« The Weeds

Help is on the way (sort of)

2020-04-17

Ezra and Matt break down the implementation problems that have bedeviled the CARES Act.

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"Policy by no other means" The Weeds

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Matthew Yglesias (@mattyglesias), Senior correspondent, Vox

Ezra Klein (@ezraklein), Editor-at-large, Vox

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Jeff Geld, (@jeff_geld), Editor and Producer

Cold open courtesy of NBC News

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This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
Support for this episode comes from one plea worker or self employed. If so, this is, for you miss of self employed workers may qualify for up to fifty thousand dollars in one hundred percent. Forgivable ppp loans and wobbly can help you access that support. While please over three hundred thousand small businesses, get a ppp alone and proudly serves more than six hundred thousand small businesses across Amerika funds are did so apply now wobbly dot, com, Slash box and see if you qualify for a ppp alone, that's W. Oh p, L, why dot com, Slash, Veo Ex Wife is not a lender terms and programme rules apply For this episode comes from click up, we're losing out three hours every day, switching between all our work apps, but you can get them back with click up a flexible platform. The brings all
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Hello. Welcomes another episode of the weeds on the box media podcast network. I Matthew Iglesias here today with as recline, and we wanted to talk. About some of the implementation? in snags that are happening congresses fiscal stimulus efforts I wanna get. We are here recording on Thursday April sixteenth, which is officially that that the small Business Lending Fund that Congress created ran out of money it didn't. Last. Very long and some of that it's just like that in put enough money into it, they say. They're ongoing negotiations about putting
some more in, but there are also appear to have been actually a lot of problems with the program itself, and it has not been as easy for businesses to access or necessarily gone to the to the places that need it the most and that I think stage for stage of all the problems we're looking at here. I am personally a little confused about the way in which it is run out of money just to give a little quick backup on this program. It's three hundred and fifty billion dollars was the first tranche of money roughly, which is a lot of money, just to be clear, maybe not as much as it needed, but is a lot of money. The is in theory administered by the Small Business Administration, but because that is not a very strong fellow urgency and definitely not capable of absorbing the amount of incoming business loan requested, this programme is gonna, get they outsource data banks and eighty as banks are there. They have branches, they can sort of real structure themselves to administer this programme, but what you heard from almost everybody applying without those
almost impossible, and banks were prioritizing the customers who already had big loans with them and meanwhile the grim is really only accessible to small businesses that use allowed their money in payroll, shrilly fur like seventy percent apparel or above is really what they want you to access this programme, while so does all that on the background and your hearing, a lot of problems, so two things seem to be here: bidding simultaneously. One is all the monies gone but two is it a huge amount of the businesses who were told they were going to get money, have gotten and a lot of others haven't even been able to apply for it since a little unclear me if the money is getting trapped in the bank somewhere and that's part of why the money has gone from the federal level of this, but it's not actually been fully dispersed or something to me, so high that it has all been dispersed, and just nearly enough. Do you have a better read on that than I do so, give me mean. There's things running in one is the amount of funds available were just not sort of equal to that and at once,
equal to the need, but also it is a very generous program right. It was quantitatively limited and how much money there is. But if you call, For one of these loans, as we discussed in an earlier episode, the terms are dreamily generous, because in fact you know it If you spend the money on continuing to pay your staff you're able to basically walk away from the wound with with minimal sequences. So this is money. You know you really! You really want. If you're a small business and you're sort of losing out oftentimes in life, we have programs that have limited resources and then we need to come up with some kind of way to prioritize them. One way you can do add, is trying to identify the most worthy cases they didn't do that here. Another way, as you could try to hand out the money randomly they didn't do. That here
instead by sort of saying the government is going to backstop loans, that banks make to qualifying entity is in essence they prioritized businesses that had an easy time getting approval from a bank, which means that the bank needs to feel confident Did you really qualify for the loan because there's no risk to the bank? The federal government guarantees it, but the bank is accepting a certain amount of fraud risk right. If they lend me the money will, out like I'm, not a small business owner, and so they have a problem there. So if I were to just one- through the door of a bank and say hey, I've got a small business, they would want. Media can prove that. That's true, prove that I really qualify so in practice with the banks want to do is give these loans to small businesses that they already have an exist. Lending relationship with? Because if the bank has already lent your business money, they have all the pay
