Daily Archives: April 20, 2020

How the PPP came to this impasse involves a whole host of colliding factors: the Republican Party's nihilism; congressmembers' bad instincts when it comes to designing fiscal policy; their ignorance about monetary policy; and the raw health threat the coronavirus poses to any large gathering of people including Congress itself.

The first issue is the PPP's $350 billion allocation, which was meant to cover two-and-a-half months of payroll. But add up all the small businesses in America defined as those with fewer than 500 employees and their combined payroll expenses over that time period come to around $700 billion. The program works on a first-come, first-serve basis, so businesses with established relationships with the banks got to it first. Poorer businesses, those with fewer connections and clout, and those in mostly black neighborhoods and other marginalized communities got left out in the cold. The PPP also included provisions that let bigger companies with more than 500 employees get loans under certain circumstances, like if they ran restaurant chains. The fact that the program's rollout was a logistical nightmare didn't help matters either.

All told, only 1.64 million applications for loans were processed through the program less than six percent of the 29.6 million U.S. businesses with under 500 workers. Meanwhile, something like four out of five small businesses only have enough cash on hand to weather two months, at most. You can rest assured that those businesses with the least amount of buffer are also the most marginalized, and thus probably last in line for the PPP's now-empty pot.

In other words, a few minutes of research on Google should've made it blindingly obvious to Congress that $350 billion was a woefully inadequate sum. Nothing prevented lawmakers from setting it higher. In fact, there's no reason they needed to specify a dollar cap on the program at all.

The way the PPP works is that private banks originate the loans, under terms set by the government. Then, if the small business abides by certain rules particularly keeping its workers on and using at least 75 percent of the loan to meet their payroll the loan is forgiven. Of course, that loses the bank money, so the point of the $350 billion Congress appropriated was to plug the hole in the banks' balance sheets. Policymakers could've just written the law so that banks could give out as many PPP loans as the small business community asked for, and Congress would commit to spending as much as needed to make that happen. They could do that right now! But instead, for no reason other than raw ideological opposition to big spending, Democrats and Republicans are batting around the idea of adding another specific dollar amount probably $250 billion to the program.

But the situation is even more ridiculous than that. Alongside Congress's fiscal efforts, the Federal Reserve also rolled out a huge series of monetary policy programs to combat the coronavirus recession. One of those programs is an offer to accept PPP loans as collateral in exchange for cheap credit. Basically, the Fed told the banks originating the PPP loans that it will take those loans off their books for them, in exchange for that bank taking another loan out from the Fed. Since the entire financial system is desperate for super cheap credit from the central bank right now, that's going to look like a pretty sweet deal.

This does mean that the loss from forgiving the PPP loans will now fall on the Fed's books, rather than the originating bank's. But the Fed is not like private banks; it doesn't have to keep its balance sheet positive lest it go under. The central bank is an arm of the U.S. government, and shares the U.S. government's ability to create infinite U.S. dollars. It can absorb all the losses it wants. (The Fed likes to keep its balance sheet positive for appearances' sake, but it doesn't need to.)

Technically speaking, this backing from the Fed means the sky's already the limit on how much lending the PPP program can do. It would probably behoove Congress to make the situation official: amend the PPP program to specify there is no dollar cap, and the Fed is expected to take all the PPP loans from the private banks. But as Nathan Tankus, the research director at the Modern Money Network who has done yeoman's work explaining all the actions the Fed has taken in the coronavirus crisis points out, this announcement by the Fed effectively renders congressional spending for the Payroll Protection Program moot.

Unfortunately, congressmembers' imaginations are not nearly so expansive. As I said, they're debating another infusion of $250 billion into the program. And it's not even clear they'll be able to do that. Perversely, both sides agree on the need to fund the PPP more. But the Democrats also want to include more help for hospitals, state governments, and local governments all of whom are facing their own fiscal crisis as well as some adjustments to the PPP's rules to make sure minority-owned businesses and other firms with less access get more priority. Republicans, in turn, are balking at those asks and demanding the $250 billion infusion be passed as a standalone measure.

