I am tired/frustrated/surprised when I hear people say “Well, we don’t really know what will happen [about the next 6-12 months].” That simply isn’t true.
A lot of people are going to die. The economy is going to take a brutal hit. An economic hit big enough to spark some sort of systemic financial crisis.
OK, we don’t know the specifics. But we know the above. Does more specificity really matter? Following from that, a grab bag of mostly political and thoughts below.
We May Get a Medical Miracle? But That Won’t Deliver Us an Economic Miracle.
The wild card is some sort of effective treatment like Remdesivir. But even if that bends the curve, it will take a while to ramp production, the healthcare system will still buckle, nd some land mine in Finance still probably goes off. The economic damage will still be huge. A medical miracle would save a lot of lives, but it probably won’t save the incumbents.
Politically, We Already Know a Lot Also.
The election in November will pivot on Healthcare (for sure) and “bailouts” (at least the Democrats messaging). A referendum on February 2020 – November 4th. Like 2008, a bonfire of the incumbents – particularly for the party in charge [Republicans].
Why do we know this? Look at the politics of 2008 – 2010. Voters trashed the party in power every chance they got. In 2008, they drove a wave election for Obama. Obama & Co. then felt their way through the worst of the post-bust economic crisis. They paid a huge political price. The loss of their Senate super-majority (when Scott Brown won Ted Kennedy’s seat in Massachusetts) and the “shellacking” that lost the House in 2010.
11 years later, we’re facing another massive crisis. Expect a similar “throw the bums out” response.
A Bonfire of the Incumbents
In general, this election is going to be “bonfire of the incumbents.” Possibly of both parties. But definitely the party in charge. Anyone who didn’t come into 2020 with a decent approval rating.
In the Senate, Republicans in Colorado, Iowa, Arizona, and Maine are all done. That’s enough to probably give the Senate to the Democrats. Note that Mitch McConnell also has a low approval rating back “home” in Kentucky (a place he only visits occasionally). He faced a credible challenger in Amy McGrath (donate here), but was rated a likely win a few weeks ago. Those polls and projections are now meaningless. The epidemiological charts suggest he’s gone.
In the House, anti-incumbency will probably cut both ways. So lets assume losses on both sides with a Trump-driven tilt against the Republicans. Pelosi stays in power.
Trump is probably toast. Absent a medical and economic miracle, there are too many on-camera mis-statements that will play in a continuous barrage of commercials. In a campaign that will pivot on Healthcare – a serious weakness for him. He can’t even hold rallies (more on that in a later post). And he probably starts lashing out more as the crisis wears on.
Biden’s primary qualification was always “not Trump” more than any particular affection. That worried me a month or so ago. But its probably the perfect message now. “I’m not that objectionable” will be good enough for a whole lot of people to just stay home or (maybe) vote against Trump.
Election 2020 is Now About Healthcare and Bailouts. Or Maybe Bailouts and Healthcare.
Looking ahead from here, the Democratic election messaging will pivot on two issues. Healthcare and “bailouts.” Or maybe “bailouts” and then Healthcare. It depends on how sleazy the next few months of stimulus end up looking.
I almost feel sympathy for the Republicans. They are in the same position Obama found himself in after 2008. Mitch McConnell wrote the playbook for “how to make political hay out of tough governing choices made by the other party.” Nancy and Chuck are following that playbook now.
Take today, where McConnell failed to advance the process in the Senate via a cloture vote blah blah blah. What does that really mean? He’s probably lost the initiative to Pelosi. The House can now pass a bill and send it to the Senate before McConnell can get his own bill passed. He either swallows the House template or he’s on the hook for “obstruction” if he tries to force through his own. Either way, Mnuchin is back to negotiating with Pelosi and she’s pretty good at the dark arts.
Also notice how the Democrats explained their objections – the supposed “slush fund” in the bill. They will make every vote about sleaze – real or imagined. Money to workers and SMB’s are popular. “Bailouts for big business” are not popular. So the party out of power naturally maximizes its support for the popular stuff and minimizes its support for the unpopular. Let the guy in power take out the garbage. Make sure McConnell and Trump own the “bailouts” that the economy (fairly) and their donors (much less fairly) demand.
Re-Branding “Stimulus” as a “Slush Fund”
Look at the politicking around the current stimulus package Stimulus package. Democrats have zeroed in on the $450bn “slush fund” for big company bailouts.
Republicans are trying to avoid disclosing who gets funds until after the election. Why? At least partly because a chunk is going to go to the Trump organization (code word “hospitality industry”). Which might, actually, be totally legit. But there’s no way the Dems are going to let that (or any other bailout) happen in the dark.
The Republicans argue (reasonably) that no company would take government money in 2008-2009 because it signaled higher default risk. There’s a certain irony to seeing them defend a reasonable (but untenable) position for once…
Its a useless fight anyway. Bailout news will leak anyway (especially a Trump bailout). And it will be all the worse politically for leaking.
In terms of the Democratic response, lets say the House passes the same bill as the Senate, but strips out the $450bn for “big business.” Leaving the (smaller?!?) $350bn for small business, the expanded unemployment benefits, and the checks to individuals. “We need to act now to help Main Street America! Wall Street can wait a week or two! A stand-alone own bill with careful protection of taxpayer money! No bailouts! No slush fund!” The speech practically writes itself.
McConnell could pass that House bill. But that would leaving him heavy lifting alone on a stand-alone big business bailout bill. Democrats will label that a “slush fund” no matter how well constructed it is.
Or McConnell spends the next few days/weeks “fighting to preserve the slush fund.” Sucks to be in charge…
We’ll see what happens. But, politically, every delay and mis-step today only helps the Democrats in November. They know that. So expect a lot more drama. And a lot more delay, disguised as a battle against sleaze.
Kelly Loeffler (R – GA) is Toast.
We can already count at least one senate Republican seat as lost. Kelly Loeffler was appointed to fill a vacated seat in 2020. So voters in only-now-pink Georgia don’t know much about her. By November, the ONLY thing they will know about her is her suspiciously well-timed stock sales in February – right after she got a secret Coronavirus briefing. Its probably too late for her to step aside and her Democratic opponent is a bona fide Congressman not a wingnut. Which means he probably takes her seat.