The Crisis on Campus Is Here To Stay

The Covid-19 pandemic has forced American colleges and universities to shut dormitories, cancel sporting events, halt graduation ceremonies and shift lectures and classroom instruction online. This has caused unprecedented disruption to institutions that are averse to change in the best of times. As the economic crisis deepens, higher education will face even more serious problems, which are likely to persist even after the worst of the public health dangers has passed.

The vast majority of colleges and universities, both public and private, will soon face a shortage of two key sources of revenue: foreign students and students paying high out-of-state tuition rates. The crisis thus threatens the financial model that has sustained many schools and will force some to downsize, cut programs or go out of business altogether. These developments will be bad news for American research and development, and also for the many towns and cities that rely on universities as engines of economic growth.

To understand the dynamic that will be set in motion, let’s start with parents. Most still wish to send their kids to college, and indeed they will. But consider their calculus in more detail. At this point, we cannot be sure whether there will be a true fall semester in the traditional sense. Even if face-to-face classes are held, will the school of your choice still offer exciting dorm life and that wonderful football team? Maybe not.

Incoming students are required to leave deposits for tuition and dorm room and board in advance, sometimes as early as May 1. It’s already the case that most schools have kept room and board (and tuition checks) for the spring semester and not issued refunds. As a paying customer, why take this chance again? We should expect to see an abnormally high number of students take a gap year, which will deprive colleges of tuition revenue. And that’s happening when higher education was financially ailing to begin with.

The decisions of American families also will choke off out-of-state tuition revenue. Note that about three-quarters of America’s higher education sector, by enrollment, is state schools. The out-of-state tuition rate is the real cash cow of American higher education, and sometimes it can approach three times the in-state rate. Schools’ reliance on out-of-state revenue is going to take a big hit, as it was premised on a degree of individual geographic mobility that simply does not exist right now and may not be restored anytime soon. (...)

Another problem will be the plummeting enrollment of foreign students, who typically are paying out-of-state tuition rates. An increasing number of U.S. colleges and universities have relied on Chinese and other foreign students to balance their books, and this revenue stream is about to dry up. It seems unlikely that immigration and student visas will, by the fall, be at anything close to a normal level, and in any case travel and study plans need to be made well in advance. Even Singapore and Taiwan, which have done some of the best jobs combating the virus, are mostly keeping their borders closed. The foreign students already here will remain (though some will not be able to continue to pay tuition), but the incoming flow is likely to turn into a trickle. Once the cohorts are broken up, and foreign students opt for alternatives closer to home, the future might evolve along those lines. The University of Rochester, with about 27% foreign students, will find this adjustment especially difficult.

As the quantity of available students declines, so will their overall quality. Schools will try to cannibalize students from other schools, in part by lowering standards. Recently the University of California announced it would process admissions without requiring their usual standards of testing and grades. That was presented as an act of great generosity, to ease the work burden on applicants, and indeed it is. At the same time, it likely will pull many students away from lower-tiered schools. Maybe a year ago you could not have entered the U.C. system, but now you can. So why not take advantage of this upgrade in your options? (...)

Given the scale of the problems facing higher education, how should policy makers and colleges themselves respond?

First, we should accept that debates over higher education will never be the same again. Only a few months ago, the idea of making four-year college free for all was a major idea in the Democratic Party, endorsed most prominently by Bernie Sanders and Elizabeth Warren. The notion was that state governments would step up and fill in the revenue gaps from the loss of tuition revenue. I don’t think that was ever a practical vision, but it is now beyond the pale, given all the pressures on state budgets. It is a bit like arguing that restaurants should move to zero prices, and we will make up for the revenue difference by having a more active fiscal and loan policy from the federal government.

Instead of debating free college, the federal government should grant a new round of stimulus to state and local governments, as that at least will tide over many colleges and universities and give them time to adjust to the new circumstances. Those funds cannot make up for lower tuition revenue for more than a few years, but they can allow for an orderly shrinkage of many institutions.

As for how campuses operate going forward, most schools will try a hybrid model of mixed in-person and online options. If a student doesn’t want to come to class, he or she can do all of the work remotely. Older faculty will be given the option of paid leave, but having to teach more in the future, or teaching online. The creation of more online sections and classes will drain students away from the classroom and allow for a reasonable degree of spacing and social distancing. Some classes will be held outside in tents or under the trees. The dorms will be largely empty, though some foreign students may have no other choice. Many more students will have to live off campus and also bring their lunches. The level of stress will be high at first, but humans are capable of adjusting to many strange situations. The students who most want to learn will respond by working harder on their own.

Professors like me will need to adapt as well. My fall semester teaching was assigned to be online even before Covid-19 came along. The enrollment for that class – Principles of Economics – will be much larger, with hundreds more students, but with some assistance, I expect to handle it. Students will have the flexibility of doing the work and listening to the videos when they choose, and not having to show up in class. As for meeting with students, there is Zoom and also the 10-foot distance across a long park bench, at least until the cold of December rolls around.

In the longer run, the induced restructurings might give higher education some new pathways forward, including with virtual options, as we already are seeing. Schools will have to learn how to market such offerings to large public audiences, much as they currently do with their athletic events. That will mean truly global competition in the higher education arena, as networks of learning and instruction, as well as seminars, are opened up to everyone, or at least to paying customers.

by Tyler Cowen, Bloomberg |  Read more:

Image: Adam Glanzman/Bloomberg via Getty Images

Otis Redding

Palaka: The Hawaiian Denim

What is palaka?

What it is changed from the cloth to the pattern and with the Issei (original Japanese) it meant exactly a woven checkered pattern of dark blue and white like their summer kata’s were made of back home.

Palaka’s definition is an ever changing one and that gives it a home in many Hawaiian’s hearts, but the conotations of what palaka is and means are ever changing.

The pre-Hawaii Years

According to research by Alfons Korn, a retired UH English Professor, palaka dates back to the time of King Kamehameha the great, when explorers were infrequent visitors to Hawaiian shores. The pattern made it’s way in the late 1900’s when Americans ordered tons of checkered-patterned thick cloth from England to make the uniforms for the field workers. Originally a pattern type in England for the sailors, it was seen as plain and therefore cheap. The cloth of Nelson’s navy and Yankeedom’s clipper wasn’t known by any name until the Hawaiians and Issei (first generation Japanese immigrants) named it after the Hawaiian work for ‘frock’ which was also a mistranslation for “checkered.” Interestingly, the sailors decendents moved to New England and a popular style of furnishing cover can be found in much of the local upholstery.

Peter Youn Kaeo (1836 – 1980), an inmate of the leprosy settlement at Kalapapa, reported in a letter to his cousin Queen Emma, dated November 4, 1873, that he recently visited the settlement store and there bought several yards of cotton twill “to make me some frocks palaka” this is the first known use of the word palaka to describe the style of clothing: Short cuts with no tail and meant to be worn outside of the pants.