I wrote a while back that all of these ideas are good and necessary, and thus should lay a foundation for an easy deal. But I apparently underestimated the GOP's intransigence. The White House and Senate Democrats are reportedly trying to hammer out an accord, but as of this writing things were still up in the air.

The final X-factor here is the coronavirus itself. Congress is officially on recess until May 4, and lawmakers are reluctant to physically gather again for health reasons. Whether this is forgivable caution or a dereliction of public duty, I will leave to readers to decide. They can still technically pass laws in a "pro forma" process, but that requires all bills be agreed to unanimously. Given the disagreements over how to design the next injection of money for the PPP, that's a pretty big hurdle. Some lawmakers are scrambling to put together a system for holding official votes remotely, but Congress has never done that before, and both Democratic and Republican leadership in the House and the Senate is resistant.

One way or another though, Congress will have to step up, and fast. Small businesses employ roughly half the country, the Payroll Protection Program was the one big bulwark defending them from the coronavirus' economic devastation, and it just went away.

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There's no excuse for coronavirus aid to small businesses running out - The Week

Warning: The following contains spoilers for The Platform, now streaming on Netflix.

In the Netflix film The Platform, director Galder Gaztelu-Urrutias allegory about class warfare and the increasing fragility of our social pyramid, university student Goreng (Ivn Massagu) willingly surrenders himself into a concrete tower-like prison for six months.

Referred to by staff as the Vertical Self-Management Center, the bizarre monolith houses its residents in hundreds of stacked cells which are randomly reassigned each month while the titular platform descends once a day bearing food. The platform stops on each level for a fixed period of time and those on the lower levels must pick over whatever is left from those above. By the time the platform descends past a certain level, those leftovers are nonexistent.

Theres an Orwellian thing going on there, said Susan Harmeling, an associate professor of entrepreneurship and an expert in business ethics at the Marshall School of Business at USC. Instead of calling it hell on earth, which it actually is, they call it the vertical self-management center or the VSMC, which makes it seem a lot more sterile.

Each floor of the VSMC has two cellmates who remain constant (at least as long as theyre alive), and each is permitted one personal item inside; Goreng chooses a copy of Don Quixote, while his cellmate Trimagasi selects a self-sharpening knife.

The Spanish-language Platform quickly became ensconced in Netflixs top 10 most sampled titles in the U.S. upon its release March 20 (a rare feat for a foreign language film; ) and shot to the top of IMDbs most searched titles. One reason to explain the unexpectedly popularity could be the movies exploration of the dark side of capitalism, the effects of which are even more glaring today as a result of the coronavirus pandemic and the burgeoning rise of the socialist movement.

The Times caught up with two economists Harmeling and Nico Voigtlnder, an associate professor at UCLAs Anderson School of Management to discuss how The Platform reflects our global economy, its resonance in wake of the COVID-19 pandemic and what each of them would choose as their one item in the pit.

Ivn Massagu stars as Goreng in Netflixs The Platform.

(Netflix)

What kinds of themes and philosophical theories did you recognize at play in The Platform?

Voigtlnder: I immediately thought of the tragedy of the commons, which refers to the problem where, if anyone has access to common land, youre going to have overuse in the end. Its related to the prisoners dilemma where individually every persons incentive is [self-serving in nature], which is of course bad for society. It would be much better to come to an agreement where you say, Were all using the land [or food] somewhat less so that theres a benefit for everyone. But you would always go back to that situation of overuse, unless you have enforcement or some code of conduct among these individuals that is very strong.

Harmeling: Theres a theory called the veil of ignorance from John Rawls, and its about designing a society where we are all behind this veil and dont know whether were going to be rich or poor or what our natural abilities are. Certainly, you wouldnt want to take a chance on not knowing, thats not the kind of society I think anybody would want to live in. Theres also populism versus Marxism versus capitalism, and nihilism versus idealism, and also Maslows hierarchy of needs.

[In the film] everyone loses human empathy because theyre in a fight for their lives for survival and cant afford to be self-actualized and have empathy because they dont even have anything to eat. That vicious nihilism and lack of empathy, the empty populism, really, reflects the zeitgeist right now.