work on you. They know all about you and they can verify you easily and with low risk, but it means in effect that would Congress it was their camp with a programme that doesn't give money to the small businesses that have the most objective gives it gives money to small businesses that have the strongest existing relationships with banks that happen to have decided. They want to participate in the we're and to have, see what that sort of amounts to in the end. But I think concern. Is that a lot of, It's gonna me and is franchise. Sizes of big national, fast food chains, because they will have the sort of logistical infrastructure in place to get it done. Do you have a sense, though, if the exhaustion of the three hundred and fifty billion, nor I think it's free forty nine technically means three hundred and forty nine billion dollars, has moved into the bank accounts of small businesses or yeah, it's like more cod
MIKE alone the bank wants to give in the government has now like agreed to backstop it. But the loan maybe has gone out like that. There is a lot of people and I am hearing from them every day who say either I've I'm trying to plan. I can't that's happening, all over the place, but also said I applied and I'm supposed to have the money, but I don't write one thing for that is, I think some people are saying. Well, if I meet the qualifying criteria, that means I'm quoting courts suppose have the money right it, and this is something you know. Business owners may not be accustomed to exactly ripened like, as you know, in our in our welfare state. We have two kinds of programmes: we have entitlement programmes where, if you meet the criteria, you get the money and then we have programs, like section eight housing vouchers where you need to meet the criteria, but then you also need to get lucky to actually get in on it and more affluent people, I think, are not used to dealing with government programmes that don't have an entitlement type structure.
Right like if you qualify for the home mortgage, interested action or the charitable tax deduction or social Security or Medicare you just get, and if their I'm gonna hold up. It's a paperwork error, but this programme for small businesses is structured more like the way we do. Some of our programmes for low income, people, which has just because you qualify for the money, just because you apply just because you did everything right, it doesn't mean your necessarily going to get the money. There's. This prioritization struck so my understanding is that the money is in fact flowing out to small businesses. It's just that. It's not flowing out to everyone who qualifies because the budget isn't big enough and the first come first serve structure has not targeted the people who are in the most need, and so then there's yeah. There's. A second problem- and this will come up- is to try to figure out how to either give more money and we should say, there's a fight in Congress right now, where Republicans, while it's called a clean,
EL to give more money. Wrychester a bill that fills the same programme with more cash and Democrats have also want to give this protein money, but want to use the opportunity of passing and other bill too to give more money to hospitals, to state and local governments. Possibly do some other things, and so there's a fight right now in Congress about how do we offer through a through a or a bigger bill? Where Democrats are trying to use some leverage to it's an interesting we're version or inversion. I'm sorry of stimulus dynamics of twenty ten. Where were you then was Democrats. He, the White House and so like in theory, had responsibility for how they economy was going and what they want was more stimulus and Republicans were holding those built up, because what they wanted was no stimulus. Her less and now you have is republic until the White House, so it is their responsibility for how their responsible how the economy is going and Democrats are holding up the stimulus, but not because they want less or none, but still because,
want bore and bigger, and, furthermore, the money to say go to these underserved um. Sir or communities that have less of a relationship with commercial banking sector its end. An interesting dynamic, but is also part of whites being to get more money because it is being used as a cultural for some other things yeah, I mean it. It's a little hard to understand on some level why the Trump administration isn't stepping into just say, like look we're gonna give Democrats, but they want because, like what's that, once the downside to them, like hospitals, end up with too much money who cougars. So it's interesting on both sides ready mean Democrats are trying to to use leverage and then republicans have decided they want to join this political fight. In effect they don't they don't want to give em they want. They want to fight about this and say the Democrats are wasting too much
or hurting small business, with their demands for more money for sale, governments and hospitals, which I mean, I think the reason Democrats decided to use. Leverage on this point is that they felt Republicans would give in, which is also what I would have predicted, but it turns out it's sometimes hard to forecast what other people do in a negotiation. Well, Anima still happen where this is only running out of money today, but there's, I think, a bunch of big, interesting dynamics in here, but to focus on a weeds. He won all of this and we're going whether in the unemployment insurance context to recall some things have happened in the stimulus to where you had these programmes that had about your money in them or had at least in theory. The capacity for bunch of money in them They were really really screwed up by administration and how that money went out. The door not something you're. Seeing in this one that isn't that pretty that three hundred and fifty billion has come out the door that quickly, like that's pretty impressive and the some of US difficulty, it seemed that Democrats like
