get some sort of large-scale uprising. You might have some soldiers that would bristle at the idea here and there but I am not sure that there would be enough of them. Plus, for every reluctant soldier there is probably a drone to replace them with.

      Reply
  4. Eureka Springs

    Mnuchin rejected that amount

    Why is this up to Mnuchin? Is it not congress who will direct Treasury on these matters?

    We would be so much better off at least more of the time if all these people/positions were selected like jurists and people like Mn were jailed, thus ineligible for even jury duty, for their past looting rather than promoted.

    Reply
  5. dcblogger

    suppose the current crisis does not result in the further consolidation of power by the .001%? suppose it results in a full scale implosion? suppose coronavirus is to American capitalism what WWI was to royal autocracy?

    Reply
    1. Amfortas the hippie

      if that, then it will be extremely ugly.
      but i really haven’t been able to find a path towards a better way through the usual channels.
      all those roads were closed or barricaded or just plain ripped out and made into walls around the aristocracy.
      This is unfortunate in the extreme.
      add in the 40 year mindf&%k and siloing and i expect the worst.
      Machine put all it’s chips on TINA and sowing enough confusion that maybe everyone would be too distracted to notice. This, apparently, included a rather large assumption that the System would continue to function more or less within acceptable parameters.
      The ones spraying that ether got inadvertently high, themselves.
      Hubris, meet Nemesis.
      we will pay the price, of course.

      and…as my brother indicated when he came up to mourn our dad, most people in this country, proportional to their level of comfort, pre-pandemic, are not at all prepared for hardship on this scale.
      Not only is the sense of entitlement overlarge, but there’s a lack of Phronesis(https://en.wikipedia.org/wiki/Phronesis)….again, proportional to one’s level of comfort, ere the start of this.
      Barring Beirut in the 80’s style craziness, I can foresee a growth industry for the rural poor…similar to ex cons teaching convicted rich folks how to withstand the vicissitudes of prison.

      Reply
      1. dcblogger

        I want a 1917 style revolution as much as I want to be hit with the eye wall of a category 5 hurricane. but for reasons best known to themselves, our elites are destabilizing our entire society. millions of Americans are at risk of homelessness, many formerly prosperous people. already there are hundreds of anti eviction movements springing up, that will only multiply. the elites do not have the judicial or police capacity to forcefully evict everyone at risk. add to that the very real possibility that by October we will be burying millions of school children and adding grieving parents to the mix and I do not see how the country will be governable.

        Reply
        1. Dan

          …add to that the very real possibility that by October we will be burying millions of school children

          This is an asinine statement. And I say that as one who takes Covid seriously.

          Reply
            1. Jessica

              As far as I know, there is nowhere on the planet where large numbers of school-age children have died. The problem with re-opening schools is the number of parents and especially grandparents as well as school staff that asymptomatic school-age children could infect.

              Reply
            1. juno mas

              Well, it was pure speculation. And, like many of the statements made by Trump, will get you a “Harrumph”— and ignored.

              Reply
        2. Amfortas the hippie

          yeah.
          its really harshing my mellow as well.
          ever since i finally obtained a copy of Limits to Growth, ten or so years ago…after knowing pretty much what it said decades before…i’ve often thought what a great tragedy it is that we, as a society, never even tried to have a rational, compassionate decline…balls to the wall! from on high…lapped up by all and sundry below…we walked right into the neoliberal nightmare.
          the head honchos pooh poohed the very idea of Limits, and cajoled and coerced and forced and fed and shamed the rest of us to get on board the krishna wagon barrelling down the hill.
          May we at the very least endeavor to learn something from it.
          Empire and the delusions that enable it was never gonna undo itself.

          Reply
          1. drumlin woodchuckles

            Did you personally get on the krishna wagon your own self?

            No?

            Well, do you think there might be other people who did not get on the krishna wagon
            their own selves? I think there might be. You and they and we ( if any) should all find eachother if we can and keep modelling a life lived on foot.