Along with recent films like Knives Out, Parasite, and Joker, class warfare and wealth disparity have been explored in contemporary media to both critical and commercial acclaim. Did you notice a through line between The Platform and those other movies?

Harmeling: One thing that I thought of that is also true of Parasite is this idea of the global elite. In The Platform, [Goreng] exhibits the cluelessness and sort of gullibility and naive idealism of the global elites by bringing a book into the pit instead of a knife or a gun. Like hes going down there to do an intellectual study and to earn a degree. Then he realizes, "... here I am, Im stuck in it.

That naive idealism comes through in Parasite too with the son saying, Rich people are so gullible. That idea of not knowing what you dont know was another theme that I thought came through really clearly. The nihilism of Joker also comes through here too. Sort of the clown leading the clowns, the emptiness of populism.

Why do you think movies and television series about these themes are achieving popularity now? Its not as if wealth or income disparity is a new thing.

Harmeling: I think theres a reckoning coming. The millennial generation has fewer assets than the couple of generations that preceded them. So I think that theres this fascination with somebody like Bernie Sanders by young people, because people are scared and dont see a path to the wealth of their parents, to homeownership, to having enough stability to start a family. Theres climate change, theres so many issues that people of this generation are facing. People are saying, You know what, this isnt fair that these corporations arent paying taxes or that the top 1% to 2% has such a share of the wealth of this country.

Everybodys terrified of the word socialist, and God forbid communist or Marxist, but it seems to me that the pendulum is probably going to start swinging back towards competent government and some regulation and reining in of some of this literal feeding at the trough.

Alexandra Masangkay perches on a spread of leftovers in a scene from Netflixs The Platform.

(Netflix)

The film takes on a new resonance in wake of the coronavirus pandemic. Did you draw any parallels between what was happening in the film and what is going on in the world now while you were watching it?

Harmeling: Those who were feasting at the great banquet in The Platform are probably the same people who can buy a ventilator or are already in better health because they have healthcare in the first place. Rich people or people with good jobs have healthcare, so they have a better chance of surviving this pandemic. Its disproportionately affecting communities of color, which is shocking but not surprising.

Its this idea of the haves and the have-nots and the fallacy of trickle-down Reaganomics. There was a literal trickle down going on in The Platform where the people at the top eat the best, and by the time you get to the bottom, theres nothing to eat. And were seeing with this coronavirus crisis that being played out to the nth degree.

Voigtlnder: I actually had a different thought. I was thinking of this platform as how we hand down our planet from generation to generation and how its just getting more and more depleted as time goes by. Ultimately, what we should aim for as humanity is to hand [the Earth] over to our children in a way that its still usable for them. For me, that was the allegory of the movie.

How did you feel about the ending?

Harmeling: There seems to be some debate about what it was supposed to mean. That youve somehow saved the next generation or that the next generation needs to save itself? I wasnt sure what the message was. In a way, it was a good ending, in the fact that it wasnt completely definitive or a closed book. It left you reflecting on various things, and that is maybe frustrating but pretty effective.

Voigtlnder: I think it was effective. My interpretation was that on the way down to do something for the common good, [Goreng] got blood on his hands and lost his purity. Sometimes to do things for the common good you have to break with your own ideals.

Which of the characters in The Platform do you feel had the approach that would lead to the most favorable outcome for all?

Harmeling: In the end, maybe it is [Goreng] who has the best approach. We come to believe he doesnt get out [of the pit], but hes helped to propel... the child who we assume ended up getting out. Even through his navet, to bring a book to whats essentially a Darwinistic knife fight, maybe in the end love and altruism is really what will win out. Id like to think so anyway.

What one item would you choose to bring?

Voigtlnder: I would have to think about what I would bring but the incentives are clear. You just want to have the most powerful weapon in there.

Harmeling: [Laughs] You know, Id probably do the same thing [as Goreng]. Id probably bring a book of poetry or something like that. As much as I am almost embarrassed to admit that, it would allow me to at least at some moments think other thoughts or remember and reflect on beauty and offer perhaps some motivation and inspiration to try to get through it. Even though I say how naive he was, I wouldnt bring a knife or a gun to that fight either.

