Landlords and tenants have a lot of questions about the state’s eviction moratorium, and the state has few answers so far
by James Drew (4-17-20)
When Wednesday Collier and her partner were laid off last month because of the new coronavirus outbreak, they struggled to pay the rent on their apartment in Olympia.
They didn’t have to worry about losing their home, though. Days earlier, Gov. Jay Inslee had ordered a 30-day moratorium on evictions of residential tenants for nonpayment of rent.
Collier, 24, hadn’t worked enough hours to be eligible for unemployment benefits. Her partner, Joshua Mullins, filed successfully for unemployment and after receiving a $1,200 federal stimulus check, the couple paid their $1,046 rent.
But it was 11 days late. Their landlord charged them a $100 fee, Collier said. She provided a copy of the cashier’s check to The Olympian.
“We can’t be evicted but they can charge us ridiculous late fees still. This needs to stop,” she said in an email Wednesday.
On Thursday, Inslee extended the eviction moratorium through June 4. He also added two major temporary provisions — a ban on landlords charging, or threatening to charge, late fees for non-payment of rent. Tara Lee, an Inslee spokeswoman, said tenants who have paid late fees can get their money back because that provision in Thursday’s proclamation is retroactive to Feb. 29.
The new proclamation prohibits landlords from increasing rents or deposits for residential tenants, as well as for commercial properties as long as those tenants have been impacted by COVID-19.
“People have lost their livelihoods through no fault of their own and we must continue to take steps to ensure they don’t also lose the roofs over their heads,” Inslee said in a written statement.
“Continued support and protection for tenants is the right thing to do and I am extending and expanding the moratorium on evictions through the beginning of June, which will allow for two additional rent cycles,” he added.
State Rep. Andrew Barkis, R-Olympia, tweeted Thursday night about Inslee’s announcement: “How about getting the economy going again so people can afford to pay for their living expenses! This is overreach and will be detrimental to those providing housing.”
Barkis, who owns a property management firm, said Friday: “We supported the prohibition to give people a little bit of grace on that first 30 days on the eviction. Now [Inslee] is doing policy via proclamation, and he’s usurping the legislative process.”
The rent freeze covers commercial properties if the tenant has been impacted by COVID-19, such as being unable to work or the tenant’s business had to close because it was deemed “non-essential” by Inslee last month. His stay-at-home and partial business closure order runs through May 4.
The expansion of the moratorium on residential evictions for non-payment of rent prohibits landlords from treating unpaid rent and charges as an enforceable debt.
The exception is if the landlord can provide evidence to a court that the resident was offered and refused or failed to comply with a reasonable repayment plan.
“All rent payments delayed through this moratorium will still be owed but a landlord must offer a tenant a reasonable repayment plan to enforce any collection of that debt,” the governor’s office said.
Attorney General Bob Ferguson said his office has received 525 complaints about landlords allegedly violating the eviction moratorium since Inslee first ordered it on March 18. The attorney general’s office has contacted 406 tenants and 216 landlords and property managers, according to Ferguson. He has added 15 assistant attorneys general to help his civil rights team respond to complaints.
“That goes from things that are deeply concerning as in putting pressure on tenants. ‘Hey, we know you’ve received your stimulus check or that’s coming in the mail soon. We’re expecting you to use that to pay the rent.’
“To step up even more, ‘hey, we’re going to issue a late fee every day of $50 you don’t pay. Hey, this is going to impact your credit,’ using threatening language. All the way up to what we’ve seen is the most egregious, which is the property management company sending out 14-day pay-or-vacate notices. We saw that in Boulders in Tacoma,” Ferguson said.
The News Tribune reported Wednesday that the attorney general’s office ordered Boulders at Puget Sound to stop sending emails, calling and posting notices to doors stating that residents need to pay rent or vacate, which violates Inslee’s eviction moratorium.
Tenants have expressed concern about whether the end of the moratorium would trigger a wave of eviction, said Carrie Graf, a staff attorney with the Northwest Justice Project, Washington’s largest publicly-funded legal aid program
That is an anxiety that Collier has felt. She’s waiting for her federal stimulus check, but says it would pay for only one month of rent.