            Taking up the Protestant Guilt Burden for things you are not personally guilty of will not help you or anyone else who is also on foot. Some krishna wagon riders may be thrown off the wagon before it crashes. They may then decide to learn how to live on foot . . . if they see people successfully living on foot.

            Reply
            1. Amfortas the hippie

              aye. I’ve been something of a museum Fremen for a long while, now,lol.
              saying “here’s a different way to do this” by action and initiative(like the working composting toilet that uses zero water, feeds the pasture/orchard and doesn’t create aerosolised fecal plumes)
              but that’s just one of a million little things that compose a whole…and i’m still regarded as a strange duck for employing so many such alternatives in a more or less systemic way….no matter that a bunch of locals have whispered to me that i was right about the coming problems, and maybe more of them should have at least thought about it more.
              being On the Krishna Wagon is the default position, arrived at as if by magic, and by virtue of being born in usa.
              no effort or thought is required to be on the Wagon….but lots of both are required to get off it.
              the most important requirement to getting off, is having the wherewithal to recognise that 1. we’re on a krishna wagon barreling downhill…and 2. that it’s possible to get off.
              but they have dinosaur beef ribs on sale at the supermarket and beer and ice are readily available….a is cob corn out of season…so why worry?
              a default assumption when i became disabled enough to have to quit having a regular job, was that i was now the Grasshopper….and all of them were the Ants, pushing their ever important paper around, and doing each others laundry.
              I think it’s been just the opposite, however.
              my disability freed me from 9-5, so that i could build this house(diy physical therapy), and pursue autarky.
              aside from wife’s cancer stuff, and things like property taxes and media habits, we’re pretty close to being able to just not leave the farm, if we saw that as necessary.(soon, perhaps,lol)
              It’s difficult for the townies to get their head around…that I might be the Ant, and they the Grasshoppers.

              Reply
    2. Susan the other

      Consolidation of power is only desirable if what you come to control is a functioning, going concern. If what you come to control is a pile of misery and need control over it is absurd.

      Reply
      1. Fritzi

        Once the surplus population IS seriously reduced the rest might be more worth controling?

        It is usually seen as the stuff of conspiracy theories because even the nastiest and most murderous ruling elites historically did not set out to reduce their polulation on purpose, in fact usually the opposite.

        Well, not the majority population of their core territories, that made up their power base, at least.

        Settler colonialists wiped out native polulations they deemed economically uninteresting, the Nazis planned to deliberately starve most of the slavic peoples to to death to make it easier to enslave and manage the survivors, but those are all a bit old fashioned for our “elites”, even if such monstrous policies of course could easily remain a threat even after the fall of capitalism and most of our current civilisation, when our current elites are only so much dust in the wind.

        But the current power elites don’t really think like genuine fascists did, and see them as quaint, archaic and barbaric.

        So what might they hope to achieve?

        I guess it partly depends on how much of their own Kool Aid they actually drank.

        How many of the world’s leading billionaires really bank on pseudo religious technotranscendentalist woo that Silicon Valleay peddles, transhumanism and all that rot?

        Many of them are very old geezers that started their decades long campaigns for destabilisation Long before these fads penetrated “Elite” consciousness.

        I don’t think the surviving Koch brother is calculating on having a digitized copy of himself “surviving” inside some Supercomputer.

        In a way, as divorced from reality, as cruel and evil, and as utterly idiotic as they may be, there are those among the Silly Con and Nig Tech adjacent “elites” that I find somewhat comprehensible.

        At least some of them may genuine believers in nerd rapture, believe that they will be gods, or at least help the new God being delivered to the world, expecting to leave their meatsack bodies behind and ascend to holodeck heaven.

        I’m 99,9999 % sure that won’t work, but the psychology behind it, ugly and inhumane as it is, is not fundamentally different from that of more traditional apocalypse loving religious fanatics.

        It is those not sharing (either of) these aspirations that are the true riddle to me.