Remember that at this time, people were still wearing top hats, so imagine how laid back Hawaii seemed when you had no intention of even tucking in your shirt. The workers began to wear the cloth knowing that it was a white people invention, however unaware of how that would soon change.

The plantation years (1885 – 1941)

At one point, Hope, in his book, estimates that nearly every single man, woman and child in Hawaii wore and had a piece of palaka clothing. It’s hard to imagine because today the closest thing to that saturation-level is the surf shirt. However, the surf shirt is made by many different brands with multiple colors and cuts. In that sense, we are just talking about surfer themed T-shirts, but with palaka, everyone had one and they were all the same color.

A young man by the name of Zempan Arakawa, saw a need for the workers to find cheaper and faster pieces of clothing. He saved up $5 to buy a sewing machine and began to make different styles of cloth. His store began making a majority of the long sleeve work shirts out of their Waipahu store.

According to the 1932 Industries in Hawaii survey, palakas, “have their place in the wordrobe of every islander. — Boys and girls wear them to school, to play, to football games, to parties, the younger set war them to house parties, to coctail parties and beach parties; and one of Hawaii’s most charming matrons, going to the mountains on her honeymoon, wore a palaka with riding breeches and boots as a going-away costume at her wedding.

Palaka began to dip into popularity with the advent of the Hawaiian shirt by Musa-Shiya Shoten Limited, on South King Street which began advertising the “radiant” colors and freedom of the aloha shirt.

This is also when the largest and most well-respected mass-producer of palaka clothing emerged. Goro Arakawa was just a baby when he remembers people in the village begging for the repairs and custom palaka clothing from the end of the Arakawa’s family sewing machine. Up until its closing in 1995, Arakawa sold thousands of palaka clothing and mainstreamed the use of different colors. It is for this reason that he is both reviled and respected in the Hawaiian community.

Margaret S. Young in an open letter to the Honolulu Star-Bulletin in 1980, remembered when everyone she knew wore a long-sleeve, dark blue and white palaka shirt. “We wore them, long sleeves and all, for picnics and hikes.” she said

The Silver Screen years (1945 – 1960) 

There was a time when palaka was as in demand as the aloha shirt to tourists. According to a transcription by Bob Ebert, a photographer who took pictures of the Hawaiian clothing styles over the years, for a time palaka’s authenticity was just as appealing as the bright and color saturated aloha shirt.

“I don’t know what they called’em, was part of the uniform and the aloha shirt, every tourist that has ever come to Hawaii usually ends up with a shirt or wore one.”

According to Alfons L. Korn a researcher for the book, “Hawaiian Shirts: frock, shmock-frock, block and palaka,” palaka was already riding its second surge of popularity in 1950. palaka was thought of as a standard piece of clothing and patterning too closely associated with field work for the younger Hawaiians; and the popularity of the aloha shirt in Hawaii in 1930, meant that after hours, workers would change into their aloha attire instead of a palaka-styled cloth. While in the fields, palaka was being rejected in favor of overalls and jeans since it kept workes more protected. But, palaka would become popular once again after it became associated with one of our nations biggest tragedies.

Pearl Harbor brought a greater focus on Hawaii from Hollywood. Moonlight in Hawaii (1941) or Hawaii Calls (1938) were just a few examples of movies that were made to captialize on Hawaii-mania. There were movies that capitalized on the war (“From Here to Eternity”), musicals (“Blue Hawaii”),. and multiple movies that encouraged people to, “go Hawaiian” just like Gidget (“Gidget goes Hawaiian”). 

With these movies, Hawaii began to move away from being culturally represented and move closer into the realm of fantasy. The wave began in 1938 when the first photo of a man wearing an aloha shirt was photographed for Pardise of the Pacific. Soon after, movie stars began to wear the fad. By 1940, officials of the Territorial and City and County governments were allowing their employees to wear aloha shirts, at least in warm weather. These would be one of the first death-nails into palaka’s reign as the official shirt of the Hawaiian kingdom. It’s appeal was beginning to be eclipsed by the aloha shirts appeal to both tourist and locals both due to its fresh style as well as rayon being cooler than the thick draping of cotton from palaka.

by hawaiipalaka |  Read more:

Image: uncredited
[ed. I grew up next to the canefields in Waipahu, and we did all our shopping at Arakawa's. The best word I can use to describe the store is "overstuffed". It was fun going there and just looking for treasures under all the piled goods (you had to really do some digging). I don't remember palaka being anything special, it was just what everyone wore in the fields back then.]

A Gentleman in Moscow

Beyond the door of the luxurious ­Hotel Metropol lies Theater Square and the rest of Moscow, and beyond its city limits the tumultuous landscape of 20th-century Russia. The year 1922 is a good starting point for a Russian epic, but for the purposes of his sly and winning second ­novel, Amor Towles forgoes descriptions of icy roads and wintry dachas and instead retreats into the warm hotel lobby. The Metropol, with its customs and routines, is a world unto itself.

For years, its florist adhered to the code of polite society and knew “which flower to send when one has been late; when one has spoken out of turn.” The barbershop remained a kind of Switzerland, “a land of optimism, precision and political neutrality.” As post-revolution scarcity set in, the chef of the upscale Boyarsky restaurant worked magic with cornmeal, cauliflower and cabbage, while the Shalyapin bar offered candlelight and dark corners so Bolshoi dancers could sneak a postperformance drink. In the lobby, politicians whispered and movie starlets swanned across the floor, dragging recalcitrant borzois on their leashes.

Towles’s novel spans a number of difficult decades, but no Bolshevik, Stalinist or bureaucrat can dampen the Metropol’s life; World War II only briefly forces a pause. A great hotel is eternal, and the ­tidal movement of individuals and ideas into its lounges and ballrooms is a necessity for one longtime resident. He’s not difficult to spot: a man who enacts a set of rituals and routines, grooming and dining, conversing and brandy-drinking, before ascending each night to his room on the sixth floor, which has barely enough space for his Louis XVI desk and ebony elephant lamps.

Count Alexander Ilyich Rostov — a member of the Jockey Club, Master of the Hunt — was already ensconced in luxury in Suite 317 when he was sentenced to house arrest in a 1922 trial, condemned for writing a poem. Saved from a bullet to the head or exile in Siberia because he was deemed a hero of the pre-revolutionary cause, he has been forcefully installed on a new floor. But Rostov is an optimist: The cramped room will at the very least keep him away from the Bolsheviks below, clacking out directives on their typewriters. He bounces on the bedsprings and observes that they’re creaking in G sharp. When he bangs his head on the slope of the low ceiling, he announces: “Just so.”