She doesn’t know when she’ll be able to return to her job at an ice cream shop. It’s also unclear when the restaurant where her partner works as a manager will reopen its doors.
Collier said she welcomed Inslee’s announcement Thursday to extend the eviction moratorium for nonpayment of rent and expand it to prohibit landlords from charging late fees.
“It’s great that it happened, but it should have been put in the initial moratorium. We all knew that landlords would take advantage of that,” she said.
Collier said an office employee at her apartment complex said the $100 would be returned as a credit on her account.
In part citing ‘increasingly hostile behavior’ by some riders, IT explains move to reservation-only Wire fencing surrounds Intercity Transit’s Olympia Transit Center downtown on April 14, the day after the agency began reservation-only service for riders taking “essential trips.”
by SARA GENTZLER (4-16-20)
Sara Gentzler joined The Olympian in June 2019. She primarily covers Thurston County government and its courts, as well as breaking news. She has a bachelor’s degree in journalism from Creighton University. 360-754-5459
Intercity Transit has provided more detail regarding its decision to temporarily move to reservation-only service for essential trips during the coronavirus outbreak in a note posted to the agency’s website.
Other attempts at limiting ridership to protect the health of riders and employees during the COVID-19 outbreak weren’t having enough of an impact, and some riders were becoming increasingly hostile in the face of tighter rules, the note reads.
The shift in service represents a U-turn for the public transit agency, which serves Olympia, Lacey, Tumwater, and Yelm and had been celebrating increased ridership.
After implementing its zero-fare policy earlier this year, IT ridership increased by 20% for January 2020 over January 2019. Then, the transit agency suddenly needed to decrease ridership in the name of public health and social distancing.
Ridership declined, the agency writes in its note, especially when Gov. Jay Inslee’s “Stay Home, Stay Healthy” order closed all but essential businesses. But buses were still too crowded. The agency tried tactics such as running extra shuttles to ease crowds, but that didn’t work.
“Waiting for the next bus, which could also be full, left riders stranded instead of getting them to work and their appointments on time or allowing them to complete their essential tasks,” the note reads.
Some people also ignored public health guidance and rode buses without a destination, transferred bus-to-bus to ride continuously, and became “increasingly aggressive and hostile” when IT workers tried to curb the behavior, according to the agency.
A stark example of that hostility: People were shot at while trying to replace a broken window — which had been shot out previously — at the downtown Olympia Transit Center April 2.
Nobody was hurt and a weapon was found at a nearby location, according to IT spokesperson Nicky Upson. It’s not yet known whether that weapon was involved in the incident — Olympia Police are investigating, Upson said.
Starting this week, people who need transportation for essential trips need to make reservations with IT two to five days in advance by calling customer service at 360-786-1881 or emailing DALdispatch@intercitytransit.com.
The agency scheduled 2,000 trips for the first week under the new operations, Upson told The Olympian, averaging in the high 300s or low 400s every day, which she said was manageable for the agency.
“What we’re seeing is that about 80% of those trips are for work, and 20% are for essential trips,” such as trips to the grocery store or pharmacy, Upson told The Olympian.
The agency also has reached agreements with three community groups to ensure their clients are served, Upson said.
One example of such an agreement: At a Board of County Commissioners work session Tuesday, Keylee Marineau, Homeless Prevention and Affordable Housing Coordinator for the county, said IT worked with Sacred Heart Catholic Church to arrange for a Community Van to transport people to the church in Lacey so they can take advantage of the hygiene services offered there.
Margaret Cirko has been charged with felony counts of terrorist threats, threats to use a “biological agent’ and criminal mischief for intentionally coughing on produce at a grocery store. (Hanover Township Police Department)
LUZERNE COUNTY, Pa. (3-28-20) – A woman has been arrested and charged after police say she coughed on $35,000 worth of produce at a grocery store in Pennsylvania.
Margaret Cirko has been charged with felony counts of terrorist threats, threats to use a “biological agent’ and criminal mischief.
