The late eighteenth century Sturm und Drang movement eventually led to the heroic “storm and stress” of Beethoven, so perhaps Johann Wolfgang von Goethe and Friedrich Schiller can be forgiven for that. The idea was clear enough – “Within the movement, individual subjectivity and, in particular, extremes of emotion were given free expression in reaction to the perceived constraints of rationalism imposed by the Enlightenment and associated aesthetic movements.”
But that meant there were endless tales of sensitive young poets wandering high in the Alps in the middle of dark storms. Everyone was brooding. The story of hopeless love and eventual suicide presented in Goethe’s novel Die Leiden des jungen Werthers (1774) was more irritating than enlightening. The kid was a jerk. But that was European Romanticism for a time. Embrace the storms of life. Embrace the stress. Live this life to the fullest. In fact, seek out doom and gloom. That’s where you’ll find yourself. That’s where you’ll find truth.
That’s also where you’ll find nonsense. Dark storms and doom and gloom at what seems like the end of the world reveal nothing much, except the end of things, and this weekend did reveal that:
Senate Democrats blocked a massive coronavirus stimulus bill from moving forward Sunday as partisan disputes raged over the legislation that’s aimed at arresting the economy’s precipitous decline.
Lawmakers had hoped to pass the enormous $1.8 trillion bill by Monday but Sunday night they were scrambling to revive talks, with the stock market poised for another sharp drop and households and businesses fretting about an uncertain future.
Negotiations continued even as the initial procedural vote fell short, with 47 senators voting in favor and 47 opposed. The tally was well short of the 60 votes that were needed to move forward. The number of “aye” votes was especially low because five Republicans are quarantined over coronavirus fears.
They had the chance to keep the nation from falling into an abyss, but with five Republicans quarantined over that damned virus, this would never work. The nation seemed to be doomed:
Ever since Majority Leader Mitch McConnell (R-Ky.) introduced the legislation Thursday night, senators have missed one self-imposed deadline after another to reach a deal. The vote Sunday evening was delayed three hours so talks could continue after it became clear it would fail, but no resolution was reached and it failed anyway. McConnell set another procedural vote for 9:45 Monday morning and dared Democrats to block it, noting repeatedly that the vote would come shortly after the opening of the stock market.
Trading had already been halted in the futures market. The Dow and the others had dropped too far too fast. No one knew what the morning would bring. And for the first time ever, the trading floor at the New York Stock Exchange had been closed. Two traders had tested positive. Everyone would work remotely now. They do have the systems for that, but the Senate had no system for remote voting at all. The storm was upon us. But one guy told everyone to relax:
“Right now, they’re not there,” President Trump said earlier in the day from the White House with the vote underway. “But I think that the Democrats want to get there. And I can tell you for a fact, the Republicans want to get there. And I don’t think anybody actually has a choice.”
Everything will be fine. Everything will be fine. Everything will be fine. No, it won’t:
The bill would seek to flood the economy with money in an effort to protect millions of jobs and businesses that now appear to be on the brink. It would direct payments of $1,200 to most American adults and $500 to children. It would steer $350 billion towards small businesses to stem the tide of layoffs, and push billions more towards hospitals and the unemployment insurance system. And it would create a massive, $500 billion program for businesses, states, and localities, with the direction and velocity of this loan program left mostly to the Treasury Department’s discretion. Few aspects of the legislation had any precedent to draw from in terms of their scale and speed.
Indeed, the sheer magnitude of the potential calamity kept lawmakers at the bargaining table as negotiators on both sides said they must deliver to slow the financial landslide that is disrupting millions of businesses and households by the day.
This has never happened before, so in the face of this storm, it was time to blame the other guys:
McConnell said it was time for Democrats to “take ‘yes’ for an answer” and accept a bill that he said incorporated many of their ideas. Democrats, though, alleged McConnell’s bill is tilted too far in favor of corporations and doesn’t include much oversight for $500 billion in loans and guarantees that could go to firms selected by the Treasury Department.