Rostov is an aesthete, an intellectual who will maintain his resolve by committing to the business of practicalities. Yet even with this aim, the walls begin to close in. As he climbs the 110 steps to his room, he can’t wait to descend them again; he has begun, early on in his confinement, to be “threatened by a sense of ennui — that dreaded mire of the human emotions.”

What is a cultured man to do? Suicide is an obvious choice. (Just so!) But the Metropol won’t let him simply drop and splatter from its roof. Towles has an educational scheme for his protagonist: If the hotel contains the world, Towles assiduously offers pleasures and lessons, room by room, as a reborn Rostov bears witness to his era.

Solzhenitsyn this is not. The frost gathers outside, but the book proceeds with intentional lightness. The tone is generally not far removed from the Fitzgeraldian tributes of Towles’s first novel, “Rules of Civility.” The book is narrated not by Rostov but by a hovering third person, sporting what seems to be a permanently arched eyebrow, who occasionally ­lapses into aristocratic fussiness. Wonder abounds. Secret panels open. A former juggler reaches out to grab a falling torte just in time. One-eyed cats look away at crucial moments. Although its style is never overbearing, the Metropol is imbued with a sense of idiosyncratic wonder. Listen closely and you might hear a Wes Anderson soundtrack playing down the hall. We’re not in the Grand Budapest, but more than once I imagined F. Murray Abraham narrating a long, panning shot. (...)

What happens when a novel centers on a character so capable, so witty and at ease in the world, even as that world convulses around him? Rostov has a portrait of his long-dead sister on the wall of his room, so it’s evident his life is anchored in pain — Russia is pain — but he remains untouchable, built to outwit the system. Part of the problem is that Towles repeatedly invokes the tortured, challenged, hand-wringing, deeply human characters of Russian literature. In contrast, Rostov seems destined always to succeed.

Towles is a craftsman. What saves the book is the gorgeous sleight of hand that draws it to a satisfying end, and the way he chooses themes that run deeper than mere sociopolitical commentary: parental duty, friendship, romance, the call of home. Human beings, after all, “deserve not only our consideration but our reconsideration” — even those from the leisured class. Who will save Rostov from the intrusions of the state if not the ­seamstresses, chefs, bartenders and doormen? In the end, ­Towles’s greatest narrative effect is not the moments of wonder and synchronicity but the generous transformation of these peripheral workers, over the course of ­decades, into confidants, equals and, finally, friends. With them around, a life sentence in these gilded halls might make Rostov the luckiest man in Russia.

by Craig Taylor, NY Times |  Read more:

Image: Amazon

[ed. I'm about half-way through this book and can recommend it highly despite its theme of prolonged house arrest (but, in a first-class hotel!). The Count is certainly an endearing and memorable character. This follows another book I just finished, which also (unexpectedly) uses sheltering in place as a central theme: The Memory Police by Yoko Ogawa (NPR Review). Art imitiating life I guess, or vice versa. Anyway, here's an excerpt from A Gentleman in Moscow that seems appropriate given our present situation:]

"Even men in the most trying of circumstances - like those lost at sea or confined to prison - will find the means to carefully account the passing of a year. Despite the fact that all the splendid modulations of the seasons and those colorful festivities that recur in the course of normal life have been replaced by the tyranny of indistinguishable days, the men in such situations will carve their 365 notches into a piece of wood or scratch them into the walls of their cell.

Why do they go to such lengths to mark time? When, ostensibly, to do so should matter to them least of all? Well,  for one, it provides an occasion to reflect on the inevitable progress of the world they've left behind: "Ah Aloysha must now be able to climb a tree in the yard; and Vanya must be entering the academy; and Nadya, dear Nadya, will soon be of an age to marry..."

But just as important, a careful accounting of days allows the isolated to note that another year of hardship has been endured; survived; bested. Whether they have found the strength to perservere through a tireless determination or some foolhardy optimism, those 365 hatch marks stand measured as proof of their indomitability. For after all, if attentiveness should be measured in minutes and discipline measured in hours, then indomitability must be measured in years. Or, if philosophical investigations are not to your taste, then let us simply agree that the wise man celebrates what he can."

Facebook and the Folly of Self-Regulation

My late colleague, Neil Postman, used to ask about any new proposal or technology, “What problem does it propose to solve?”

When it comes to Facebook, that problem was maintaining relationships over vast time and space. And the company has solved it, spectacularly. Along the way, as Postman would have predicted, it created many more problems.

Last week, Facebook revealed the leaders and first 20 members of its new review board. They are an august collection of some of the sharpest minds who have considered questions of free expression, human rights, and legal processes.

They represent a stratum of cosmopolitan intelligentsia quite well, while appearing to generate some semblance of global diversity. These distinguished scholars, lawyers, and activists are charged with generating high-minded deliberation about what is fit and proper for Facebook to host. It’s a good look for Facebook—as long as no one looks too closely.

What problems does the new Facebook review board propose to solve?

In an op-ed in The New York Times, the board’s new leadership declared: “The oversight board will focus on the most challenging content issues for Facebook, including in areas such as hate speech, harassment, and protecting people’s safety and privacy. It will make final and binding decisions on whether specific content should be allowed or removed from Facebook and Instagram (which Facebook owns).”

Only in the narrowest and most trivial of ways does this board have any such power. The new Facebook review board will have no influence over anything that really matters in the world.

It will hear only individual appeals about specific content that the company has removed from the service—and only a fraction of those appeals. The board can’t say anything about the toxic content that Facebook allows and promotes on the site. It will have no authority over advertising or the massive surveillance that makes Facebook ads so valuable. It won’t curb disinformation campaigns or dangerous conspiracies. It has no influence on the sorts of harassment that regularly occur on Facebook or (Facebook-owned) WhatsApp. It won’t dictate policy for Facebook Groups, where much of the most dangerous content thrives. And most importantly, the board will have no say over how the algorithms work and thus what gets amplified or muffled by the real power of Facebook.

This board has been hailed as a grand experiment in creative corporate governance. St. John’s University law professor Kate Klonick, the scholar most familiar with the process that generated this board, said, “This is the first time a private transnational company has voluntarily assigned a part of its policies to an external body like this.”

That’s not exactly the case. Industry groups have long practiced such self-regulation through outside bodies, with infamously mixed results. But there is no industry group to set standards and rules for Facebook. One-third of humanity uses the platform regularly. No other company has ever come close to having that level of power and influence. Facebook is an industry—and thus an industry group—unto itself. This is unprecedented, though, because Facebook ultimately controls the board, not the other way around.