        Reply
        1. hunkerdown

          In the jargon of computer science, neoliberalism could be said to be internationalizable. As long as the master narrative of markets replacing organic human relations has been completed, the plot devices, characters, subplots, gratuitous torture scenes, dead leftists, etc. are all just color (or payoffs). There’s plenty of money to keep not just one menagerie of housebroken intellectuals to write the fan fic that rationalizes the predators controlling the money supply and society at large.

          But really, that handmaiden to the new god rot, isn’t that exactly the grooming that future PMCs receive in high school these days? Don’t they mostly all aspire to be the master’s favorite whip, always at his side, oiled by one of the slaves on a weekly basis? Imagine the output of Eric Schmidt’s planned school of “public servants” (though he dare not use the term).

          As for those at the top, I’d just paraphrase Bernie: “If you didn’t believe that, you wouldn’t be sitting in that chair right now,” and Seneca: “Religion is regarded by the simple as true, by the learned as false, and by the wise as useful.”

          Reply
  6. John Beech

    Evictions . . . simple solution. Renters stay, write landlord bad check, which the bank cashes despite lack of funds, and the government makes the bank whole.

    $600 week . . . continues for foreseeable future – BUT – the Republicans are right; lot of folks won’t get off their ass to hunt for a job as long as this amount accrues.

    Call them lazy bastards, whatever, facts of life. Human nature. However, the payments MUST continue during this emergency. No other choice. That, or let the US and world economy spiral into Great Depression, Mark II. And maybe not the world economy because with China on the other side of the trades, they will move into the vacuum we leave. Price of stupid politics.

    Reply
    1. WobblyTelomeres

      Riiight. Knowingly commit a felony because the powers that be say it’s a-okay. Wonder how that flies.

      Reply
      1. ambrit

        It’s the way the upper echelons of the power elites now work. Or did you miss Epstein, the Droner in Chief, the Great Foreclosure Swindle, etc. etc.?
        the “little people have now been woken up to the fact that felonies are just fine and dandy for their “betters.” Why shouldn’t the “lowers” steal a piece of that pie too?
        Public morality is now a null set.
        As above, so below.

        Reply
        1. drumlin woodchuckles

          Don’t try it unless you can outshoot the police and the entire Legal Enforcement Industrial Complex.

          Reply
          1. ambrit

            It is simply a matter of breaking the morale of the “enforcement units.”
            Besides, who is talking about just shooting? Think more along the lines of what happened in Irak during the formal occupation. IEDs are a simple and effective tool in the guerrilla conflict that will be the end state. Look to the IRA proper to see how effective a dedicated core group using irregular warfare methods can be.
            What is presently missing is a coherent group with a simple and easily explained ‘philosophy.’ Say, a Scientology Militant for dissatisfied citizens.
            As I have said elsewhere, the real revolutionaries will not be arguing here or anywhere else online. Such people will be functionally paranoid.

            Reply
    2. d

      i suspect china will be no better than the world, after all, they sell to the world, they dont buy a lot of what they make. sort of like how the us was back before the great depression. v1

      Reply
    3. EGrise

      The behavior of the people with the least amount of power is what we need to be concerned about right now?

      C’mon, man.

      Reply
      1. hunkerdown

        Yes. It is. Conservatism is an ideology whose entire point is that some people are entitled to prey on other people. Everything that issues forth from their mouths can be traced back to that core sadomasochistic tenet. (The libertarian-authoritarian axis on the Political Compass merely helps to elaborate the principle on which they believe prey and predator roles should be allocated.)

        Reply
      2. ambrit

        It is. This group of people is soon going to reach critical mass, after the evictions and poverty get going. This is what I referred to earlier as “riot tinder.”

        Reply
          1. ambrit

            As I ponder this more, I begin to switch my thinking from viewing this as a political crisis and to begin viewing this as a socio-economic crisis.

            Reply
  7. TMoney

    God bless this blog and all those who write for it. Congress fiddles while the Republic burns. We are in the Wile E. Coyote period – over the cliff, but not yet falling…

    I’ve not read any accounts of how much our feudal overloads are hearing from the peasant class during this “law making”. Are their phones ringing day and night – or – do they only hear the sirens whispers from K street ?