Read the original:

'The Platform' explained: Two economists on Netflix phenomenon - Los Angeles Times

As living with the coronavirus becomes the new normal for communities all over the world, artists like Yayoi Kusama and Mo Willems have stepped forward to offer ways to self-soothe or stay entertained while practicing social distancing. Now, David Hockney, one of the most famous and successful living painters in the world, has added his voice to the conversation via a letter he sent to the Daily Mail. Controversially, Hockney is of the opinion that smoking cigarettes could provide people with a defense against the coronavirus, a stance that he backs up by citing data from the outbreak in China that points to fewer smokers being admitted to the hospitalfor COVID-19 treatment.

Smokers have developed an immune system to this virus, Hockney wrote. With all these figures coming out, its beginning to look like that to me. Im serious. Additionally, the artist weighed in on his own mortality. Ive smoked for more than 60 years, but I think Im quite healthy, Hockney added. How much longer do I have? Im going to die of either a smoking-related illness or a non-smoking-related illness, Hockney wrote. While this particular flavor of contemplative nihilism is certainly entertaining coming from one of the most celebrated artists in the world, Hockneys theory that smokers are less likely to get the coronavirus is problematic at best and dangerous at worst.

SEE ALSO: Marina Abramovis Dangerous Work Has Given Her an Interesting Perspective on Coronavirus

The World Health Organization writes that smokers are in fact more likely to be vulnerable to COVID-19, due to the fact that potentially contaminated fingers and cigarettes are coming into frequent contact with a persons open mouth when they smoke. Smokers may also already have lung disease or reduced lung capacity, which would greatly increase risk of serious illness, WHO continues. Additionally, although its clear that more research is warranted, recent studies are beginning to trickle out which indicate that smoking is likely associated with the negative progression and adverse outcomes of COVID-19.

Its possible Hockney swiped his theory from rumors that nicotine has the ability to downregulate the enzyme that binds COVID-19 to humans, which has been getting a decent amount of circulation on Twitter. Its a theory that has little to no scientific basis, particularly in the face of the mounting evidence that smoking increases the risk of COVID-19 symptoms growing more severe. Right now, its important to practice common sense and remember that cigarettes have been proven to be really, really bad for you. Until the world knows enough about coronavirus in order to develop a vaccine, its probably best to assume that smoking wont save you.

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David Hockney Says Smokers Have Developed an Immune System Against Coronavirus - Observer

Dave Pirner is doing just fine. The founding and last original member of Minneapolis alt-rock legends Soul Asylum, Pirner thrived in the late 1980s and well into the 90s on righteous anger and deceptively well-crafted songs. Peaking commercially in the mid-1990s when hits like Runaway Train, Black Gold and Miserywhich is really one of the most underrated singles of the decade, but I digresswere prevalent on radio and the charts, Pirner didnt flame out or fight changing tides into the new millennium. He grew up.

Moving to New Orleans, getting married and having a son gave Pirner a new sense of artistic freedom. Continuing to make music in the 2000s (The Silver Lining in 2006 and Delayed Reaction in 2012, Soul Asylum is set to release the aptly titled Hurry Up and Wait. Its the bands first album since Change of Fortune in 2016, as well as the first since getting a divorce and returning to his hometown stomping grounds of Minnesota.

Sitting in a lounge overlooking an ominously stormy day in the Century City section of Los Angeles, theres a slight unease in the office just days before coronavirus would shut the city down for the foreseeable future. Still, Pirner is in good spirits, cracking open the first craft beer of the interview and chatting about finding a copy of Elvis Costellos Greatest Hits on cassette at a truck stop recently. He looks great, by the way, like he could still post up with the best of them in a game of pickup basketball. Hes as smart and witty as one might imagine, taking everything from his comfy spot in the world of music to the creeping pandemic in stride.