We have seen this movie before. In the 1930s the Motion Picture Association of America, under the leadership of former US postmaster general Will Hays, instituted a strict code that prohibited major Hollywood studios from showing, among other things, “dances which emphasize indecent movements.” The code also ensured that “the use of the [US] flag shall be consistently respected.” By the 1960s, American cultural mores had broadened, and directors demanded more freedom to display sex and violence. So the MPAA abandoned the Hays code and adopted the ratings system familiar to American moviegoers (G, PG, PG-13, R, NC-17). (...)

When self-regulation succeeds at improving conditions for consumers, citizens, or workers, it does so by establishing deliberative bodies that can act swiftly and firmly, and generate clear, enforceable codes of conduct. If one movie studio starts dodging the ratings process, the MPAA and its other members can pressure theaters and other delivery channels to stop showing that studio’s films. The MPAA can also expel a studio, depriving it of the political capital generated by the association’s decades of campaign contributions and lobbying.

The Facebook board has no such power. It can’t generate a general code of conduct on its own, or consider worst-case scenarios to advise the company how to minimize the risk of harm. That would mean acting like a real advisory board. This one is neutered from the start because someone had the stupid idea that it should perform a quasi-judiciary role, examining cases one by one.

We know the process will be slow and plodding. Faux-judicial processes might seem deliberative, but they are narrow by design. The core attribute of the common law is conservatism. Nothing can change quickly. Law is set by courts through the act of cohering to previous decisions. Tradition and predictability are paramount values. So is stability for stability’s sake.

But on Facebook, as in global and ethnic conflict, the environment is tumultuous and changing all the time. Calls for mass violence spring up, seemingly out of nowhere. They take new forms as cultures and conditions shift. Facebook moves fast and breaks things like democracy. This review board is designed to move slowly and preserve things like Facebook.

by Siva Vaidhyanathan, Wired |  Read more:

Image: Sam Whitney/Getty

Banmei Takahashi, New World of Love, 1994
via:

The False Dichotomy

The unemployment numbers are horrifying. The worst since the great depression. Tens of millions of people out of work. Nine million have lost their health insurance. It’s bad out there. The positive spin is that much of this unemployment should be temporary, lasting only as long as the pandemic. But as left financial analyst Doug Henwood notes in a dispiriting analysis, “thousands, maybe millions, of small and mid-sized businesses won’t be able to survive months with no revenue, and so won’t be around to reopen,” plus “second and/or third waves of viral attacks, which are quite possible, would make a quick rebound even less likely.”

If you consume conservative media, as I regrettably do, you hear constantly about the mass unemployment. In fact, they seem to talk about it much more than about the human toll of coronavirus itself. Over and over again on the Wall Street Journal op-ed page, for instance, you hear the same talking point repeated: the economy is being killed, people are suffering, and thus everything must be reopened, virus be damned. Here is a representative excerpt from a recent editorial: (...)

“after a seven-week lockdown, thousands of New Yorkers are still testing positive and hundreds are hospitalized each day. ‘Government has done everything it could. Society has done everything it could,’ Gov. Andrew Cuomo said. He’s right, but then why not reopen? Americans need to work to make a living, and they want to work. But the longer the shutdowns go on, the more furloughs become long-lasting unemployment.

The Journal concludes that “the virus will be with us for a long time unless there’s a vaccine, so we have to learn to live with it and have a functioning economy.” See? “Open the economy, virus be damned” is not an exaggerated description of the position. (The Journal also says that we should not worry about businesses endangering their employees because they have “no incentive” to do so. This is false: if 1) businesses have no liability for harm done to employees—as conservatives would like to see happen—and 2) employees are easily replaced—as they are during times of high unemployment—and 3) endangering them is less costly than protecting them, then businesses have a very strong incentive to endanger employees. The Journal editorial board should be forced to take a remedial economics course.)

Part of the argument, as you can see, is just unfathomably stupid. Governments are choosing to continue lockdowns even though they don’t have many deaths—this sounds like an LSAT “spot the flaw in the reasoning” test. “Why not reopen?” Because—I patiently explain to the editorial board of one of the nation’s most prominent newspapers—that risks massively escalating the transmission of a virus that already kills thousands of people every day. Now, you can make an argument about the impact of the lockdowns on the spread of the virus, which is still contentious among experts, but what you cannot do is simply say “Gosh, the virus seems to be slowing down its spread, looks like all these drastic public health measures were for nothing!”

But I will leave the debate over the efficacy of lockdowns to the epidemiologists who actually study such things. Here I want to draw your attention to a more insidious part of the right-wing argument: the use of joblessness and its effects as an argument for reopening the economy.

The Wall Street Journal wants you to think that “logic” demands we think the following way: if the shutdown has produced joblessness, and joblessness causes misery, we must end the shutdown. It’s simple. But simple thinking is often stupid thinking. The argument is premised on the idea that the economic misery people are suffering right now is the unavoidable effect of shutting down parts of the economy. But that’s not the case: there is a giant part of it that is indeed avoidable. And what the right doesn’t want you to understand is that there is a completely different possible way of thinking about it. Because if you thought about it differently, you might question many of the foundational premises of laissez-faire capitalism. And that would be a very bad thing indeed!

The causal chain is clear: if businesses are required to temporarily reduce or suspend operations, workers will lose their jobs, and if workers lose their jobs they will lose their health insurance and their paychecks. But do these things have to follow from businesses having to reduce operations? No, they don’t. The health insurance piece of it is clearly not necessary—the only reason workers lose their health insurance when they lose their jobs is because the United States has an incredibly dumb way of financing healthcare. If we had a universal government insurance program, nobody would have to fear that reduced employment would have any consequences at all for their healthcare. Britain, for instance, has had a terrible response to the coronavirus under Boris Johnson’s Conservative government, but even though the economic effects of the crisis have been very bad, not a single person there has to worry that they won’t be able to afford healthcare as a result. Britain’s healthcare is nationalized and free at the point of use. So every single worry people have in the United States about not being able to afford medical care is a completely avoidable form of suffering. It is imposed on them by their government due to the prevailing free market ideology. We could get rid of it entirely if we had a National Health Service like Britain does. But we choose to put people in financial distress.

The Wall Street Journal obviously does not want you to think about it that way. They want you to think that the way in which the government has caused your troubles is by imposing the economic shutdown. But that’s not true. The government has caused you trouble by imposing the economic shutdown without introducing the kind of policies that would successfully make a shutdown tolerable. The people of Britain are not out protesting for their government to lift lockdown restrictions. They are overwhelmingly in support of a long lockdown. (Actually, despite propaganda efforts by the right to suggest that Americans are sick and tired of the lockdowns, the public here has been largely supportive of the public health measures taken. It’s just even stronger in Britain.) In part, British people can better afford to be supportive of these measures, because they don’t have to worry that they’re going to lose their insurance if their job goes. (There have been some protests in France, but they have not been because the government cares too much about public health. They have been because their neoliberal government, like ours, does not care about making sure vulnerable people come out of this okay.)