Pennsylvania grocery store out more than $35,000 after woman intentionally coughs on food A grocery store in Hanover Township, Pa. says a woman, who the police know to be a chronic problem in the community, purposely coughed on fresh produce and a small section of its bakery, meat case and grocery section.
She was also charged with misdemeanor counts of criminal attempt to commit retail theft and disorderly conduct.
Cirko reportedly went into the store, threatened staff while she was sick and intentionally coughed and spat on merchandise.
She then tried to steal a 12-pack of beer from the store before being ordered to leave. Her bail is set at $50,000.
The grocery store threw away all of the produce and employees were forced to clean and disinfect everything.
“As ye have treated the least of these…”
Turn your back on the homeless, the sat upon, spat upon, ratted on…and the virus may just bite you (and yours) in the ass for it. A pandemic of Biblical proportions calls upon us to reconsider not only if we are our brother’s keeper, but whether each/all of us are only as strong as the weakest link when it comes to public health and welfare.
Inequality means that some people must live near sources of air pollution, such as a steel mill, in Detroit—which in turn weakens their lungs and means that they can’t fight off COVID-19.
by Bill McKibben (4-16-20)
Bill McKibben, a contributing writer to The New Yorker, is a founder of the grassroots climate campaign 350.org and the Schumann Distinguished Scholar in environmental studies at Middlebury College. His latest book is “Falter: Has the Human Game Begun to Play Itself Out?” He writes The Climate Crisis, The New Yorker’s newsletter on the environment.
The coronavirus pandemic has revealed one particularly shocking thing about our societies and economies: they have been operating on a very thin margin. The edifice seems so shiny and substantial, a world of silver jets stitching together cities of towering skyscrapers, a globe of soaring markets and smartphone connectivity. But a couple of months into this disease and it’s all tottering, the jets grounded and the cities silent and the markets reeling. One industry after another is heading for bankruptcy, and no one knows if they will come back. In other words, however shiny it may have seemed, it wasn’t very sturdy. Some people—the President, for instance—think that we can just put it all back like it was before, with a “big bang,” once the “invisible enemy” is gone. But any prosperity built on what was evidently a shaky foundation is going to seem Potemkinish going forward; we don’t want always to feel as if we’re just weeks away from some kind of chaos.
So if we’re thinking about building civilization back in a hardier and more resilient form, we’ll have to learn what a more stable footing might look like. I think that we can take an important lesson from the doctors dealing with the coronavirus, and that’s related to comorbidity, or underlying conditions. It turns out, not surprisingly, that if you’ve got diabetes or hypertension, or have a suppressed immune system, you’re far more likely to be felled by covid-19.
Societies, too, come with underlying conditions, and the two that haunt our planet right now are inequality and ecological turmoil. They’ve both spiked in the past few decades, with baleful results that normally stay just below the surface, felt but not fully recognized. But as soon as something else goes wrong—a new microbe launches a pandemic, say—they become starkly evident. Inequality, in this instance, means that people have to keep working, even if they’re not well, because they lack health insurance and live day to day, paycheck to paycheck, and hence they can spread disease. Ecological instability, especially the ever-climbing mercury, means that even as governors try to cope with the pandemic they must worry, too, about the prospect of another spring with massive flooding across the Midwest, or how they’ll cope if wildfire season gets out of control. Last month, the U.S. Forest Service announced that, owing to the pandemic, it is suspending controlled burns, for instance, “one of the most effective tools for increasing California’s resiliency to fire.” God forbid that we get another big crisis or two while this one is still preoccupying us—but simple math means that it’s almost inevitable.
And, of course, all these things interact with one another: inequality means that some people must live near sources of air pollution that most of us wouldn’t tolerate, which in turn means that their lungs are weakened, which in turn means they can’t fight off the coronavirus. (It also means that some of the same people can lack access to good food, and are more likely to be diabetic.) And, if there’s a massive wildfire, smoke fills the air for weeks, weakening everybody’s lungs, but especially those at the bottom of the ladder. When there’s a hurricane and people need to flee, the stress and the trauma can compromise immune systems. Simply living at the sharp end of an unequal and racist society can do the same thing. And so on, in an unyielding spiral of increasing danger.