    They really seem to believe that back dating the money will make this OK. By the time the money makes it to people the damage will be massive. Families made homeless, medications skipped, meals missed, misery inflicted oh and some economic damage – but that will be WELL reported.

    It was all preventable, just like most of the pandemic.

    Reply
    1. Jonathan Holland Becnel

      Shock & Awe Baby.

      Its like the looting on New Orleans post-Katrina writ large.

      All small businesses shut down, their real estate consolidated, and FAANGS running Monopolies.

      Reply
      1. ambrit

        We were on the Mississippi Gulf Coast during and after Katrina and you speak the truth. It was the same here. That level of disruption will bring out the “animal spirits.” The small scale looting is almost guaranteed because the large scale looting this time has already happened. In and after Katrina, many shady politicos made book in various ways dealing with the aftermath of the disaster. Today’s looting elites already have their cut.

        Reply
  8. William Hunter Duncan

    Apparently Washington and Wall Street think that 100 million strong precariat/underclass are just going to lay down and die.

    Reply
    1. Amfortas the hippie

      almost 50 years ago, they thought that Chinese Peasants would be content to remain Chinese Peasants….the perennial blind spots of Empire.
      Lots of folks have recently discovered Roman History, as well as that of France.
      But I see the Balkans…combined with Central America(as far as Federal participation) and maybe, like someone said, here, the Spanish Civil War.
      South Central LA in the 80’s expanded across the land.
      That 100 million strong Precariat is divided in myriad ways, including by sports rivalry(people here still mock people in the next town over, even though we haven’t played each other in football for 20+ years).
      I can see a way in my far place to lead and nudge our way towards a peaceful end…but I’m fortunate, due to the geography and the people’s history of the place. Cohesion is revered, however tacitly.
      I doubt this is the case almost anywhere else.
      Machine has been too successful in it’s pursuit of “There is no such thing as Society”.

      Reply
      1. flora

        See Barbara Tuchman’s book “The Proud Tower” about the 25 years in Europe and the US preceding the start of WWI. “Chapter 2 – The Idea and the Deed: The Anarchists 1890-1914.”

        Reply
        1. Dirk77

          You’ve already got me reading The Decline and Fall of the Third Reich, so I’m not sure I’ve got time for these. One question though: in the Thomas Frank interview by Paul Jay last week, I was struck by the implicit assumption of both that change in the USA/West was going to come from within. But if the decline is great it seems that change will be forced from outside. Is that what happened in WWI? Or were the aristocracies replaced internally?

          Reply
          1. ambrit

            The European Empires of pre WW-1 were polyglot affairs. The English had India and Africa, etc. The French had North Africa. The Austro-Hungarians were really two kingdoms melded with various outlier ethnicities. The Russians had the Stans. Even the Germans had a North and South cultural divide. All these, to one degree or another fell and were replaced. Even England and France never regained their previous heights of dominance in their colonies.
            The systems had to change. They had failed the test.
            America is facing a similar test now. When it’s system fails, something will have to replace it. That is the opportunity and the danger.

            Reply
            1. Dirk77

              From your examples, all the changes seem internal, though the colonies could be within themselves. Anyways, that seems to answer my question. Thanks.

              Reply
              1. ambrit

                I have thought a bit more about it and feel that the basic contradictions were indeed within each individual empire, but the precipitating events were externally applied. A Serb shot the Archduke, but the declaration of war came from the external allies of the Serbs; Russia, France, England et. al. The empires declared war on each other, the essence of outside influences.
                When seen from the next level up, Europe did indeed break up due to internal factors. However, then as now, the degree of cohesion to be seen in Europe as a whole is weak.

                Reply
      2. Fritzi

        I think a great many peasants throughout history would have been quite content remaining peasants if left in peace without threat of starvation.

        Most people don’t have grand ambitions and are/were/could be quite happy with rather modest possessions, as long as there was little actual deprevation.