But parts of the unemployment may also be a choice. The United States has done an absolutely abysmal job of protecting people’s employment. The “paycheck protection program” has been an administrative nightmare, funneling money to companies that don’t need it and saddling small businesses with new debt. The government could have simply paid salaries during the crisis, but a choice was made not to do this, in part because people in government have a pathological hatred of “handouts” and would rather other people die needlessly by the thousands than give an inch on their ideology.

by Nathan J. Robinson, Current Affairs |  Read more:

Image: uncredited
[ed. See also: How Much Is a Human Life Actually Worth? (Wired).]

Food to GoGo

After a cease-and-desist shut down their attempts at a Boober Eats food delivery service, Portland strip club Lucky Devil Lounge has found another new way to keep the lights in this pandemic. "You pull in and you get one or two songs with the gogos, then we bring your food out to you and then you go on your way," explains owner Shon Boulden in the video above.

According to Oregon Live, the service costs $30 per car, plus $10 for each additional occupant, plus a mandatory food purchase. You can still get Boober Eats, too, only now it's served under a different name.

But honestly it just looks like something out of Blade Runner or Neuromancer. I'm just glad the dancers are given some kind of PPE.

Pandemic drive-thru strip club is pure cyberpunk dystopia (Boing Boing)

[ed. Where there's a will, there's a way.]

My Restaurant Was My Life for 20 Years. Does the World Need It Anymore?

On the night before I laid off all 30 of my employees, I dreamed that my two children had perished, buried alive in dirt, while I dug in the wrong place, just five feet away from where they were actually smothered. I turned and spotted the royal blue heel of my youngest’s socked foot poking out of the black soil only after it was too late.

For 10 days, everyone in my orbit had been tilting one way one hour, the other the next. Ten days of being waterboarded by the news, by tweets, by friends, by my waiters. Of being inundated by texts from fellow chefs and managers — former employees, now at the helm of their own restaurants but still eager for guidance. Of gentle but nervous pleas from my operations manager to consider signing up with a third-party delivery service like Caviar. Of being rattled even by my own wife, Ashley, and her anxious compulsion to act, to reduce our restaurant’s operating hours, to close at 9 p.m., cut shifts.

With no clear directive from any authority — public schools were still open — I spent those 10 days sorting through the conflicting chatter, trying to decide what to do. And now I understood abruptly: I would lay everybody off, even my wife. Prune, my Manhattan restaurant, would close at 11:59 p.m. on March 15. I had only one piece of unemotional data to work with: the checking-account balance. If I triaged the collected sales tax that was sitting in its own dedicated savings account and left unpaid the stack of vendor invoices, I could fully cover this one last week of payroll.(...)

Everybody’s saying that restaurants won’t make it back, that we won’t survive. I imagine this is at least partly true: Not all of us will make it, and not all of us will perish. But I can’t easily discern the determining factors, even though thinking about which restaurants will survive — and why — has become an obsession these past weeks. What delusional mind-set am I in that I just do not feel that this is the end, that I find myself convinced that this is only a pause, if I want it to be? I don’t carry investor debt; my vendors trust me; if my building’s co-op evicted me, they would have a beast of a time getting a new tenant to replace me.

But I know few of us will come back as we were. And that doesn’t seem to me like a bad thing at all; perhaps it will be a chance for a correction, as my friend, the chef Alex Raij, calls it.

The conversation about how restaurants will continue to operate, given the rising costs of running them has been ramping up for years now; the coronavirus did not suddenly shine light on an unknown fragility. We’ve all known, and for a rather long time. The past five or six years have been alarming. For restaurants, coronavirus-mandated closures are like the oral surgery or appendectomy you suddenly face while you are uninsured. These closures will take out the weakest and the most vulnerable. But exactly who among us are the weakest and most vulnerable is not obvious.

Since Prune opened in the East Village, the neighborhood has changed tremendously in ways that reflect, with exquisite perfection, the restaurant scene as a whole. Within a 10-block radius of my front door, we have the more-than-100-year-old institutions Russ & Daughters and Katz’s Delicatessen. We have hole-in-the-wall falafel, bubble tea and dumpling houses, and there’s a steakhouse whose chef also operates a restaurant in Miami. There’s everyday sushi and rare, wildly expensive omakase sushi, as well as Japanese home cooking, udon specialists and soba shops. There’s a woman-owned and woman-run restaurant with an economic-justice mission that has eliminated tipping. Bobby Flay, perhaps the most famous chef on the Food Network, has an 125-seater two avenues over. We have farm-to-table concepts every three blocks, a handful of major James Beard Award winners and a dozen more shortlisted nominees and an impressive showing of New York Times one- and two-star earners, including Madame Vo, a knockout Vietnamese restaurant just a few years old. Marco Canora, who started the country’s migration from regular old broth to what is now known by the name of his shop, Brodo, has published a couple of cookbooks and done a healthy bit of television in the course of his career. He still runs his only restaurant, 17-year-old Hearth, on First Avenue.

But block after block, for so many years now, there are storefronts where restaurants turn over so quickly that I don’t even register their names. If Covid-19 is the death of restaurants in New York, will we be able to tell which restaurants went belly up because of the virus? Or will they be the same ones that would have failed within 16 months of opening anyway, from lack of wherewithal or experience? When we are sorting through the restaurant obituaries, will we know for sure that it was not because the weary veteran chef decided, as I have often been tempted myself in these weeks, to quietly walk out the open back door of a building that has been burning for a long time?

It gets so confusing. Restaurant operators had already become oddly cagey, and quick to display a false front with each other. You asked, “How’s business?” and the answer always was, “Yeah, great, best quarter we’ve ever had.” But then the coronavirus hits, and these same restaurant owners rush into the public square yelling: “Fire! Fire!” They now reveal that they had also been operating under razor-thin margins. It instantly turns 180 degrees: Even famous, successful chefs, owners of empires, those with supremely wealthy investors upon whom you imagine they could call for capital should they need it, now openly describe in technical detail, with explicit data, how dire a position they are in. The sad testimony gushes out, confirming everything that used to be so convincingly denied.

The concerns before coronavirus are still universal: The restaurant as we know it is no longer viable on its own. You can’t have tipped employees making $45 an hour while line cooks make $15. You can’t buy a $3 can of cheap beer at a dive bar in the East Village if the “dive bar” is actually paying $18,000 a month in rent, $30,000 a month in payroll; it would have to cost $10. I can’t keep hosing down the sauté corner myself just to have enough money to repair the ripped awning. Prune is in the East Village because I’ve lived in the East Village for more than 30 years. I moved here because it was where you could get an apartment for $450 a month. In 1999, when I opened Prune, I still woke each morning to roosters crowing from the rooftop of the tenement building down the block, which is now a steel-and-glass tower. A less-than-500-square-foot studio apartment rents for $3,810 a month. (...)