Since we must rebuild our economies, we need to try to engineer out as much ecological havoc and inequality as we can—as much danger as we can. That won’t be easy, but there are clear and obvious steps that would help—there are ways to structure the increased use of renewable energy that will confront inequality at the same time. Much will be written about such plans in the months to come, but at the level of deepest principle here’s what’s key, I think: from a society that has prized growth above all and been willing to play fast and loose with justice and ecology, we need to start emphasizing sturdiness, hardiness, resiliency. (And a big part of that is fairness.) The resulting world won’t be quite as shiny, but, somehow, shininess seems less important now.
Passing the Mic
Mary Annaïse Heglar is one of the freshest and most important voices in the climate movement. She’s the writer-in-residence at Columbia University’s Earth Institute in partnership with the Natural Resources Defense Council. Her personal essays—most of which revolve around themes of climate justice—are some of the most engaging writing I know on a subject that often inspires earnestness; a recent favorite was in Wired magazine. This interview has been condensed for clarity.
You say, “The facts have been on our side for a very long time, but we’re still losing.” Why?
The science on climate change has been crystal clear for literally decades. As Amy Westervelt has illustrated beautifully, on her podcast “Drilled,” the fossil-fuel companies knew that before anyone else. James Hansen testified before Congress thirty-two years ago. The United Nations Framework Convention on Climate Change (the precursor to the Paris Agreement) dates back to 1992. We didn’t wind up in a climate crisis for lack of information, or even for lack of clearly communicated information. What was done was not done out of ignorance—it was done out of malice and greed. If all we had to do was have the right facts, we’d have been done a long time ago.
People feel as if they can’t take part in the fight because they’re not scientifically inclined. What do you tell them?
What I tell them is, “Girl, me, neither!” But you don’t need a scientific background or inclination to be part of the climate movement or conversation. This is not about science; it’s about justice. The science proves the severity of the injustice, sure, but it’s not the entire story. There’s a place for everyone in the climate movement because everyone, even the smallest toddler, understands the concept of “no fair.”
Everyone always asks me, “What should I be doing as an individual?” But is that even the right way to frame the question?
I get that question all the time, too, and it’s really frustrating. As I argue in my article, if you’re ready to graduate beyond the things that everyone should be doing—like cutting your carbon footprint, and voting for the climate, and showing up to demonstrations—then you’ve reached the point where you’re ready to become a bona-fide climate person. That means you’re past the one-size-fits-all activism. It’s time for your activism to mold to you, and only you can do that. No one told Greta [Thunberg] to strike, no one told Jamie and Nadia [the teen-age climate activists Jamie Margolin and Nadia Nazar] to help start Zero Hour. They just did it. No one told me to write—in fact, plenty of people told me not to! There’s so much to be done on climate, and so much that the people already involved with it haven’t thought of. There’s so much room for new ideas and new voices, so if you’re a new or aspiring climate person, you’re right on time. The better question would be “What can I do next?” An even better question would be “How did you find your niche in climate?” And then take those answers and carve out your own niche.
Climate School
As Earth Day approaches, Denis Hayes, who spearheaded the original observance, in 1970, writes in the Seattle Times about what had been the plans for a mass fiftieth-anniversary day of action next week. The activities will be going online, instead, at EarthDayLive, but Hayes points out that we’ll get a real chance to show our commitment on November 3rd. His essay is worth looking at for the vintage photographs alone, but he adds an aside that I didn’t know: just days after the original protest, in which some twenty million Americans participated, the escalation of the war in Cambodia and the shootings at Kent State drove it out of the news.
Cutting down rain forests is a bad idea because it helps wreck the climate. It also increases the chances that diseases will jump from animals to humans, according to a new Stanford study. The veteran writer David Quammen distills some of those lessons in a new interview, based on his book “Spillover,” from 2012. I confess that I had no idea that one in four mammal species on our planet was a bat.