        And halfway competently run Empires worked hard to ensure that peasant bellies did not go empty if it could at all be avoided without the elite having to sacrifice too much (which often worked, at least for quite some time).

        Mike Davis’ great “Late Victorian Holocaust”, that was extensively talked about in the recent War Nerd post and comments, after all not only described the perverted depredations and unlimited callousness of european capitalist Empires, but also contrasted it with they way traditional, pre capitalist empires like Abyssinia and Qing Dynasty China behaved radically different LX, and how Chinese rulers, despite largely lacking the advantage of modern railroads, did an enormous ammount of pretty damn efficient relief work, saving many millions of lifes of their subjects successfully during the devastating El Nino caused droughts, including financial support for small farmers to protect them from having their land gobbled up by big land BN owners and speculator, while the british colonial goverment of India, obsessed with free trade, simply let people die.

        He describes also how such practices had a millenia old tradition in Imperial China and many other places around the world.

        And he also shows that Europe diverged from the rest of the world long before the 19th century, at least from the age of mercantilism, nothing the difference in the reaction to famine between, I believe it was the Qianlong Emperor, and his contemporary, Louis XIV of France.

        Suffice to say the european monarch made for a far less admirable figure than his chinese counterpart.

        Reply
    2. flora

      These bubble-dwelling Congressmen and women assume everyone in the country will always see politics and elections as the only means of redress. The US’s own history, even during the rise of the Populists and during the depression, shows this isn’t true.

      Reply
    3. Kurtismayfield

      They know most will blame themselves and won’t do squat.. and the Military industrial surveillance state will save them.

      This whole thing is an example.. let the 10-20% burn as an example to the rest. See what can happen to you?? They think that cracking the whip will continue to work for them.. until it won’t.

      Reply
    4. d

      almost but not sounds like what happened after the plague, where the masses disappeared (only in higher counts than the elites of the day)….and that lead to mass destruction of the ‘old’ style elites of the day…as the work crashed…leading to a lot more interest in being ‘nice’ to them…since they were few in numbers compared to before….could that happen again?

      Reply
      1. ambrit

        Except that our Xenomorphs wear three piece suits.
        And who again is our supposed Bishop? Elon [Family Blogging] Musk? C’mon man! Give us a break!

        Reply
  9. James O'Keefe

    Democrats are certainly guilty of kicking the can down the road and have no long term vision for a way out of the depression we are facing. However, shoring up the post office and state finances would be a marked improvement and the $600/week UI benefit will help many who desperately need it.

    The Republicans are actively aiding the depression and want the immiseration of millions so they can claim to be tough on the deficit.

    Reply
    1. John k

      The problem is that dem elites feel forced to align their views with their donors, not those that elected them. This makes it simple, no need to think, just do as you’re told. Those that climb in dem ranks are not the best or brightest but those that best massage the donors. Would you say either schumer or Pelosi is B&B? So you get ‘for every blue collar we lose in western Pa we gain two reps in Philly’… and more than that the policy doesn’t change bc their donors demand rep policies.
      Trapped in golden cages…

      Reply
  10. Tom Stone

    This is beyond stupidity, it is no less than insanity.
    Remove any mechanism for peaceful change, add pervasive corruption and incompetence ( They go together), throw in a pandemic and then toss a few million well armed peasants in the street to starve…
    What could possibly go wrong?
    Hello?

    Reply
  11. shinola

    Uprising? Revolution? Perhaps, but there’s also the possibility of a “Jay Gould Solution”:

    …hire one-half of the working population to kill the other half.

    Maybe not as far fetched as it sounds – after all, this is the Good Ol’ USA…

    Reply
    1. Shiloh1

      Sorry, didn’t mean to plagerize your Gould quote! I should have read comment thread completely prior to posting.

      Reply
  12. The Rev Kev

    This is all a coupla months too late. When they were first debating the CARES Act back in what, March, Bernie and all the Progressives should have dug their heels in and said no trillions to the billionaires & corporations unless there is parallel support for the people while the pandemic lasts. It was either both classes or nobody would get a penny. It was then that there was leverage in play so it would have passed. Hell, they could have gone for medicare for all and probably gotten it passed.