imagining a stimulus where you could like spend the money easily. It looks very odd from that perspective, but the thing that is happening here, which I do think is really important, and very much happened to the housing money on stimulus in two thousand and nine two dozen ten is the concern that the money will be seen as having gone out fraudulently. Small business. It isn't. A small business in other programmes to a big business had ended up doing something bad with money or closed anyway. Is creating The distortion and like what you want to do is get the money out the door as quickly as possible and quite vulnerable businesses, but by their very nature, moving quickly means? You can't do that much oversight on it and vulnerable businesses- maybe just have worse relationships in a systematic way with the banking system and so you're missing a lot of them so money that was supposed to be there to help. Does it go out themselves very much it things at the harp programme housing where there were
money there to you is end. Some of this just goes to the Obama administration. I using authorities aggressively you should have, but they got really caught up on this idea of preventing fraud, because they were very worried about the politics of like the wrong people, home etc getting getting the money in the Republicans, attack, attack them and so on. I do think it's some of that same thing here and one one place I think I tried disagree, but with the Democrats is they ve been there very focused and yet why they are, but on watchdogs, end and so on. You did great interview mad on on the weeds, less weaker baby earlier this week with, does one other folks who is leading the the watchdog of the bigger business loans and in the stimulus and ass, if I was a little bit glad to hear that this position was largely powerless, because I I think you want to get the money out and if some of the wrong players get the money like so be it assuming, at least it's not. You know just Donald Trump's personal business the buddies and- and I guess we'll see, but a party, the small business side. If anything, I still think there's too much
me still and writings. The banking system just means that if he were a business that was not taken out loans or couldn't take out loans or like have the relationships you're not getting its has always tension between how much You do oversight and make sure you're like keeping watch on the money and how quickly the money can get I can get out and to whom and I'm not sure, they're falling on the right side of it right now. This isn't what I'd number of sort of arbitrary cut off point, a right which is like one is to qualify for this money. You have to have fewer than five hundred employees which unite the ok. It's a small business people feel sentimental that small businesses, but have you see a business with four hundred ninety eight employees and a business with five hundred three employees? They don't like operate in
different universe spread like those are two very similar businesses. I mean they're supposed to be a programme for mid sized businesses beds, a completely different sort of treatment. The other thing is that to try to emphasise that this is about protecting people's jobs. The requirement is that seventy five percent of the money needs to go to payroll, and I can see in some conference room somewhere why that seemed like the right way to structure it, but you can have a business who you know they have high rent right. You are operating a restaurants, have been sort of the canonical small business that people think about here, but if you have a relatively new restaurant, you probably have a lot of interest on loans. That's how you launched the restaurant. You have to pay rent to the person who owns the the
and if those expenses are of large fraction of your business, you gonna go out of business and people are gonna, lose their jobs. Right saying: well, the money has to go to cover payrolls rather than to cover other expenses. It doesn't. It doesn't really add up, because if you the pay, the rent you have to your off your anyway and anyway would actually be better to lay off ten percent of your staff, but keep paying the rent and keep the other ninety percent on than to have the whole business go belly up right. So it's one problem that I think you always get into what sort of getting mania, which is that it's hard on a really really fast timescale to design targets that actually hit the goals you it, and you see this in the individual checks right where they wound up deciding that the sort of two hundred dollars
tax needed to be means tested, they wouldn't go to people who quote about don't need the assistance, but the only records they had were people's two thousand and eighteen income tax returns, but your two thousand and eighteen income tax return has very little to do with your financial circumstances right now. You know, like dentists, make a lot of money normally, but their whole businesses are completely shut off, and now they don't get stimulus money on the theory that they have eyeing. Terms, but that high income ended eighteen months ago. So get you. You see a lot of that kind of thing in the programme design, but it really doesn't Some of us all come back to the fact that, like he's, only much money to go around, you know like, even with all the limitations on who was eligible for the small business, he ran out of money really fast and I think, on some other. What they need is just more money I think, probably right, but I do want to see it open up. I mean, I guess account argument, and I've heard from a number of economists is that you want