The Times has a doleful piece on Nepali climate migrants leaving their home villages because of the Himalayan drought. According to one official, ongoing bouts of extreme weather across the region threaten to “reverse and undermine decades of development gains and potentially undermine all our efforts to eradicate poverty.”
ScoreboardPresident Trump keeps rolling back environmental regulations, but one of the few silver linings to the incompetence of this Administration is that it frequently manages the rollbacks with the same flat-footedness that it brings to, say, epidemiology. This means that the courts often overturn them; last week the U.S. Court of Appeals for the D.C. Circuit restored a regulation that prohibited businesses from using chemicals in refrigeration systems that contribute to climate change.
In Kansas (of all places), a judge appointed by the former far-right governor Sam Brownback (of all people) ruled that the utilities could not charge people a monthly fee more for putting solar panels on their roofs. The surcharge—similar to plans put in place across the nation by utilities who fear that the quick penetration of solar power will undercut their revenues—would have in some cases extended the time it takes for residents to pay off their systems from thirteen years to thirty-nine. That the judge was the appointee of an anti-environmental governor makes the ruling “almost a cherry on top of an ice-cream sundae,” as one advocate put it.
Warming Up
Judy Twedt, a Ph.D. candidate at the University of Washington, managed to put the Keeling Curve of rising carbon dioxide to music—“it gets screechy at the end,” she admits, as the numbers keep rising. Here’s a short interview with her, and her tedx talk, and her home page, where you can check out the score she made from the data record of melting sea ice.
A Guide to the Coronavirus
How to practice social distancing, from responding to a sick housemate to the pros and cons of ordering food.
When COVID-19 recedes, it will leave behind a severe economic crisis. But, as always, some people will profit.
By Nick Paumgarten. (April 13, 2020)
Nick Paumgarten has been a staff writer at The New Yorker since 2005. Prior to that, he was an editor of the Talk of the Town. He has reported on a wide range of subjects, including politics, finance, art, music, food, technology, mountaineering, sports-talk radio, elevators, boxer-bartenders, commuters, and canoes.
The investor who calls himself the Australian headed out for a walk on his farm in the Alps of New South Wales, three hundred miles south of Sydney. This was a morning in late March. He’d been holed up there for a month with his wife and three kids, plus two portable oxygen units and a store of hydroxychloroquine. “But my intention is not to get it,” he said, of covid-19. “I don’t plan to see anyone until October.” He was talking on a cell phone. You could hear the caw of crows in the background, and the luffing of the wind. “I only see four other people in the valley. If I need to kill them, I will.” One assumed, from the way he laughed, that this was a joke.
The Australian, who spoke on the condition that his name not be used, is a voluble redhead just shy of fifty. “Billions dude looks like me,” he wrote, in a WhatsApp message accompanied by a pair of photos. He did indeed resemble Damian Lewis, the actor who plays a hedge-fund magnate in the Showtime series “Billions.” “He stole my look.” Reared in Sydney, the Australian moved to New York in 1994, when he turned twenty-two, to trade commodities at Goldman Sachs. At JPMorgan, he and a couple of his countrymen—known as the Aussie mafia—earned the firm hundreds of millions in profits during the early months of the financial crisis, in 2008. In 2015, he moved to Singapore. Proximity to China, a bearish disposition, and an interest in the history of virulent diseases led him to pay special attention to the effects that recent outbreaks had had on financial markets. sars, H1N1, Ebola. Last October, he listened to an audiobook by the Hardcore History podcaster, Dan Carlin, called “The End Is Always Near.” “So I had pandemics and plagues in my head,” the Australian said. “In December, I started seeing the first articles about this wet-market thing going on in China, and then in early January there was a lot on Twitter about the shit in Wuhan.” He was in Switzerland on a ski holiday with his family, and he bought all the surgical masks and gloves he could find. On the flight back to Australia, he and his wife wore some, to the bewilderment of other passengers.The New Yorker’s coronavirus news coverage and analysis are free for all readers.