    But of course that did not happen. Bernie and the Progressive folded like cheap lawn-deck chairs and voted for the CARES Act and the opportunity was lost forever. Now that the billionaires and corporations plus all their flunkies have gotten all the trillions that they could need ( I said need – not want) there is no longer any leverage to be had to force the Senate and the House to pass relief for the other odd 300 million Americans. But the stock market is going like gang-busters so there is that.

    Reply
  13. Jeremy Grimm

    After the CARES Act Kabuki, the current ‘bargaining’ and delays appear as if designed to ratchet up the stresses on the Populace. It appears to me, as if Congress were assembling a HEROIC-HEALS Act offering a slender thread of help to a desperate Populace wrapped in a full load of poisonous baggage representing the hard-fought ‘compromise’ reached. While Congress wrestles over $600 or $200 — two numbers which appear as if designed to reach $400 — there is no further mention of the TRUST Act.

    I don’t know enough about the dickering to make sense of what is going on with providing “funding for state and local governments, and funding the Post Office”. I am not sure what the Elite agenda is for state and local government, and I can’t imagine letting the Post Office crash and burn at this particular juncture could be to anyone’s benefit.

    Reply
    1. drumlin woodchuckles

      Letting the Post Office crash and burn at this particular time would be to Amazon’s benefit and FedEx’s benefit and maybe UPS’s benefit. And Wall Street’s benefit if Wall Street can get their hands on the 75-years-of-prefunded-Retirement money. Mmmm. . . . all that beautiful money . . . Trump thinks it would be to his political benefit by stopping mail-in voting.
      No Post Office? No mail-in voting! So simple . . .

      If all the state and local governments are driven into liquidation, they will have to sell off their state and local municipal properties and assets at pennies-on-the-benjamin or less. It would be Yeltsin’s Last Roundup. So it would suit the Elite’s privatization agenda to drive all states and local governments into liquidation.

      Reply
  14. Jeremy Grimm

    “But Covid-19 isn’t just a demand shock; the disease is forcing a wide-ranging restructuring of the economy.”
    While playing “kick the can” with Populace I believe the Government is very much concerned with how the economy is restructured. I believe the Congress positioned funding for the Fed to support the wholesale consolidation of the economy. I believe Mellon might put it: Liquidate labor, liquidate small and medium businesses, … enterprising Cartels will pick up the wrecks with Government money.

    Reply
  15. Anthony G Stegman

    I’ve always known Zero Hedge to be a doom porn website. Now it seems that Naked Capitalism is being heavily influenced by the doom and gloomers too. Never forget, things are not as bad as you think. The sun always rises.

    Reply
    1. Massinissa

      *facepalm*

      What, specifically, do you find to be ‘doom and gloom’? Is there something in the article or in the comments that you believe to be untrue?

      Also your last comment is also very unhelpful. There are many times in history where living standards become worse for the mass of people for considerable periods of time. Yes, ‘the sun always rises’, but sometimes that takes years or even generations.

      Reply
    2. Jeremy Grimm

      Gosh! And it’s always darkest before the dawn. Oh! and
      Opportunity:
      Then came the king’s son, wounded sore bested,
      And weaponless, and saw the broken sword
      Hilt-buried in the dry and trodden sand,
      And ran and snatched it, and with battle-shout
      Lifted afresh he hewed his enemy down
      And saved a great cause that heroic day.

      And one of my favorites: “High Hopes”

      and of course and especially fitting the times:

      Ain’t got no place to lay your head somebody came and took your bed
      Don’t worry be happy

      The landlord say your rent is late he may have to litigate
      Don’t worry
      Ha-ha ha-ha ha-ha
      Be happy

      Reply
    3. Yves Smith Post author

      This is name calling. You can’t dispute anything in the post and you don’t like the implications.

      If you want happy endings, Disney is over there.

      Reply

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