For the past 10 years I’ve been staring wide-eyed and with alarm as the sweet, gentle citizen restaurant transformed into a kind of unruly colossal beast. The food world got stranger and weirder to me right while I was deep in it. The “waiter” became the “server,” the “restaurant business” became the “hospitality industry,” what used to be the “customer” became the “guest,” what was once your “personality” became your “brand,” the small acts of kindness and the way you always used to have of sharing your talents and looking out for others became things to “monetize.”

The work itself — cooking delicious, interesting food and cleaning up after cooking it — still feels as fresh and honest and immensely satisfying as ever. Our beloved regulars and the people who work so hard at Prune are all still my favorite people on earth. But maybe it’s the bloat, the fetishistic foodies, the new demographic of my city who have never been forced to work in retail or service sectors. Maybe it’s the auxiliary industries that feed off the restaurants themselves — the bloggers and agents and the “influencers,” the brand managers, the personal assistants hired just to keep you fresh on “Insta,” the Food & Wine festivals, the multitude of panels we chefs are now routinely invited to join, to offer our charming yet thoroughly unresearched opinions on. The proliferation of television shows and YouTube channels and culinary competitions and season after season of programming where you find yourself aghast to see an idol of yours stuffing packaged cinnamon buns into a football-shaped baking pan and squirting the frosting into a laces pattern for a tailgating episode on the Food Network. (...)

I cannot see myself excitedly daydreaming about the third-party delivery-ticket screen I will read orders from all evening. I cannot see myself sketching doodles of the to-go boxes I will pack my food into so that I can send it out into the night, anonymously, hoping the poor delivery guy does a good job and stays safe. I don’t think I can sit around dreaming up menus and cocktails and fantasizing about what would be on my playlist just to create something that people will order and receive and consume via an app. I started my restaurant as a place for people to talk to one another, with a very decent but affordable glass of wine and an expertly prepared plate of simply braised lamb shoulder on the table to keep the conversation flowing, and ran it as such as long as I could. If this kind of place is not relevant to society, then it — we — should become extinct.

by Gabrielle Hamilton, NY Times | Read more:
Image: Philip Montgomery for The New York Times
[ed. See also: Can the Restaurant Industry Be Saved? (Rolling Stone)

How Pandemics End

How Pandemics End (NY Times)
Image: A Sicilian fresco from 1445. In the previous century, the Black Death killed at least a third of Europe’s population. Werner Forman/Universal Images Group/Getty Images
[ed. See also: The Risks - Know Them - Avoid Them (Erin Bromage).]

Walk of Fame
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Jackson Browne & David Lindley

Trump’s Bid to Stand Above the Law

Next week, the Supreme Court will hear lawyers argue the president’s claim that he has absolute immunity while in office.

On Tuesday, the U.S. Supreme Court is scheduled to hear one of the most consequential cases ever considered on executive privilege. Trump v. Vance concerns a subpoena issued by the Manhattan district attorney to President Trump’s accountants demanding the release of tax returns and other financial documents to a grand jury.

What is at stake is no less than the accountability of a president to the rule of law.

Mr. Trump claims that a president has “temporary absolute immunity,” meaning he cannot be criminally investigated while in office. Indeed, in oral argument before the U.S. Court of Appeals for the Second Circuit in New York, his lawyers said that if the president were to shoot someone on Fifth Avenue, he could not be investigated or indicted until after he left office.

If the justices endorse this extreme view, they will make it impossible to hold this president, and all future presidents, answerable in courts for their actions.

Mr. Trump’s legal position contradicts clear Supreme Court precedent. In U.S. v. Nixon, a unanimous Supreme Court ordered President Richard Nixon to turn over Oval Office tapes subpoenaed by the Watergate special prosecutor, Archibald Cox. In Clinton v. Jones, a unanimous court held that a sitting president can be forced to testify in response to a subpoena in civil litigation. Taken together, these cases make it clear that the president is not immune from investigation, whether criminal or civil, while he is in office.

Mr. Trump’s claims of absolute immunity are even weaker than the assertions by Presidents Nixon and Bill Clinton. The subpoena was issued by a state, rather than a federal prosecutor. The 10th Amendment to the U.S. Constitution allows states a certain degree of autonomy in investigating and prosecuting crimes. Although grand jury proceedings are secret, Mr. Vance is probably also investigating whether the president’s company, the Trump Organization, falsely accounted for hush-money payments made in the run-up to the 2016 election to two women who claim they had affairs with Mr. Trump. To deny New York the right to exercise its “police powers” over serious financial crimes should give the court’s conservative justices pause.

In addition, the subpoena was not issued to Mr. Trump, but to Mazars, his accountants. Mr. Trump maintains that the immunity of a sitting president is so strong that it extends to his entire business empire and even to third-party businesses that possess his personal information. By this logic, President Clinton could have blocked a subpoena to Monica Lewinsky’s dry cleaner, had she had one, to prevent it from handing over the infamous blue dress before laundering to the independent counsel investigating him.

Mr. Trump’s legal team asserts that federal law pre-empts state law, arguing that his immunity descends directly from the president’s constitutional authority under Article II of the Constitution. We filed an amicus brief in the case opposing this sweeping assertion of presidential immunity, on the grounds that the language of Article II, the history of its drafting and its subsequent interpretation by federal courts contradict Mr. Trump’s interpretation.

Moreover, his claim conflicts with the administration’s position in another recent Supreme Court case over states’ rights, Kansas v. Garcia. The administration’s solicitor general had sided with Kansas against an immigrant’s claim that federal immigration law prevented Kansas from prosecuting him for identity theft.

The same should apply in Trump v. Vance: The Constitution gives the Manhattan district attorney broad latitude to investigate possible financial misconduct of businesses headquartered in New York unless federal law expressly forbids it. No federal law does.

The authorities usually cited for the proposition that a sitting president cannot be indicted are two Justice Department memorandums. Rather than offering a legal analysis based on Article II, the memos are largely pragmatic, advising that it would be unwise to distract a president with legal processes when he needs to focus on the national interest. As such, these memorandums are merely advice to Justice Department prosecutors. They are not binding in any way on state prosecutors. (...)

