Unsanitized: Pandemic Response Watchdogs in Congress Working Diligently to Increase Unemployment

Plus, the meat racket. This is The COVID-19 Daily Report for May 9, 2020.

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First Response

We learned that 20.5 million jobs were lost in April, a deliberate policy choice on the part of Congress to make unemployment insurance the most robust channel for individual relief. That untold numbers of Americans can’t get through to process their claims is the tragic flaw in this plan. A panel of policymakers assembled to judge the coronavirus response might look at the state of things and publicize the need to bolster broken state unemployment systems. It might think about how to make those temporary job losses come back when the lockdowns end. It might highlight the value of paying businesses to keep people on payrolls—a universal standard that doesn’t depend on individual luck with the state unemployment systems. Or maybe it would address disasters in workplace safety, or rental and mortgage markets.

It might do a thousand things other than the “first official action” of the House Select Subcommittee on the Coronavirus Crisis, announced yesterday: trying to get more people on unemployment and buckle those systems even further.

That would be the expected result of badgering five companies with formal letters to give up their $10 million Paycheck Protection Program loans. The Clyburn Committee (its chair is House Majority Whip James Clyburn) selected five publicly traded companies with market capitalization over $25 million and more than 600 employees for the letters. This includes household names like Gulf Island Fabrication or Universal Stainless & Alloy Products, Inc.

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The Clyburn Committee (which Republicans have named no members to and could be boycotting) certainly isn’t alone: this has become a new sport in America, finding companies deemed “undeserving” and shaming them into giving back PPP money. And I’m sure there are lots of undeserving recipients out there; I’ve been critical of them in the past. (Full disclosure, the Prospect got one of these loans.) But it’s just axiomatic that if you force companies to give back loans that are effectively pass-throughs to worker paychecks for two months, the end result is that the companies will fire the works.

Is this a worthwhile “first official action” of the only functional oversight entity in the federal government on pandemic response? The special inspector general hand-picked by Donald Trump to investigate his administration’s response (he’s a former White House lawyer) has been through a Senate hearing but isn’t confirmed yet. Trump’s been firing so many other inspectors general that I wouldn’t expect this one or the consortium of IGs supposed to look at pandemic response to do much. The Congressional Oversight Committee, meant to watchdog the corporate bailout, still doesn’t have a chair. They’re supposed to have their first report out actually today, which is obviously not happening. The White House is selectively allowing coronavirus task force members to testify before Congress, to insulate them from scrutiny.

And so this subcommittee is the only thing with any ability to operate, and they’re jumping on the existing frenzy around penny-ante PPP loans?

At best, a successful badgering of these companies to return the funds treads water in terms of aggregate employment; those at these larger businesses don’t get paid and some at smaller ones do. There’s also a Dr. Evil from Austin Powers quality to the whole thing: getting mad about TEN MILLION DOLLARS when the Federal Reserve is in possession of trillions to throw at corporations that dwarf the size of Gulf Island Fabrication or Universal Stainless & Alloy seems misplaced.

There should be a process to audit companies that didn’t follow PPP guidelines, and according to the Treasury Department there will be. The Clyburn Committee is seeking a cheap PR win of questionable value to avoid looking in the mirror at Congress’s performance. If the PPP had enough money to meet demand nobody would care about random companies getting “too much” in loans. The Federal Reserve could have (and already has, in a way) taken this entire program onto its balance sheet, making this scarcity a moot point. The subcommittee is silent about this. And as long as we’re talking about the “wrong” companies getting funded by PPP, the Speaker of the House wants to make corporate lobbying firms eligible for it.

The whole thing reflects the contemptible record of Congressional Democrats throughout the crisis. They conceded a giant corporate bailout and saved most of its needed priorities in reserve for the “next” bill. Now the White House is opposing any new legislation through May. This is highly predictable Lucy and the football stuff, and outside of really just AOC, nobody has even the slightest anger about it. And the committee in the only real position to shine a spotlight on the overwhelming need in the country and the monstrousness of any policymaker shunning their responsibility is busy going off on Gulf Island Fabrication.

The Skinny on Meat

A couple weeks ago everyone was incensed that Donald Trump was sending meatpacking workers back to their coronavirus-infected plants because the right to have a Monster Thickburger was a national emergency. Because Trump is all hat and no cattle (pardon the pun) he didn’t actually force meatpacking plants open. He told his Agriculture Secretary to see what he could do.

The Secretary, Sonny Perdue, did so earlier this week, sending letters to the packers asking them to implement certain safety standards to reopen. Maybe five of them have, out of at least forty that have been shuttered. One Tyson plant in Waterloo, Iowa reopened after two weeks on Thursday. The same day, they announced that twice as many workers had been infected as previously disclosed.

Meatpacking plants, even without the pandemic, needed new safety standards anyway. Injury rates have spiked since 1980, and line speeds have accelerated along with it. Inspections are nearly non-existent. Wages have collapsed, and the industry is more consolidated than it was at the time of Upton Sinclair’s The Jungle. The largely immigrant workers being exposed at these plants quite literally aren’t thought of as people. “The surge was due to the meatpacking—that’s where Brown County got the flare. It wasn’t just the regular folks in Brown County,” said the chief justice of the Wisconsin Supreme Court on Thursday.

The line speeds, close quarters, and need for refrigeration (and therefore a small space to reduce the energy used to cool the space) makes meatpacking a hot spot for COVID-19 throughout the world. But America’s unique specialness is the consolidation, which makes the supply chain more vulnerable and makes shortages more likely, but in normal times (and even abnormal ones) makes meatpackers rich. Prices are soaring for meat consumers and dropping for farmers and ranchers. The middleman gets rich. By controlling the supply through the plants and both sides of the transaction, they can dial in profits in whatever scenario. It’s a function of the lack of competition.

Eleven attorneys general, from both parties (mostly Republicans in fact), have called for an investigation into market manipulation and price fixing. Even the President asked the Justice Department to look into it.

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