And so it was time to shout:
Senate Democrats and Republicans spent Friday and Saturday negotiating over the legislation with both sides saying they’d made progress, until McConnell announced late Saturday he was moving forward on drafting a bill even though there wasn’t yet a final deal. Each side quickly blamed the other for the breakdown.
After the vote failed, McConnell angrily lectured Democrats about the outcome. Republicans had hoped to move forward to final passage of the legislation on Monday, a goal that now looks improbable.
“The notion that we have time to play games here with the American economy and the American people is utterly absurd,” McConnell said. “The American people expect us to act tomorrow and I want everybody to fully understand if we aren’t able to act tomorrow it will be because of our colleagues on the other side continuing to dicker when the country expects us to come together.”
No, that’s bullshit:
Senate Minority Leader Charles E. Schumer (D-N.Y.) came to the floor a short time later to declare that Republicans were the ones behaving unreasonably by trying to advance what he called a partisan bill. Democrats said that despite some concessions on the part of Republicans, the GOP bill still had too many flaws and did not do enough to shore up the health care system and help average Americans.
“Now, let me be clear: the Majority Leader was well aware of how this vote would go before it happened, but he chose to move forward with it anyway – even though negotiations are continuing, so who’s playing games?” Schumer asked, before adding a hopeful note: “Can we overcome the remaining disagreements in the next twenty-four hours? Yes. We can and we should. The nation demands it.”
But of course that was bullshit too:
A major sticking point is a $500 billion pool of money for loans and loan guarantees that Republicans want to create, which some Democrats are labeling a “slush fund” because the Treasury Department would have broad discretion over who receives the money. There is little precedent for a program with a similar size and scope.
“They’re throwing caution to the wind for average workers and people on Main Street and going balls to the wall for people on Wall Street,” Sen. Joe Manchin III (D-W.Va.) said of Republicans.
And then the president confused everyone:
Trump himself seemed to acknowledge such concerns on the part of Democrats while insisting he did not want to offer bailouts.
“I don’t want to give a bailout to a company and then have somebody go out and use that money to buy back stock in the company and raise the price and then get a bonus,” Trump said. “So I may be Republican, but I don’t like that. I want them to use the money for the workers.”
Fine, but that’s not now:
Several senators spoke fearfully of the impact on the markets if they fail to reach agreement by Monday morning. Underscoring the spreading dangers, Sen. Rand Paul (R-Ky.) on Sunday became the first senator to announce he had tested positive for COVID-19, after working out with fellow lawmakers in the Senate gym only that morning. Not long after, Utah GOP Sens. Mike Lee and Mitt Romney announced they’d be going into self-quarantine because of being in contact with Paul; Sens. Cory Gardner (R-Colo.) and Rick Scott (R-Fla.) had self-quarantined earlier after possible brushes with infected individuals.
But someone has to do something:
House Speaker Nancy Pelosi (D-Calif.), meanwhile, suggested that House Democrats might chart their own course and release their own bill, which could put the Democratic-led House and the Republican-led Senate on different tracks and delay final agreement on any deal.
Yes, that only makes things worse, if there’s worse than this:
The economic conditions appear to be dramatically worse than first predicted. Federal Reserve Bank of St. Louis President James Bullard told Bloomberg News in an interview Sunday that the unemployment rate could hit 30 percent between April and June because of mass layoffs, which would be worse than what occurred during the Great Depression.
That’s the current thinking. Robert Kuttner is a co-editor of The American Prospect and a professor at Brandeis University’s Heller School and he’s thinking that way:
When the stock market crashed in 1929, the Dow plummeted from its September peak of 381.17 to a low of 41.22 in July 1932. Because so few Americans owned stocks, it took three years for the financial collapse to cycle though the rest of the economy. Unemployment only gradually increased, to a peak of about 25 percent in early 1933. Gross domestic product fell steadily, ultimately declining by about 30 percent.
The economic crash caused by the coronavirus, if anything, will be sharper and steeper.