He quickly put some money to work. He bought a big stake in Alpha Pro Tech, one of the few North American manufacturers of N95 surgical masks, with the expectation that when the virus made it across the Pacific the company would get government contracts to produce more. The stock was trading at about three dollars and fifty cents a share, and so, for cents on the dollar, he bought options to purchase the shares at a future date for ten dollars: he was betting that it would go up much more than that. By the end of February, the stock was trading at twenty-five dollars a share. He shorted oil and, as a proxy for oil, the Canadian dollar. (That is, he bet against both.) Finally, he shorted U.S. equities.
“You don’t know anyone who has made as much money out of this as I have,” he said over the phone. No argument here. He wouldn’t specify an amount, but reckoned that he was up almost two thousand per cent on the year.
Emboldened by vindication, the Australian, walking through the countryside, laid out his prognosis for the United States and the world. America needed to “rip off the Band-Aid,” he said. The federal government should close the borders, shut off all international commerce, declare martial law, deploy the military to build field hospitals and isolation wards, and arrest or even fire on anyone who didn’t abide by a stay-in-place protocol. (“In 1918, in San Francisco, a cop shot someone in broad daylight for being outside without a face mask, and the cop was celebrated for it!”) Or perhaps the government should reward each citizen who strictly observed the quarantine with fifty thousand dollars. “The virus would burn out after four weeks,” he said. The U.S. had all the food and water and fuel it would need to survive months, if not years, of total isolation from the world. “If you don’t trade with China, they’re screwed,” he said. “You’d win this war. Let the rest of the world burn.” The problem, he said, was that, perhaps more now than ever, Americans lack what he called “social cohesion,” and thus the collective will, to commit to such a path. “Plus, you have guns. Lots of guns. And all the base materials for your drugs, like ninety-seven per cent, come from China.” He predicted that any less stringent measures—the slow removal of the Band-Aid that we are experiencing now—would result in social unrest bordering on civil war, and the decimation of our medical ranks. “So suddenly everyone who’s seen ‘House’ would be a doctor,” he said. Politically, the Australian considered himself well right of center, yet he thought it ridiculous that the United States doesn’t have nationalized health care. He predicted the cancellation of the Presidential election, or Donald Trump’s resignation, or the creation of an emergency leadership council, to which, throughout the conversation, he nominated Generals Mattis and Petraeus, Bill Gates, and Gary Cohn, for whom the Australian had worked at Goldman Sachs. “You could have either four weeks of pain and a future boom or years of this rolling bullshit and a depression. But people are just selfish. They’re not thinking. They’re morons.”
It was one such moron, an old friend of mine, who had introduced me to the Australian. They’d overlapped at Goldman Sachs. I’d been eavesdropping for a week on the friend’s WhatsApp conversation with dozens of his acquaintances and colleagues (he called them the Fokkers, for an acronym involving his name), all of them men, most of them expensively educated financial professionals, some of them very rich, a few with connections in high places. The general disposition of the participants, with exceptions, was the opposite of the Australian’s. Between memes, they expressed the belief, with a conviction that occasionally tipped into stridency or mockery, that the media, the modellers, and the markets were overreacting to the threat of the coronavirus—that it was little more than another flu, and that effectively shutting down the economy to prevent, or at least slow, the spread of the virus would turn out to be far more harmful, in the long run, than the virus itself. “The biggest own goal in memory,” one Fokker wrote.
“Suicide due to innumeracy,” another noted.
They constituted a sample of the-cure-is-worse-than-the-disease segment of the population, and, on the day of my conversation with the Australian, President Trump appeared to be steering hard their way. Defying the dire prognostications and pleadings of the medical establishment, Trump threw out there that businesses would soon reopen and that economic activity might kick in again by Easter. (Oh, well.) In the next few days, it was perhaps this prospect, as well as the unprecedentedly large two-trillion-dollar stimulus package passed in the Senate, that caused the stock market to rally, after one of the most precipitate collapses in its history. (As a general rule, despite the assertions of the financial media, it is difficult to say with any certainty which relevant facts or sentiments may make the market indices go up or down on any given day.) On March 26th, when the Labor Department reported that a record 3.3 million Americans had filed jobless claims the previous week—as if every man, woman, and child in Philadelphia and Phoenix suddenly joined the breadline—both the Dow Jones Industrial Average and the S. & P. 500 shot up more than six per cent. The crosswinds were fierce.