If the Supreme Court sides with Mr. Trump in the Vance case and agrees with his other assertions of executive authority, here is where presidential accountability will stand: A sitting president cannot be prosecuted or investigated through the authority of state or federal courts, and he cannot be investigated by Congress or tried in a meaningful way upon impeachment in the Senate. And under Mr. Trump’s broad theory of his authority over the executive branch, a president will be able to press federal agencies into service to hide corruption from public view.

by Claire O. Finkelstein and Richard W. Painter, NY Times | Read more:
Image: Christopher Lee for The New York Times

[ed. See also: William Barr’s Perversion of Justice (NY Times)

Sure, Velociraptors are Still on the Loose, But That's No Reason Not to Reopen Jurassic Park

Hello, Peter Ludlow here, CEO of InGen, the company behind the wildly successful dinosaur-themed amusement park, Jurassic Park. As you’re all aware, after an unprecedented storm hit the park, we lost power and the velociraptors escaped their enclosure and killed hundreds of park visitors, prompting a two-month shutdown of the park. Well, I’m pleased to announce that, even though the velociraptors are still on the loose, we will be opening Jurassic Park back up to the public!

As some of you know, Dr. Ian Malcolm, our lead safety consultant, had recommended that we wait until the velociraptors have been located and contained before reopening the park, so he wasn’t thrilled when we told him the news. I believe his exact words were “you were so preoccupied with whether you could reopen the park, you didn’t stop to think whether you should.” Talk about a guy on a high horse.

That said, you’ll be pleased to know that, rather than double down on our containment efforts, we’ve decided to dissolve the velociraptor containment task force altogether, and focus instead on how we can get people back into the park as quickly as possible. So rather than concentrating on so-called life-saving measures like “staying in designated safe areas” or “masking your scent,” we’ll be focusing on the details that will get our customers really excited, like a wider selection of fun hats, a pterodactyl-shaped gondola ride to the top of the island, and a brand new Gordon Ramsay designed menu at the Cretaceous Cafe.

In addition to satisfying our customers, the decision to reopen the park is also about allowing the furloughed employees of Jurassic Park to get back to the work they love. Could we have continued to pay their salaries for several months until we got the velociraptor situation under control? Definitely. We’re the wealthiest nature preserve on the planet after all. And will some of the employees returning to work have their limbs torn off and tossed into the air like a juggler tossing bowling pins? Undoubtedly. But we’re confident that with a few safety precautions put in place, we’ll be able to keep the level of workplace injuries and deaths just below levels that would elicit widespread public outrage. And keeping things just below widespread public outrage levels is our gold standard for all of the decisions we make here at Jurassic Park.

And speaking of injuries, I want to take a moment to thank our Jurassic Park EMTs. They’re the real heroes here, am I right? In the process of responding to velociraptor attacks, many of our EMTs get mauled and dismembered by velociraptors themselves. That’s why, as a sign of appreciation, we will be repainting the Jurassic Park ambulance with the words “Hero Mobile” in big bubble letters. We think this is a far more meaningful token of gratitude than the salary increase they requested.

by Carlos Greaves, McSweeny's |  Read more:

Image: Jurassic Park/Universal Pictures

Mikhail Baryshnikov & Ana Laguna, Choreographer

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The Problem With Bluetooth for Virus Contact Tracing

The Problem With Bluetooth for Virus Contact Tracing (The Intercept)
Image: Soohee Cho/The Intercept, Getty Images

America's Crowded Prisons are About to Create a Coronoavirus Crisis in Rural America

For the past several decades, rural America’s economic lifeline has been the construction and operation of prisons and immigrant detention centers, both public and for-profit. The 1980s saw the collapse of American manufacturing and a farm crisis that ripped through the countryside. Mass incarceration was well-timed to fill the gap, producing jobs where they were needed.

But those lifelines have transformed into vectors for coronavirus, putting rural communities at risk of outbreaks. For many Americans, the plight of prisoners produces little sympathy. But in a twist on JFK — “Freedom is indivisible, and when one man is enslaved, all are not free” — those outside the prison walls are not immune from what goes on inside them. Those jobs that made the campuses so attractive to local communities are staffed by people who go in and out each day — and what they bring with them could make all the difference in communities where hospitals were already shutting down, a trend exacerbated by Covid-19.

It’s next to impossible to social distance in jails and prisons. “Correctional facilities are overcrowded, often badly,” explained Aaron Littman, a UCLA School of Law professor who focuses on jail conditions. “It’s important to remember that when we say overcrowded, we mean dozens of people sleeping inches within each other’s faces. They’re using the same toilets. Most don’t have access to liquid hand soap. In short, they are ideal sites for incubating respiratory viruses.”

Guards and other jail staff have to share tight spaces and physically handle the prisoners — and then they go home at night. In some rural areas, there are not many other career choices beyond working in a jail or prison. The average national salary for a prison correctional officer is $47,013.

In an essay titled “Building a Prison Economy in Rural America,” public policy researcher Tracy Huling points out that there are more prisoners than farmers in some swaths of the United States. She notes that in the 1990s, a new prison or jail sprung up in a rural area at a rate equivalent to every 15 days. So it’s not surprising that there have been outbreaks in areas that don’t otherwise have risk factors, such as crowded public transportation in densely populated urban centers. Marion County, Ohio, has 2,332 confirmed cases, in a population of 66,501. The Marion County prison is currently the top cluster site in the country by far, according to a New York Times analysis.

“When I read about institutions like in Ohio that are able to test a lot of people, of the positive, most are asymptomatic,” Cheshire County jail superintendent Richard Van Wickler said. “My god, how do you possibly protect other inmates and staff?”

Last week, PBS reported that of federal prisoners who had been tested, 70 percent were found to have the coronavirus. A breakdown of New York Times data tracking Covid-19 cluster sites on April 26 revealed that out of 100 top cluster sites, 35 were tied to correctional facilities. In comparison, 28 percent of infections were linked to nursing homes. Those numbers are astounding when you consider that nursing home residents are at much higher risk of serious infection because of their age, while incarcerated people and prison staff vary in age. Seven of the top 10 cluster sites are linked to American prisons or jails. As the Marshall Project reported, so-called prison towns like Palestine, Texas, where correctional facilities are a community’s primary employer, have already seen an explosion of cases. An ACLU report released last week estimates that 100,000 more people will die because of America’s crowded jails. “The United States’ unique obsession with incarceration has become our Achilles heel when it comes to combating the spread of COVID-19,” the ACLU concluded.

When politicians like New York Gov. Andrew Cuomo hail the heroism of America’s “essential workers”— be they doctors, police officers, EMTs, grocery workers, or bus drivers— prison and jail staff go unmentioned. It’s a strange lapse, but perhaps an unsurprising one, given that the solution — large scale decarceration — remains politically difficult.

by Tana Ganeve, The Intercept |  Read more:

Image: Alex Kormann/Star Tribune/Getty Images

People and Jobs? Or Wealth?