be directing this money to the businesses with best chance of survival, and that's a little shy Turkey, because on the one hand, then you might Poland a bunch of businesses, you don't really need the money and peep I mean that seems wasteful of people and on the other hand. I get why you don't waste money on businesses are not chemist, arrive as one or the other, but also given the alternative people going on you wise, you can be backing up peril anyway, I'm not sure how big of a difference is here really yeah I mean Congress works in mysterious ways right, and so they, the dvd this up into a few different parts and they do so Well we're going to have some money to enhance unemployment insurance. We have some money for a business support and then we're going to divide that between big business's medium businesses, small businesses, we're going to do this, that the other thing and they didn't totally think about the interactions between this stuff Fraid. So the unemployment insurance programme is designed to be very generous and that does have an entitlement structure,
there's a cost estimate for you. I, but, however, many people are eligible. They all get the money and so give in that They made unemployment insurance more generous. The cost of keeping people on the job is quite a bit lower than it would be under ordinary times. Because, if you are paying a business owner to keep me on payroll that costs money but if he lays me off and then I apply for unemployment insurance and then I get enhanced benefits that also costs the federal government money so and we have to do the math right, but in some cases is actually quite a bit cheaper for the government to keep people employed. To pay the unemployment insurance benefits and I feel like when they were designing the business loan programs. They didn't think about that. It's not obvious,
Did you actually save any money at all by being sort of stingy, particularly with low paid retail and and food service workers, and I just as far as I know, those two provisions which is negotiated on completely separate tracks and I dont know that they realized how they were going to interact with when they put it together, but I mean I would definitely say that like when they come I mean Republicans have asked for a clean bill with more money for this thing, but they haven't asked for enough money and, in my opinion, like this, you just like all the money should go into this because Not only is people losing their jobs, terrible, but the bunny mice up getting spent anyway. I guess by good place, to take a break in the talk about: what's going on with unemployment chance, if you're, gig worker or self employed. There's some good news about PPP loans. You might want to consider millions of some
employed workers may qualify for up to fifty thousand dollars in one hundred percent forgivable loans. You might be one of those millions as the leader ppp loans. Womply can help you find out they've helped over three hundred thousand and small businesses across America get a ppp loan. Funds are limited, so apply now at Womply com, com, VOX and see. If you qualify for a hello that's w. Oh, I m p l why dot com, Slash veo ex wobbly not a lender terms and programme rules, apply it Last year's taught us anything. It is that we do what will happen next, but there's one thing we can all be sure of the only future, one. We can all share and leading the charge, In building that future his mercy core with over forty, if humanitarian work under its belt building together is a mercy course DNA and as the climate, This increases their partnering with those on the front lines making resources more accessible to farmers across the globe?
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IRAN, widen from organ and Senator Michael benefit Colorado because they negotiated into this? As I understand it, this six hundred or boost for lower income workers, which is, I think, one of most important pieces of economics of our policy in many many years and has made this a lot easier and people than it otherwise would have been, but like the way the Small Business Loan program is being done by the bank. This is being done by the states, and so the quality and the ease with which you can apply for unemployment insurance really depends on what a state has been doing for some time. Now, and so there are states that have worked hard over years to make it easy to apply for you, I right they believe they, like the point two of like that part of the government is, if you lose your job. You should be able to get you why and they want to make it as easy as possible and then their states that are the exact opposite view of Florida, for instance, is one of them political article about a week ago. Talk about how
the previous governor, who was republican, they constructed you I'd, be really hard to access, because the idea was it went to these. You know undeserving poor right. You wanted. You wanted to be only will really needed at and the way show you really need it is to go through these horrible, endless hoops when you already are trend of feed Children and look for new job in everything else is unbelievably cruel. Normal times, but now furdest freaking out, because they made you I really hard for people to access. It turned out that Republicans and Ford over people also, and they were going to need you why you know couple years later, and so now the system is in a really really bad shape. In addition to that there, of income and everything. It's really really difficult. If you put a lot of paperwork on top of it to get stuff going out the door cook enough him, it's not like every state staff, W. I office and rebuild its entire UAE application architecture in it
of a of a surge bigger than anything. Since seen since great depression I mean of All that a lot of he's. U I programmes, they actually run cobalt, which is? Basically, I don't want exactly call it an obscure programming language, but it is an old programming language which relatively few people programme in now, and so what is built on top of it is buggy it is crashing. I mean the stories of people just trying for days and days hours and hours and hours to try to get the Ui site to load and to load and not, crashes right, whether at the end of the application is horrifying. So will you, as you. I programme that is really really importantly well designed on some level, but in terms of who is to administer it. It is varying dramatically by state and particularly in states. It is spent years trying to make benefits hard to access it. Very, very, very hard to access. Yeah mini is worth you know, describing some of that. This sort of man sepia One, is that the this scale at which people are claiming benefits is completely and president right. So the