Meanwhile, New York’s health-care system was sinking into chaos, as covid-19 cases swamped hospitals. That day, there were more 911 calls than there had been on September 11, 2001. Some Fokkers, however, felt that it was important not to get swept up in apocalyptic tales or media reports, or to fall for the Chicken Littles. They mocked Jim Cramer, the host of the market program “Mad Money,” on CNBC, for predicting a great depression and wondering if anyone would ever board an airplane again. Anecdotes, hyperbole: the talking chuckleheads sowing and selling fear.
As in epidemiology, the basis of the financial markets, and of arguments about them, is numbers—data and their deployments. Reliable data about covid-19 have been scarce, mainly because, in the shameful absence of widespread testing, no one knows how many people have or have had the virus, which would determine the rate of infection and, most crucially, the fatality rate. The numerator (how many have died) is known, more or less, but it’s the denominator (how many have caught it) that has been the object of such speculation. If I had a roll of toilet paper for every finance guy’s analysis of the death rate I’ve been asked to read, I’d have toilet paper. Most of these calculations, it seems, are arguments for why the rate is likely to be much, much lower than the medical experts have concluded. The less lethal it is, the better the comparison to the flu, and therefore the easier it is to chide everyone for getting so worked up over it. As Lawrence White, a professor of economics at George Mason University, tweeted, “Almost everyone talking about the #coronavirus is displaying strong confirmation bias. Which only goes to prove what I’ve always said.”
Still, it’s hard for a coldhearted capitalist to know just how cold the heart must go. Public-health professionals make a cost-benefit calculation, too, with different weightings. What’s the trade-off? How many deaths are tolerable? Zero? Tens of thousands, as with the flu? Or whatever number it is that will keep us from slipping into a global depression? The public-health hazards of deepening unemployment and poverty—mental illness, suicide, addiction, malnutrition—are uncounted.
Financial people love to come at you with numbers, to cluck over the innumeracy of the populace and the press, to cite the tyranny of the anecdote and the superior risk-assessment calculus of the guy who has an understanding of stochastic volatility and some skin in the game—even when that skin is other people’s. But while risk and price are intertwined, value and values are something else entirely. It can be hard to find the right math for those.
In the months following the first tidings of covid-19 from China, Trump played down its potential impact—attempting to jawbone a virus, or at least the perception of it. But a virus, unlike a President, doesn’t care how it’s perceived. It gets penetration, whether you believe in it or not. By the time, later in March, that he acknowledged the scale of the pandemic (and sought to convince those who hadn’t been paying attention that he’d been paying attention all along, except to the extent that he’d been distracted), it had long been abundantly clear that he cared more about the economic damage—even if it was only in relation to his reëlection prospects, or to the fate of his hotel and golf-resort businesses—than about any particular threshold regarding loss of life or the greater good. Others, perhaps on his behalf, have tried to expand his position. For a few days, the message, reinforced by the likes of Glenn Beck (“I’d rather die than kill the country”) and Dan Patrick, the soon-to-be-seventy lieutenant governor of Texas (“If that’s the exchange, I’m all in”), was that we might have to sacrifice our elders for the sake of the economy. The politics of it were perverse. Many of the same people who had cited “death panels” in the fight against Obamacare were now essentially arguing the opposite. One man’s cost controls are another man’s eugenics.
For Trump, the economy is basically the stock market. He’s obsessed with it, much the way he fixates on television ratings. The stock market is, among other things, a great mood indicator. But it isn’t the economy—not even close. As we’re now discovering, to more horror than surprise, the cessation of commercial activity—travel, tourism, entertainment, restaurants, sports, construction, conferences, or really any transactions, in significant volume, be they in lawyering, accounting, book sales, or sparkplugs—means no revenue, no ability to make payroll or rent, mass layoffs, steep declines in both supply and demand, and reverberations, up and down the food chain, of defaults on debt. That’s the economy.