That’s because everything is now connected to everything else:
If we set out to deliberately destroy an economy, requesting most people to stay home is a very effective way. The virus itself is disrupting production, but the necessary public health response to the virus is economically catastrophic – and if government doesn’t act massively to offset the damage, the collapse will worsen.
As airlines, hotels, restaurants, theaters, auto production lines and much of retail shut down while people self-quarantine, there will be enormous layoffs. Households reduce their purchases to bare necessities, causing more shutdowns and more job losses. A ravaged stock market adds to the downdraft.
That’s a death-spiral:
Treasury Secretary Steven Mnuchin told the Senate Republican caucus that unemployment could soon rise to 20 percent, and that could be optimistic, and Goldman Sachs projects that GDP could decline by 24 percent in the second quarter of 2020 – an unprecedented drop for a single quarter. Even the trillion-dollar stimulus package proposed by the Trump administration, as embellished by Democrats, will be woefully insufficient. Giving everyone $1,000, even $2,000, will help. But that’s about three weeks’ pay. Paid medical leave, extended unemployment benefits, investment in needed medical equipment, aid for devastated industries like the airlines and small businesses, as well as deferrals on tax and debt payments, are all minimally necessary. So are the Federal Reserve’s rate cuts and gigantic purchases of bonds to keep financial markets solvent.
But none of these measures is remotely sufficient, given the scale and rate of likely economic collapse.
In short, we’re doomed:
Even after eight years of the New Deal, the economy was still not out of depression by 1940, as critics of Roosevelt never tire of pointing out. Unemployment was still over 14 percent when World War II broke out.
No, wait! Hitler and Tojo saved us:
It was the war, and the astonishing mobilization for war, that finally cured the Great Depression. During each of the four war years, the government borrowed an average of more than 20 percent of GDP for the war effort, and at its peak spent more than 35 percent of GDP on the war, raising the difference from taxation. As a byproduct, America rebuilt production capacity, went on an invention spree and modernized its economy. We lived off that investment for much of the postwar boom.
After Pearl Harbor, in the first six months of 1942, the Department of War entered about $100 billion of military production contracts – more than the entire GDP of 1939. As half-idle factories roared back to full production, retooling from autos to tanks and planes, unemployment melted to less than two percent by 1943.
So this is the answer, with one minor problem:
Direct public spending is more effective than other forms of fiscal relief because every nickel gets spent and jobs are created directly. What is today’s equivalent of the World War II buildup, minus the war?
Yes, we don’t have a war, but we could pretend we have one and do this:
First, we need huge investment in hospitals and medical supplies. We need to reclaim supply chains for products like N-95 masks and ventilators that have been moved abroad. Government has the authority in an emergency to produce these needed materials itself if contractors can’t be found. In World War II, the Reconstruction Finance Corporation underwrote more than $20 billion in war production plants. Some of these were called GOCOs, for government-owned, contractor-operated. Upgrading our capacity to deal with the public health crisis could be phase one of the plan.
Second, according to the American Society of Civil Engineers, the United States will need $4.5 trillion for deferred maintenance of basic public infrastructure by 2025 – roads, bridges, water and sewer systems, power grids, rail lines, tunnels and public buildings. Take the train from New York to Washington and you will see a living museum of 19th century infrastructure.
Modernizing some of this will take advance planning, but there are trillions of dollars in projects that state and local government could begin this year or next. All that’s missing is the federal money. These projects will of course take trained workers, and a big part of the World War II model was investment in worker skills.
FDR had the WPA and Hoover Dam is still there, and so is the Blue Ridge Parkway, and the TVA brought electricity to a dark third of the country – but the war really ramped things up, and then there’s this:
Third is the need for massive investment to slow down global climate change and prepare for expected storm surges and coastal flooding. We need to replace carbon-based energy sources with clean and renewable ones. We need to upgrade commercial buildings and homes to make them far more energy efficient.
“Smart” power grids can save costs and make the economy more resilient to climate change. We will need to spend a lot of money on flood barriers. With fossil fuel companies devastated by crashing prices and the toll on fracking and shale, this is a particularly good time to invest in green energy alternatives. If government is going to spend huge sums to keep the economy afloat, we should get something tangible beyond mere survival.