I embraced the no future part of punk rock where there was just kind of nihilism and you didnt worry about what was going to happen the next day, Pirner chuckles about his view of 2020 way back in his bands beginnings. Me and my silly friends from Minneapolis, there was part of us that never thought wed make it to even 30 years old, let alone here.

As talk turns to the Hurry Up and Wait, the first Soul Asylum album recorded at Minneapolis Nicollet Studios in years, the question remains: can you go home again?

That was the question I asked myself every day, Pirner ponders. For so long, I felt like I didnt know where home was. I finally tried to settle down in New Orleans, and that didnt work out. There are certain parts of being back in Minnesota that are surprisingly satisfying, like being able to go see my mom and hanging out with my nephews. Its sort of the polar opposite of New Orleans, which is why I went there in the first place. Im used to six months of winter. You should take advantage of it if you can handle it. Its like living on the moon or something.

Digging into the inspiration of Hurry Up and Wait, Pirner says the process was natural and spontaneous. I cant really explain why, but part of it was being back in Minneapolis, and just being able to hit the studio at a moments notice. I liked being back where I started and feeling comfortable with the band. It was pretty painless.

Before he heads over to Hollywood to dig through some vinyl, Pirner contemplates the career arc of his band from the planet of Minnesota all those years ago maneuvering its way into 2020.

Ive just been playing in this band, and all this crazy shit has happened around the band. I think I was reserved about buying into a lot of it like this isnt gonna last, he sighed. Part of it is a relief. I dont know where any of this is going, but to sort of come out on the other side like, Im still able to do this. My experience in New Orleans was amazing. People down there, they play until they drop dead. So to still be hereits nice. A pleasant surprise.

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Soul Asylum's Dave Pirner on the Band's New Album - SPIN

The New Orleans of early-60s civil-rights battles, with its assortment of right-wing racists, do-gooders, pot-smoking hipsters, and con artists, gave Stone the material for his first novel, A Hall of Mirrors, published in 1967. Stones approach to the sociopolitical situation is utterly oblique, Bell writes. With the characters paying little attention to it, it simply builds itself out of inchoate dark matter, like the late-afternoon New Orleans rainstorms. A Hall of Mirrors traces a geometry that Stone, a master of novelistic architecture, would go on to use many times: He intercuts among three protagonists who drift along on events, almost without agency, sliding downward but struggling toward some meaning that they never reach, gathering great narrative momentum as they converge on a plane of social tension thats headed toward an apocalypse.

Rheinhardt, a juicehead and former clarinet virtuoso who has squandered his talent out of self-destructive spite, arrives in New Orleans by Greyhound in the aftermath of Mardi Gras. He stumbles into a job as an announcer for an ultraconservative radio station, fabricating inflammatory reports that today ought to be called fake news. The station owner, a plutocratic bigot named Bingamon, explains to Rheinhardt: People cant see because they dont have the orientation, isnt that right? And a lot of what were trying to do is to give them that orientation. Bingamons purpose is to incite hatred and start a race war that will crush black peoples political aspirations. Rheinhardt is too lost in private despair to object.

He falls in with Geraldine, a young drifter from West Virginiaone of Stones few successfully realized female characters. For a time, Geraldine and Rheinhardt make a wounded pair in the French Quarter, until he cant bear the intimacy and drives her away. These scenes are full of a strange pathos, as when Rheinhardt notices a cigarette burn on Geraldines stomach and says,

You been ill used. Youre a salamander.

Whys that?

Youre a salamander because you walk through fire and you live on air.

Geraldine closed her eyes.

I wish, she said.

The third protagonist is their upstairs neighbor, Morgan Raineya disturbed seeker after humanness, his own and others, who goes door-to-door conducting surveys in black neighborhoods and becomes the unwitting tool of Bingamons scheme to gut the welfare rolls.