previous sort of biggest week for unemployment. Initial claims was back in nine hundred and eighty two, this is often reported as seven hundred zero people filed claims. That's a seasonally adjusted number. The real number was higher. It was about a million in raw terms, but we had one week of over three million. We had two weeks of over six million, and now we just had one week of over five million. So this is a process where there is actually to human verification of unemployment. Insurance claims is the way it works in most states, and you are having just a you know. It's like a four sigma event week after week, after week nobody is staffed to process. This many claims this quickly. It was not in vision.
At all. And then you have this this technical debt issue, which is that state governments they need to balance their budgets every year and governors and state legislators. They liked to put money into things that people will see Ben it's for right, like if you open a new highway interchange, you can say ah or if you give your teachers arrays Skinner then like you could get an endorsement or if you do a property tax cut. People will be happy that you, their taxes to say I am going to hire a consulting company to write us a whole new Parallel unemployment insurance scheme has written in a modern programming language so that in haste the system breaks in a hypothetical future surge of claims. We will be written with up to date, code with no technical debt that we can easily modify like. That's us not up, not a winner. You know, that's not her. That's not the kind of thing that that sounds like a good
here too politicians should they ve accumulated this incredible amount of technical dead. Then, on top of that, Congress does I did too greatly expand the number of people who are eligible for the programme right. They wanted to freelancers gig economy, people a bunch of stuff that I think progressives have like thought, abstractly for a long time, we ought to do they sort of put into this emergency measure, which is a good idea. Aids is helped a lot of people, but normally you would give states a lotta lead time and something like that too. Like work it out like how are freelancers Gunnar apply. Instead, they ve been told to just like do everything fast, ass, fast, ass, fast, and would you sing and so many cases that they can to actually do it? And we really don't get, have a great sense of how many people are getting their unemployment insurance money and at that's a problem I mean it's a promise. People,
we needed to get by, but also when you talking about the economy right. If people lose their jobs and their income falls off a cliff, then they can't spend any money and then nobody else, and come in, and we seem to be seeing a lot of sort of secondary economic damage happening in the retail sales numbers that you know what things that are? Foresail people are not buying, which is understandable because millions of people are losing their jobs every week so like, of course, they're not like you know, shopping for chairs yeah it's about the situation the end and that when I'm not sure converse knows how to fix it, we might just be an lag period, but it isn't simply that they can cut the requirements because he stopped. Be able to apply on your state Ui office, so it may may just take a couple weeks till this all gets up and running, but I do want to note as a very big picture thing here, that one thing you're, seeing is that the way the sea
de net is administered in this country, practically the parts of the safety net administered the state by state. There is often a lot of cruelty in it. There is a lot we make people jump through tremendously high levels of paperwork, and you know test and they have to show that they're doing this or that and they have to come in and fax, this form in triplicate. There's a bunch of things here for Ui where people have to fax something in but if you don't have a fax machine, where do you go to use? One right now like Kinko's, is not open and these were done consciously. They were done to humiliate dissuade poor people unemployed people from using, programmes they were done by governments they were told by the fat, government to execute like a social safety net, Well, they didn't want to- or they didn't want to at that level, and so they tried to make it hard to access and right now. What you're seeing is people who were not meant to get caught up in that, like incredibly cruel traps, of humiliation are getting caught up in, it
their upset and they the political power to be heard, but this product, you're, getting a tastes like millions and millions of people getting taste of how we treat poor people in this country every single day like how doing it for years and often much worse right and when they complain, nobody cares, and I I should plug the weeds Epps, where we have done one hand and PAM heard on talking about their book. Administrative burden, which discusses this sort of general phenomena, and I think they have also done a good or a bad. You know bringing their research work into this this crisis in the way that the measure was talking about their but yeah me get up the point, you'll see if you, if you listen that episode or read their book, but it's it's really much better to wasn't a pipe casts. Then read books