This president seems to want to move the nation back to coal for everything, but if there’s a ton of money to be made in solar panels and windmills and flood walls, and the infrastructure stuff too, he might come around. He has to come around:
All of this will add up to several trillion dollars. But do the arithmetic. Total output in 2019 was about $21.4 trillion. If GDP falls by 20 percent – less than the 30 percent that it fell between 1929 and 1933 – that’s an annual loss of over $4 trillion of economic activity. This time, with government deliberately shutting down commerce, it could well fall faster. Only a World War II-scale response can make up that difference.
Where will government get the money? At a time when inflation is close to zero and the government can borrow for 30 years at less than 2 percent, this is precisely the moment to borrow to underwrite a recovery that also modernizes the economy…
We need to get ahead of this collapse now, and we have a superb model in the World War II mobilization.
But we don’t have a war, unless we do:
President Donald Trump on Sunday announced that he has activated the National Guard in California, New York and Washington State in order to combat the spread of the coronavirus. The administration emphasized that the deployment of guard members is not martial law.
The state governors will retain command of the National Guard, but the Federal Emergency Management Agency will cover all costs of the missions to respond to the virus outbreak.
So this is not martial law. He’s not suspending the Constitution. Yes, Attorney General Barr had floated the idea of allowing the government to arrest and detain anyone for any reason, without trial, indefinitely, while this virus thing lasts, or longer, but no one liked that at all. Even the folks at Fox News aren’t ready for martial law just yet, so Trump’s war was more of a minor dust-up, or an attempt to one-up Andrew Cuomo:
Trump used martial language during the briefing, echoing the governor of New York State and the mayor of New York City, who have criticized the president for not acting more forcefully. New York has the most confirmed cases and deaths in the United States.
“I’m a wartime president,” Trump said.
“And you’re not!” That was the message, but he did send in the troops:
As of Sunday morning, at least 7,300 National Guard members have been deployed to fight the virus in all 50 states, Washington D.C. and Puerto Rico.
“The federal government has deployed hundreds of tons of supplies from our national stocks pile to locations with the greatest need in order to assist in those areas,” Trump said.
Supplies include gloves, hospital beds, N95 masks and gowns that will be delivered in the next couple days, the president said.
And he had a bigger stick than Cuomo:
Earlier in the month, New York Governor Andrew Cuomo deployed the National Guard to New Rochelle, the suburb outside of New York City that has a large cluster of virus cases. Cuomo has urged the federal government to mobilize the military to fight the pandemic.
Trump did that. What could Cuomo say now? But of course this is not what Robert Kuttner has in mind. This will not save the economy. Trump needs a real war.
The New York Times’ team of Annie Karni and Maggie Haberman and Reid Epstein explain why a fake war will do just fine right now:
With the economy faltering and the political landscape unsettled as the coronavirus death toll climbs, a stark and unavoidable question now confronts President Trump and his advisers: Can he save his campaign for re-election when so much is suddenly going so wrong?
After three years of Republicans’ championing signs of financial prosperity that were to be Mr. Trump’s chief re-election argument, the president has never needed a new message to voters as he does now, not to mention luck. At this point, the president has one clear option for how to proceed politically, and is hoping that an array of factors will break his way.
The option, which he has brazenly pushed in recent days, is to cast himself as a “wartime president” who looks in charge of a nation under siege while his likely Democratic opponent, former Vice President Joseph R. Biden Jr., is largely out of sight hunkered down in Delaware.
In short, he had a marketing problem and this was a possible solution to that problem, but risky:
There are other variables that he and his allies hope will fall in their favor: that the outbreak of the virus will slow and, in the warmer months, dissipate; that the states will get it under control; that the federal government’s steps taken so far will flatten the curve; that Mr. Biden and the Democrats will look impotent and inconsequential by comparison; and that enough voters will move past his initial efforts to play down the virus’s dangers.