These three meet their separate fates in the novels long climax, Bingamons Patriotic Revival, a stadium rally in which a staged riot spins out of control. Stone was a realistHemingway, Fitzgerald, and Dos Passos were among his influencesand a lifelong believer in the moral valence of fiction; he shunned the surrealism and metafiction of his contemporaries John Barth, Donald Barthelme, and Thomas Pynchon. But A Hall of Mirrors, like much of Stones other work, ends in a hallucinatory spasm of altered consciousness and rhetorical excess. Geraldine, stoned and desperate, searches the stadium in vain for Rheinhardt, who is onstage, wasted, preparing to conduct an imaginary symphony orchestra. On cue, he exhorts the crowd of thousands with a perversion of virtuosity that displays Stones power to combine irony and terror:

Rheinhardts performance is a fun-house mockery of the kind of political theater that has lately risen from underground to occupy the main stage of American life. Years later, Stone said of his first novel: I had taken America as my subject, and all my quarrels with America went into it. They were a lovers quarrels, equal parts longing and disillusionment, held in a tension that never broke either way. Morgan Raineys blighted idealism is as central to Stones vision as Rheinhardts fluent nihilism is.

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A Novelists Ambition to Define America - The Atlantic

Years of Hope, Days of Rage. Its the subtitle of Todd Gitlins history of the 1960s, and a reminder that peace and harmony have never been staples of American life. Self-government is a messy business, a constant collision of interests, ideologies, and primal instincts. Thats particularly true in a nation that was in contravention of its founding principles from its first moment, and that has spent every moment since struggling to make them real. If you look back fondly on a happier, more tranquil time, you are gazing back on a landscape of American mythology.

And yet it feels worse now. Its hard to dispute that, in the words of the oft-mocked Marianne Williamson, theres a dark, psychic force at work in this country today. (This was true even before we were hit by a pandemic, when this story went to press.) By the end of the primary season, the major 2020 presidential candidates that remained were either channeling this energy or attempting to defuse it. Bernie Sanders and Donald Trump constitute two stark expressions of populist ragethe incumbent president as a vessel of fear and resentment of a changing world and Sanders as the next wave of reaction against a system in which so few have taken so much for themselves and left so little for everyone else to scrap over. Only one directed this rage at the material source of our vast structural problems, while the other offered scapegoats. But they both seized on our perilous state of affairs. Joe Biden, meanwhile, reached the end of primary season running on a return to the Decent and the Normal, as a healer who could balm the blisters of rage without truly putting out the fire.

The top 20 percent of American households control 77 percent of all household wealth in this country, more than triple what the middle 60 percent of households control. The wealthiest 1 percent controls $25 trillion all by itself, more than that middle 60 percent190 million peoplehas with $18 trillion. But any recognizable definition of middle class is collapsing anyway, shattered along with many rungs on the ladder of social mobility that undergirds our most intoxicating export, the American Dream. We cannot survive as a nation where ZIP code is destiny, and where a man can pledge to spend a fraction of his $60 billion fortune to make himself the president while more than half of our citizens live paycheck to paycheck and half a million sleep on the streets each night. Fifty-three million Americans are classified as low-wage workers who do not make a living wage44 percent of the workforce and the fastest-growing part of it. We cannot go on when parents no longer believe their children will lead a better life than they did, and while millions feel the whole world slipping away from them. American gross domestic product grew over the last several years while average life expectancy fell, fueled in part by deaths of despair. Hope is a terrible thing to lose.

It is not just Twitter thats making us so angry, nor is it just cable news. Nor is it even the injustice weve accepted since our founding, or the discrimination we continue to allow now. Its not just that real wages have failed to keep up with the rising cost of living for decades, or that televisions have gotten so cheap while the costs of health care and college have exploded. Its not merely that we increasingly get our information from different ecosystems and thus live in separate worlds, unable to communicate with one another and find a way forward. More than all that, we have stripped too many of our people of their hope, and rage and despair flowed readily into the void. Sometimes it even gives way to apathy and nihilism, unreason as defense mechanism. Trolling as politics, food-fight discourse. Even the righteous anger never seems to purify us, providing heat but no light. Perhaps there will come a time when things no longer deepen and darken by the day, as new enemies perpetually corporialize in the shadow of our own creeping delusion. As it stands, the fury threatens to subsume us.

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The American Dream Is Collapsing. Are We Too Angry to Fix It? - Esquire