except for me and Ezra books is that this is quite general. General aspect of state government in the United States is that they sort of want to give people help only if they absolutely have to right there's an idea of like type one versus type. Two error and I can remember which one is which, but we choose. I mean, particularly in the more conservative states, to always err on the side of not helping people who need help. Rather than letting like any one person who doesn't really need it can slip through the cracks and it comes to bite ass when there's a big national emergency? And it's not just a question of chair I mean, although it is that, but it's like the economy needs money to continue to flow. Even though many businesses are shut down or many people don't want to patronize certain kinds of business
and that requires like stabilizing national income and the only waited. That is to hand money out relatively freely and we're just not set up to do that as a country. It's not political culture and its on how our institutions work critically, I mean the whole reason so much of its money flows. Do you. I in the first place, is that that is a programme that, like exists, wears a lot of other things, don't but it's administered in a very patchwork way, and you know in particular it is just not not set up to be sort of user friendly and that's by design A failure? I want to talk about some ways to fix it, but before we do, I want to mention some of this is being administered federally, in particular the new two hundred dollars stimulus check program, but those checks are being delayed because Trump One to make sure that every single one of them berossus personal signature, not that here,
assign them individually, but in a way that has not been done before when the government sent you money. I it's gonna, be like this. A Czech like not from me government or the treasury, but from Donald J Trump to you, which existed some level like that politics? send in the stimulus they had these, not very effective. You know little signs. It said this is brought to you by the American Recovery ACT, but to delay the check, so he can put his name on them and get political benefit of it. It's also perverse and the fact that he might get political benefit from doing that is very perverse again. I don't dislike outside that. The rules of attacks on back enough pounds. Table over it, but like people are hurting because he wants to put his name on more stuff like. I should think, though, the idea that people would forget the Donald Trump its president, if his name was in on the Czech seemed a little bit a little bit odd to me, because I will do work on actual partisan difference. Is that when George W Bush was president- and they did
a kind of stimulus programme that it was different from this direct crash. Ganz buddy. Meant to be a broad disbursement of money to people as so, he wanted to like make a big show of the fact that you were getting a check, and this was your stimulus, tech. He didn't put his name on it because I think he felt and his critics also felt that it was obvious that he was the president right in that. Like anything that was like here's, the money from the government. People were not gonna. Forget it was him, then, when a bother with president, they had this like Conquer Mamie theory. That casts unseen, I guess
up when they will be better to try to trick people into not realising that they were getting stimulus money. So it was designed to all happen through payroll withholding but like that was considered the boundaries of like crossness versus classy policy, making the idea that, like you, would have to like right on it, like I'm Donald Trump, I'm the president. It just like everybody knows he's the president. I think it typifies sum of trumps lack of thinking clearly about this whole crisis, which is that you know public relations is an important part of politics, but, like far and away the best. He could do to secure his re election at this point is to have the country be healthy and prosperous. This fall at which point he could do a lot of rallies and tv adds where he's like man everyone's. Really well- that strong account
We, the strong labour market that existed before this head, like that was really good for trot. You know just like substantively: I'm he didn't need to like sign things and the the focus on pure pr stuff here is like a good way to think about. The problem fear Donald Trump, and I wish you would reconsider. Let me begin argument here from both directions, which is one I disagree with what you're saying there in terms of like the crude versus classy and people, know Donald Trump as the President. I think something done trump is always at in his career is recognizing that there is a margin that other People will not go to because they feel will accrue, it would a ghost they would be criticized. The media would call them a name and so like he will go there right, like he willed seem like like the cow, or could serve a rich guy because he wants build and always a rich guy. We're like a lot of other rich guys like tragedy. Down not up. They try to have a more modest step,
of their home rather than making their toilet painted in gold or covered in gold or whatever the hell is happening with toilet and what Trump is always stood actually. Is that being unbelievably crude and obvious? Is actually helpful in establishing a sense of yourself as and as an architect and then icon and the Bush checks, which I agree were more obvious than the Obama sort of weird behavioral economics stimulus, nudge. I think it is broadly a correct idea, that, like literally signing your name on the Czechs, will help establish in people's minds that you did this thing You were doing something that, when you're doing that, like press conference every day that you get this check and its from Donald Trump, like not the government, not the Congress, the flip side of it, which had it goes to a second. What would I do think is correct. Is that what this all does? Is it pies tromp more decisively to the response, and so what people feel is the economy class?
