Economic Stimulus Hopes Are Just About Lost

Economic Stimulus Hopes Are Just About Lost

White House Chief of Staff Mark Meadows and Secretary of the Treasury Steven Mnuchin, just after negotiating stimulus two months ago.

Photographer: Alex Wong/Getty Images North America

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Today’s Agenda

Stimulus Now 43% More Dead

Like Jim Carrey in “Dumb and Dumber,” we keep thinking there’s a chance the U.S. government will pass more stimulus, even though at this point it looks like that chance is one in a million.

President Donald Trump seemed to kill all hope yesterday when he tweeted that relief talks were off, repeatedly insulting House Speaker Nancy Pelosi for good measure. Then he had a change of heart, because before long he was again calling for stimulus. This is unfortunately par for Trump’s course, write Tim O’Brien and Nir Kaissar; even before he was on steroids, his leadership on this issue has been erratic and lacking. 

But one big problem for Trump and anybody else wanting more relief, writes Jonathan Bernstein, is Senate Republicans don’t really want it. They’ve been skeptical of it since way back in May, when the House passed a $3 trillion bill the Senate ignored for months. In Jonathan’s view, any hope of a new bill is less “half the Avengers” dead than “Generalissimo Francisco Franco” dead.

Terrible news if true, because the remarkable recovery the U.S. economy has enjoyed so far didn’t just happen by magic, notes Bloomberg’s editorial board. It was the handiwork of not only the Fed but also rare and extraordinary fiscal policy. Republicans played a big part in that success, and Michael R. Strain writes they need to embrace that success and build on it.

With the central bank running low on ammo and the pandemic still unchecked, an economy without fiscal relief risks catastrophe. It could get so ugly that Karl Smith thinks Democrats should cave in and give Trump the quarter of a stimulus loaf he now says he wants rather than hold out for something bigger. But the chances of Republicans agreeing even to that may be in Jim Carrey territory.

Further Stimulus Reading: The Fed does have one arrow: its muni lending program, which it should extend and cheapen. — Brian Chappatta 

Small Solutions to Two Big Problems

Even without more stimulus, there will be a huge fiscal mess to clean up when all this is over. Higher taxes seem inevitable. But former IRS chief Charles Rossotti points out the U.S. government can raise hundreds of billions in revenue every year simply by doing a better job collecting taxes already owed. Better IRS funding would help, but so would simply changing some income-reporting practices and bolstering the agency’s technology.

Even before coronavirus hit, a lack of affordable housing was a big problem in this country. But one simple tweak could help with this too, writes former Freddie Mac CEO Donald Layton. Better and cheaper mortgage insurance could lower costs for homeowners and also protect the system from insurers struggling as they did in the financial crisis. A pilot program run by Fannie Mae and Freddie Mac using a different approach has been successful, and their regulator should stop dragging its feet on making changes permanent.

Having Sown, Big Tech Faces Reaping

The FAANGs or whatever they’re called these days dominate our stock portfolios and many key aspects of our lives. It’s difficult to imagine how our ancestors ever made it through pandemics without the Amazon-Apple-Facebook-Google-Netflix omniblob. And yet! These massive companies are also fundamentally uncompetitive and sometimes even downright harmful to our psyches and society. A new House report lays out in damning detail the many anticompetitive practices of America’s tech giants, writes Tae Kim, and even offers some good ideas for controlling them. But these ideas, which include some breakups, won’t become law unless Democrats take over the White House and Senate, notes Joe Nocera.

Trump’s Risky Travels

Though the technology exists to easily trace the path of Covid-19 through the White House, we may never get such a reckoning because the White House refuses to give it. Suffice it to say the president or someone near him has been spreading coronavirus to many, many other people in his orbit. The president himself took an ill-advised trip to his golf club in Bedminster, New Jersey, after learning he’d been in close contact with an infected Hope Hicks. The occasion was ostensibly a fundraiser, but Tim O’Brien notes it also coincided with a golf tournament key to bolstering his club’s shaky finances. In other words, Trump may have exposed hundreds of his own supporters, staffers and customers to coronavirus just to help pad his bottom line. 

Further Trump Finances Reading: Trump’s ability to repeatedly go deep into debt shows just how broken our capital-allocation system is. We keep throwing good money after bad. — Noah Smith 

Further Reading

Bolstering Taiwan’s defenses and America’s regional alliances can prevent a disastrous war with China. — Bloomberg’s editorial board 

Instead of focusing on shutdowns, Europe should make sure it has enough ICU capacity for a second Covid-19 wave. — Lionel Laurent 

Benjamin Netanyahu’s mishandling of the coronavirus may be what finally sinks him politically. — Daniel Gordis 

Voters are the kryptonite of the Republican Party, which is why it’s doing everything it can to discourage them. — Frank Wilkinson 

Democrats’ high-minded explanations for Supreme Court packing don’t hold water. — Ramesh Ponnuru 

Letting Congress vote from home would just lead to more polarization than we have now. — Noah Feldman 

GE’s SEC probe is a reminder it still has many issues to put behind it. — Brooke Sutherland 

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Note: Please send salmon and complaints to Mark Gongloff at [email protected]

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