Get Jonathan Bernstein's newsletter every morning in your inbox. Click here to subscribe. Just a few weeks ago, Congress was acting quickly to deliver massive relief to a nation stricken by a pandemic, with most other politicians and commentators approving, including the president. I'm afraid we're now spiraling into the Unclear on the Concept portion of the response. Some liberals went first, expressing disapproval of plans to bail out businesses, especially big ones. Republicans countered by attacking aid for the Kennedy Center and Harvard University. Now Republicans are demonizing state and local governments, and pretty much everyone is bashing Shake Shack Inc. and other bigger companies that received small-business loans. Hey, everybody: Cut it out. The reason for these aid packages isn't to reward institutions that are intrinsically deserving. That, for the most part, isn't the government's call. The reason is because without businesses big and small — as well as non-profits, governments and all the people who work for them — the U.S. economy would collapse to a greater extent than it already has, and wouldn't recover any time soon. A major rationale is simply employees. People who lose their jobs tend to stop spending money — and when customers don't spend money, companies lay off more workers, who in turn also stop spending. So things get worse and worse. In a crisis like this, it doesn't matter whether those employees work for New York State or Harvard or a mom-and-pop restaurant or, to pick one industry that seems particularly undeserving, a cruise line.
And governments? The idea that some states are in trouble because they were previously mismanaged, or that they should've planned for this, is a joke. The budget damage is across the board. When the economy collapses, so does the tax revenue that all governments rely on, while state obligations almost always get more costly. Yes, they can cut back. But less spending by governments can hurt the economy just as less consumer spending can. And again, the question isn't whether each recipient of federal help deserves it; the question is what's best for the broader economy. Of course, this doesn't necessarily mean that the specific programs that Congress passed are the best ones. Mistakes are a necessary consequence of rushing things through. So it's disappointing that Congress isn't being particularly aggressive about oversight so far and that President Donald Trump is resisting it. But Republican senators who are resisting aid to state and local governments are doing a serious disservice to the economy, not to mention harming Trump's chances of re-election and their own chances of holding the majority. The president, for his part, seems to see all of this as a question of communications strategy. It isn't. There's no message that can make people overlook a brutal pandemic or ignore a severe recession. What matters for electoral purposes is controlling the coronavirus and getting people back on the job — wherever they work. 1. Andrew Rudalevige at the Monkey Cage on Congress and Trump's immigration order. 2. Dan Drezner on U.S. policy toward China. 3. Yuhui Li on his new book about democracy and majorities. 4. Bonnie Honig on Trump's bleach speech. 5. Aaron Carroll explains that reviving the economy isn't a separate choice that Trump or state governors can make. It can't happen until the pandemic is under control. 6. My Bloomberg Opinion colleague Ramesh Ponnuru gives the optimistic view of the U.S. response to the pandemic. 7. And Philip Bump and Ashley Parker break down exactly what Trump does in his task-force briefings. Get Early Returns every morning in your inbox. Click here to subscribe. Also subscribe to Bloomberg All Access and get much, much more. You'll receive our unmatched global news coverage and two in-depth daily newsletters, the Bloomberg Open and the Bloomberg Close. |
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