The great unknown, of course – and the tremendous risk to Mr. Trump’s political fate, no matter what he says or does – is that the human cost, the economic toll, and the longevity and course of the pandemic are all X factors that will most likely play out for months and could be strongly salient if not severe by the time of the November general election.
Yes, millions could die, and millions more could end up homeless and starving in the streets. Millions with no jobs and no funds make that inevitable. And the shriveled bodies of dead children everywhere, starved to death in the gutters, makes marketing your brand a bit more difficult. But this could work:
In perhaps the best-case scenario for Mr. Trump, the patina of a “wartime president” could prove to be influential with casual voters who don’t dig into the details of his belated response to the coronavirus, which included dismissing the criticism of his handling of the threat as a Democratic “hoax” and contributing to a slow start in testing for the virus.
“He is counting on people being so traumatized on a day-to-day basis that they will forget his inaction,” said Douglas Brinkley, a professor of history at Rice University. “It’s better for him to be a wartime commander in chief than someone who, when the big crisis hit, misread it completely.”
That’s the best case. The storm and stress will have overwhelmed everyone. They won’t be able to think clearly about anything, and they certainly won’t remember any details of anything. He wins. Or he doesn’t win:
Rarely have incumbent presidents seen their arguments for re-election evaporate so quickly. Mr. Trump and his advisers had planned to argue that the strong economy warranted a second term and that supporters and detractors alike wanted their 401(k)’s in the Trump-era stock market; that has now become an impossible sell. And as the administration negotiates an enormous bailout package with Congress for multiple industries, his strategy of caricaturing Democrats as “socialists” is not tenable either.
So Mr. Trump is trying to mount a new version of his old argument: that “I alone can fix it,” as he said at the 2016 Republican convention about the nation’s problems. He is counting on enough voters believing they have to stick by a leader in the midst of an immense global crisis.
Addressing fearful Americans, Mr. Trump said on Sunday evening: “You have a leader that will always fight for you and I will not stop until we win. This is going to be a victory.” He added at another point, “No American is alone as long as we’re united.”
But shortly after reading his new script on Sunday night, Mr. Trump mocked Senator Mitt Romney of Utah for self-quarantining. “Romney’s in isolation? Gee, that’s too bad,” he said sarcastically at the briefing room podium.
He just had to be nasty. He likes to sneer. His base loves that about him, but that’s problematic:
Mr. Trump’s temperament is dissimilar to “wartime presidents” with whom he is seeking to compare himself. Over the course of his presidency, Mr. Trump has struggled to stick to any bipartisan message, or speak emotionally to the pain and fear of Americans during crisis points like natural disasters or mass shootings.
“That’s why it’s so hard to be a wartime president,” said Michael Beschloss, the historian and author of “Presidents of War.” “Not only are you coming up with a strategy and tactics, but at the same time you have to let Americans know that you know how hard this is for them.”
Mr. Trump, so far, has struggled to feel anyone’s pain, unlike past presidents, while continuing to play out the fights with the news media that enliven his base. Last week, he lashed out at a journalist who had prompted him to explain what his message was to the millions of Americans watching him from home, who felt scared.
The president has also continued to credit his own administration’s response. But Mr. Beschloss added that “part of being a wartime president is being willing to give people bad news,” a job Mr. Trump has mostly left to others.
And the small stuff sets him off:
Mayor Bill de Blasio of New York tapped into one of Mr. Trump’s greatest fears when he referred to him on CNN as the “Herbert Hoover of his generation,” comparing him to a president who failed to recognize or take bold actions to stave off the stock market crash of 1929 and the subsequent Great Depression.
Trump is now posting endless tweets about how Bill de Blasio knows nothing and is a backstabber and a snake and everyone in the city has always loved him and hated Bill de Blasio who is a total loser, while he’s a winner, and his response here has been a perfect ten of ten, and everyone is always picking on him and he doesn’t see why, because he has saved the nation, over and over, and so on and so forth.
Wartime presidents don’t whine. And this is war, or should be, to save the nation. This is the storm. This is the stress. But there’s nothing romantic about this at all.