Yves here. I wish I had written this must-read post. Richard Murphy lays out the case for whose interests need to be sacrificed for the economy to have any hope of surviving under the conditions being imposed on businesses to keep workers and customers safe. Unfortunately, his well-reasoned recommendation, that landlords, banks, and pensioners need to take hits to save jobs and businesses, is not likely to find support in official circles. But Murphy’s argument, in essence, is that these groups are toast under any scenario, and they can’t be allowed to weigh down the productive sectors of the economy.

By Richard Murphy... Originally published at Tax Research UK

Summary

This blog post is, in effect, an essay of almost four thousand words. I did not intend that when I started to write it. If I had known it would be that long I might have used a different style. But as I wrote it just kept growing. That is because what I think it is about is vital, in the sense that the issues I address cannot be avoided.

What I am suggesting is that whatever we think or do we are heading for the most almighty economic crash. The things that we have treated as stores of value – which are mainly shares and both commercial and residential property – are massively overvalued now. And there is nothing we can do to prevent the value of them crashing because the Ponzi style financialisation that has gripped western economies – and those of the US and UK in particular – for the last forty years was always heading for a massive crash, and now it has arrived. The genie is out of the bottle and it will not go back in again.

But that is not to say that our government (and other governments) are left powerless in the face of this. They are not. They can still make a decision about which factor of production – labour, business (enterprise), banks (capital) or landlords they wish to favour in the crisis to come.

If they favour people and business and sacrifice landlords (whos assets will survive, come what may, albeit at considerably less worth) and banks (which will inevitably need to be nationalised) then more people and many more businesses might make it through the coming crisis. If they favour landlords and banks – as the UK government is at present – then the chance that much business at all will survive this is pretty remote. And in the end, nor will the banks or the landlords either. That’s my bleak prognosis. And either way, pension funds and pensioners are in deep trouble: most will now be dependent on the state, which means much more generous provision has to be thought about now than we have ever previously imagined.

I didn’t enjoy writing this post. I’m not suggesting it’s a fun read. It is not. And yet, I do see hope. Our economies have been blighted by the curse of financialisation. I would not have chosen to end it the way that it’s going to happen. But wise governments will realise that the end of financialisation is now nigh, and act accordingly.

And some won’t.

On that decision rests the fate of millions of people.

I wish I thought I could rely on our government to make the right choice. Time alone will tell if they will. 

The lockdown threat to business viability

At the beginning of May 2020 it is very apparent that life is not returning to normal. Plans to end lockdown do, according to the Financial Times, include staggered working hours; rules to require social distancing in the workplace and shops; a ban on workplace canteens; a requirement that employers provide extra car parks (seemingly overnight) so that employees need not share lifts to work; a reduction in the number of people allowed to share lifts and a great deal more that makes it apparent that whatever work might be like after lockdown it will be nothing like what it was before it.

It is easy for the government to say this. And the rules could, possibly, be enforced. But the consequences need to be thought through, because they are staggering.

Of course it is theoretically possible that some companies could actually survive the substantial new costs that this way of working will impose. But I stress that the word ‘theoretically’ is doing a lot of work in that sentence. That is because the reality is that in all likelihood almost none can, or will. Our economy is not geared to work in this way. And by geared I do not mean physically, where it is apparent that our capacity for adaptation is already quite phenomenal. Instead I refer to financial gearing, interpreted broadly.

The financial burden on business

Like many households, a great many businesses are massively debt-burdened. They have both significant financial borrowings and / or substantial rent payment commitments. That is because they are both under-capitalised in many cases and do not own their own properties, with rent in that case pretty much representing interest on an expensive loan that they might have had to take if they were to have bought their property instead.

Importantly, these obligations are fixed at present. The government might have shrunk official interest rates to near enough zero, but the reality is that in the actual economy that is not the case. The burden on businesses to repay loans, interest on those loans, and rents, might have been subject to some minor concessions for strictly limited periods at present, and then only for some lucky businesses, but for many the obligations will be ongoing. And there has been not a hint, so far, of long term support on these issues. Instead new government-backed loans under coronavirus schemes will just add to these debt mountains.

What this will mean is that companies working with reduced efficiency and increased costs in markets where demand will be reduced will be under enormous stress. They will, absolutely inevitably, suffer reduced profitability from their trading activities, but will nonetheless be facing fixed financial obligations created in an entirely different era and market and, quite crucially, legally these obligations are not re-negotiable in most cases.

It does not take a financial genius to realise that this is a situation that literally cannot work. The vast majority of businesses cannot now survive if they are to meet those financial obligations. We are seeing this on High Streets already, where refusal to pay rents is becoming commonplace, but the problem will now extend to every industrial estate, office block and workshop in the country.

The tiny minority of businesses with no borrowings and their own, paid for, freehold premises might make it through this crisis. In addition, micro-enterprises working at home and with almost no employees might also do so. But with the lockdown conditions that are going to be imposed, the rest cannot. It will be as simple as that. I cannot be more blunt: on this occasion comments based on the extrapolation of obvious heuristically derived conclusions that reduce analysis of a situation to its barest essentials are both necessary and true.

The choice the government has to make

In that case it is also true that in the economy to come some fairly stark decisions have to be made if it is the plan of the government that we survive this crisis. Of these the most important (as ever when the reality of these situations is faced) is whose interests are to be prioritised?

Is it labour, and the need to preserve jobs, that has the highest priority?

Or is it enterprise, meaning that the preservation of trading entities becomes the core goal?

Alternatively, assuming that this can be done, is banking to be pre-eminent to prevent a crash? In other words, is capital preserved?

Finally, might instead the interests of landlords feature most highly?

To go right back to this most basic of economic questions, which factor of production is to have priority? Unavoidably, that question does, of course, have implicit class connotations attached to it.

Right now it seems quite clear that the government is setting its priorities in the reverse ordering of the above list.

To be precise, landlords have not really been asked to make any sacrifices to date: their interests and income streams appear to have survived almost unscathed to date.

Banks on the other hand are already subject to massive support for which they did not pay and are also now enjoying significant effective additional funding for loans from which they will make money. Quantitative easing has also helped them, and it’s back on the agenda.

Business loans, most especially to larger companies are getting through, but as loan capital those funds simply defer the day of reckoning that is to come because, as yet, the government is quite unable to differentiate cash flow, liquidity and solvency, let alone loans from capital. As such the wrong support is being provided, and the stress is growing as a result.

And furlough just disguises the fact that more than 6 million people are now likely to be unemployed in the UK. When the self-employed whose businesses have failed are added in it could be much higher.

My point is that this ranking of priorities – so natural to a political party established to support the interests of unearned wealth – is fundamentally misjudged now.

by Richard Murphy, Tax Research UK via Naked Capitalism | Read more:

[ed. Comments section is worth a read as well. See also: Federal Funds Must Go to State and Local Governments (Ian Welsh).]