next and I got- is lousy. Twelve hundred dollar check the fact that his name is on it. The fact that he is doing so much to own. It actually goes to show that he always responses they like. Oh, that was congresses idea like I could get what I want it from that, like put put your name on it dude, and so there is it like it is. Never continuously true that the best thing he could do is I actually have all this work, which doesn't seem in any way to even have a view of what it would mean for it to work. A very striking thing to me about Donald Trump in this is that a person and know a lot of people who are like involving I think about this response, everybody, I know, is obsessively trying to think about like what the end game is here and how do you get to it and he does to me in any way appear to have a theory of that, be it of public health theory and economic theory like anything like you wanted to end any thinks it is somebody else's job. As far as I can tell the end, it end fact that he does not exceed to know what the ideal outcome would be, that he can't get Congress to do is wrong
a very striking to me, but putting his name Everything I think is like the one way could really backfire. Like those checks. Popular. It will be good for him to have his name on them and they will probably popular in the first instance, but if they like, if the overall response is seen to be lacking, the degree to which he tries to preside over it, despite actually not being not involved in its construction. He's like preside I was having he doesn't really understand and on some level may not even truly support if he did understand it and like that mean good idea. You I mean oh, it is also worth clarifying that in most cases, people are not going to be getting these from the government at all. At some, most people will get their money through and existing direct deposit relationship, they have with the IRS or possibly some other government agencies. Have you get like God S, eye or such like that? Do through direct deposit
that the Czechs are a little bit of that of an edge case. This may not be what actually happening to you if you pay your taxes, which would or get your refunds with the direct Bosnia, but it's I mean it is speak to trumped sort of lack comprehensive engagement with this other. We also wonder about Congress like everything that they did. He ere, I don't, understand why why it is limited in the way that it is. You know the and in particular that that the twelve hundred dollar check so, firstly, means tested it out of a fear that an might person might get twelve hundred dollars. But who cares? They also kids get less than twelve hundred dollars, which I also, but I don't know why it holds down the overall cause, but also its a one time check, rather than a stimulus program that goes forward further for the duration of of the crisis,
and I think, that's fairly good time to take a break and talk about automatic stabilizers support for this episode comes from visa, helping, you rethink how you drink We're visa is a web based program that works by helping you notice the negative thought patterns. You might experience in your relationship to alcohol and then you the tools you need to break those patterns rooted in hundreds of behavioral therapy for veto is designed to help you prepare for the future. By arming you, with techniques to help you during class, it's totally private ones, percent web based. So you can act. That from anywhere you can visa risk free with sixty day money back guarantee. Now at U S, daughter
or visa dot com. Support for this episode comes from America's leading beverage companies who are working together to reduce plastic waste in our environment. Not all plastic is the same. America's beverage companies are carefully designing. One hundred percent recyclable plastic bottles, including the cap's their bottles, are made to be remained, and they are investing in community recycling programmes to help get more bottles back, so they can be turned into materials used to make new bottles that completes the circle and reduces plastic waste. Please help get every bottle back, learn more at every bottle, back dot. Org automatic. Stabilizers is an idea that, like exists in macro economics and enormous, refers to the fact that, because it progressive income tax and because there's a welfare state
economy goes into a downturn. You get a certain amount of automatic stimulus, more people go on food stamps people pay, lower taxes, more people, get Medicaid benefits, whether private insurance and that sort of helps stabilize the economy and then what can we say about the United States versus Europe? Is it because we have a smaller welfare state and lower taxes? We less automatic stabilization, a need more sort of one off fiscal stimulus to sort of help, keep things going been proposals kicking round. I did too two views on the weeds with people who wrote chapters for the Hamilton projects Report, which they called recession ready, which was about bolstering automatic stabilizers in the United States, and you know I was not optimistic that Congress would do that. For no kind of reason, because legislators tend not to act in
