Good Faith
I think most people, regardless of their political views about the President, agree that the COVID-19 crisis puts many Americans’ health at risk. And, I really believe, in spite of what I read on social media, that most Americans don’t want others to get sick or die. But, some are desperate: they are afraid that they won’t get paid, they won’t have a way to buy food for their families, or pay their mortgage, or keep the heat on in the winter or the air in the summer.
They feel that this crisis makes us choose between personal economic survival and other’s illness and death. In fact, it’s even worse than that, because they also know that they are risking illness and death for themselves, their families, and their friends. But they are willing to take that “blind” risk, rather than suffer the more obvious economic catastrophes.
Yesterday I went on a rant about some of this. Some of my friends (and they still are my friends) are clinging to aberrant scientists, or conspiratorial “insiders”, who are telling them what they want to hear. They’re told it’s all a lie, a fake crisis to achieve some dark underlying goal. They reminds me of the anti-industrialism movement of the late 1800’s, where workers took their shoes, called “sabots,” and threw them into the factory machinery. It’s where we get our current word “sabotage” from, and it was a desperate attempt to stop progress. It didn’t work then, and I don’t think it will now.
Our Mistakes
There have been many mistakes in this COVID-19 crisis. We were late, so late, in recognizing the danger that the virus represented. We didn’t act in a way that secured our country. The November elections will in part, be all about how that was handled. We all will get to weigh in then. But there has also been a failure of imagination, an inability to think beyond our current processes, that has left many Americans in this desperate plight.
Unemployment
Let’s look at our unemployment process. Here in Ohio, we have a state unemployment compensation agency that in the past processed between 20,000 and 30,000 claims a month. December 2019 was 29,389. January 2020 claims were 25,603, February 2020 20,498. Then the crisis hit: March 2020 unemployment claims were 540,542. While final numbers for April aren’t out yet, we know that there were closer to 600,000.
So why is there surprise and consternation that the state is having trouble processing unemployment claims? A system designed to handle tens of thousands is now trying to deal with hundreds of thousands. It wasn’t designed for the load, and in this moment of crisis, with offices closed and workers socially distanced, isn’t “scaling up” very well. The current process might not even be able to handle the volume with a full “scale up”.
Another “idea” is to cut the payroll taxes so that employees have more money. But the problem isn’t getting money to the employed; it’s about how to get money to those who have lost their jobs because of the crisis. Cutting taxes on non-existent pay gives you that old equation (and song): “nothing from nothing leaves nothing”.
PPP
And how about the PPP, the Payroll Protection Plan that was supposed to allow small businesses to keep employees on their payroll, even if the business has to close. The system is for the business to “borrow” money from the Small Business Administration, and then “if” they use the money to pay employees and essential bills, the loan would be forgiven.
It’s not about the fact the “small” businesses were defined as having 500 employees or less, and that well financed and funded organizations from the LA Lakers NBA team to Harvard University to Ruth Chris Steakhouse (home of a very expensive flat iron steak) took most of the first $350 billion (the Lakers and Harvard have since returned the money). It’s that there were so many businesses applying for funds. Chet’s Auto here in Pataskala, with five employees got in line with everyone else but just like the unemployment process, the system was overwhelmed with the volume. And the amount of money, including the next $310 billion added in, isn’t even close to covering the need.
Fire Hoses
We tried to use existing systems, unemployment benefits and small business loans, to grease the process of getting money out. It wasn’t a bad idea in principle. Why establish a whole new structure when one already exists? But it’s the old fire hose analogy: you can’t pump more water through a maxed out two-inch hose. You need a bigger hose.
We have an existing bigger hose. We even used it for just a moment. The IRS moves trillions of dollars every year. They have a vast database of taxpayers. When we wanted to pump out $1200 per person, the IRS process worked better than anything else.
Listen, we know that health insurance through employment works well for millions of people, but fails millions as well. The US model of using employment as the sole means of financing people isn’t even perfect in a “perfect world”. Whatever the Dow Jones Industrial Average was in January, we are in a “perfect world” no longer.
So let’s take the money that the US Government is going to spend anyway – and skip the middleman. We have already dropped FOUR TRILLION DOLLARS – ($4,000,000,000,000 – just had to write that down). And right now, there’s lots of money leaking out the tiny hoses along the way to the people who need it. We’ve got a direct main line, the tax information. Let’s use it to establish a national wage until we can open up the nation SAFELY again. Then more Americans can feel secure about both their economic lives, and their health. They can take “the risk” of dealing with the virus first.
And they can stop throwing sabots.