dissipation of hypothetical problems, but I had kind of hoped that, like once this crisis hit that they would write some automatic stuff into their fiscal response, and they just haven't done that and it's it's add both, because I think over the summer people are going to need a lot more help than Congress is appropriated, but also because Republicans have this kind of unfortunate. Of changing their mind about budget deficits very very sharply based on who is in the White House, and it's very likely A by demonstration is not going to be able to get any republican support for it measures if it's needed so like now is the time for Democrats to safeguard a potential two thousand and twenty one recovery, but it's also the time for Republicans to make sure that, like in the fall, if more people need more money, they get more money yet
to be is a strange dimension a bit, because there was willing astronomical to do this? If you look at that Brown Bennet Booker Bill, that was to be the best of the different. You know. Basic income kind of economic support, pills had triggers in it, and they were, I believe, their unemployment triggers. And so Democrats we are open to doing this. Republicans should very much want them to do this. So you're, seeing right now for Republicans are having trouble getting this small business fund replenish, because Democrats want other things and others have been great care right now, the other things they want are very popular things: to want money for hospitals, money for state governments. So, It's not obvious to me who will win the showdown it's coming here, but, as it, goes on and Donald Trump becomes less popular, and I should note that due to get support for the political dynamics a couple weeks ago, we were seeing go Donald Trump at its highest ever rating and gallop, and doesn't that show that what he's doing on current viruses working it- and I was saying like wait like give this
like let the reality catch up with the pulling here, or vice versa, actually and sure enough, like here today he's had his lowest number in a long time. Forty three percent with fifty four percent disapproval- and I think it's only gonna continue getting worse. So Republicans, you're gonna be losing political capital. Rapidly as Donald Trump gets less popular as the election gets closer as Democrats become more focused on that like if they want to have any chance of not having a lot of stimulus fights blow up into this. Like Democrats, it high level conditions that, yes, would be stimulus, but Republicans for various ideological reasons don't seem to want to give in to like now is the time like get things triggered and recycle leave it
This is a weird example to be of people not seem to follow their obvious self interest way, and I mean I think this sort of the flat checks is like it's such a good idea like just give the money to every body, regardless of income. Given equal amounts, regardless of whether Europe an adult or child or a non minor dependent in surviving this weird distinction and no, I don't know reasonable people can disagree about what the objective trigger is but build something in rights that you say, look if I'm wrong and the economic situation is away worse, put the money out and if you're worried about the interest rates like you can have an interest rate trigger into and say if unemployment is above such and such an interest rates are below such and such everybody gets the money. But if the deficit is a bigger problem than we thought
the economy is better than I thought. Then they don't like it's a this a lot. You know you can argue about about like exactly how big should the checks be exactly? What should the trigger B. But the idea that you see in Congress that its both like what we can come back and fix that later, if we need to but also we're going on recess until May and so when we agree that we need to expand the Business Lending programme? We're can have gridlock anyway because have a disagreement about hospital funding. Like that's the reality of Congress, you know is like oftentimes. They cannot in fact act in time. The manner and they're always reasons for that, like you can be like a congress or these politicians, they all suck arbiters real reasons. Gridlock keeps happened.
So when you have a moment of agreement, is a really good to build autumn atrocity into it. The other thing it's great about autumn intensity is it helps you avoided these administrative problems that were seeing right when, if you get people together and your like, ok you're forty eight hours to design a brand new programme from scratch, like that's, really, that's really freakin heart like even when smart, well, meaning people work at it like it's just too. Plunging and so making something that you set it up once and use it forever, is so much smarter than like waiting for crises and trying to come up with solutions and fly. I that is all correct, I think, is a good place to end all right. Let's, let's do better next time, America and United States Congress. You know we're out their trainer best. If you ve got any more great ideas for automatic stuff left, An email I weeds advanced. I come check us out in the Facebook group was
discussions there thanks Ezra thanks to our producer, Jeffrey GUILT and the weeds will be back on Tuesday.
Transcript generated on 2021-05-19.