This brutal shock is attacking a body that was already vulnerable. In the event of a global depression, a postmortem might identify covid-19 as the cause of death, but, as with so many of the virus’s victims, the economy had a preëxisting condition—debt, instead of pulmonary disease. Corporate debt, high-yield debt, distressed debt, student debt, consumer debt, mortgage debt, sovereign debt. “It’s as if the virus is almost beside the point,” a trader I know told me. “This was all set up to happen.”
The trader was one of those guys who had been muttering about a financial collapse for a decade. The 2008 bailout, with the politically motivated and, at best, capricious sorting of winners and losers, rankled, as did the ongoing collusion among the big banks, the Federal Reserve, and politicians of both parties. He’d heard that the “smart money,” like the giant asset-management firms Blackstone and the Carlyle Group, was now telling companies to draw down their bank lines, and borrow as much as they could, in case the lenders went out of business or found ways to say no. Sure enough, by March’s end, corporations had reportedly tapped a record two hundred and eight billion dollars from their revolving-credit lines—a “revolver frenzy,” as the financial blog Zero Hedge put it, in publishing a list of the companies “that managed to get their money in time.” Corporate America had hit up the pawnshop, en masse. In a world where we talk, suddenly, of trillions, two hundred billion may not seem like a lot, but it is: in 2007, the subprime-mortgage lender Countrywide Financial, in drawing down “just” $11.5 billion, helped bring the system to its knees.
It is hard to navigate out of the debt trap. Creditors can forgive debtors, but that process, especially at this level, would be almost impossibly laborious and fraught. Meanwhile, defaults flood the market with collateral, be it buildings, stocks, or aircraft. The price of that collateral collapses—haircuts for baldheads—leading to more defaults. The market in distressed debt has already ballooned to about a trillion dollars.
As April arrived, businesses, large and small, decided not to pay rent, either because they didn’t have the cash on hand or because, with a recession looming, they wanted to preserve what cash they had. Furloughed or fired employees, meanwhile, faced similar decisions, as landlords sent threatening reminders. Would property owners, without their monthly nut, be able to finance their own debts? And what of the banks, with all the bad paper? In the last week of March, an additional 6.6 million Americans filed jobless claims, doubling the previous week’s record. In New York State, where nearly half a million new claims had been filed in two weeks, the unemployment-insurance trust began to teeter toward insolvency. Come summer, there would be no money left to pay unemployment benefits.
As the stock markets tanked, and the bond markets freaked out, the klaxons of doom broke the spell of what had been a kind of perpetually rattled complacency. For three years, Trump’s fits and provocations—and even his protectionist policies toward traditional trading partners—had failed to knock the markets off course for any prolonged stretch. The markets, the reasoning went, liked Trump—or at least his tide of deregulation, business-friendly tax policies, and the regimen (which, of course, predated his Presidency) of low interest rates and easy money.
On March 20th, Goldman Sachs spooked the world, by predicting a twenty-four-per-cent decline in G.D.P. in the second quarter, a falloff in activity that seemed at once both unthinkable and inevitable. Subsequent predictions grew even more dismal. The service sector—the economy’s real mainstay—would be hit the hardest, and the implications for people’s jobs, and their ability to pay for things, were dire. In an e-mail exchange among some of my old schoolmates—an orthopedic surgeon forced to all but shut down his practice because of the interruption of elective surgeries, a commercial-real-estate guy firing hundreds of employees—a futures trader wrote, “Sell everything that isn’t nailed down.” Earlier in the week, notes from a Goldman call, with talk of terrible numbers, had leaked out onto the Street. A couple of the Fokkers, on the basis of no evidence except decades of experience, suspected Goldman of sowing fear in order to profit. They certainly thought that was what Bill Ackman, the hedge-fund billionaire, had done: he went on CNBC and said, “Hell is coming.” He predicted that the nation would enter a depression if the White House didn’t take drastic measures. Hotel chains would go out of business; Hilton’s stock would go to zero. The Fokkers, watching from their home trading stations, mocked him:
“Now Ackman is in tears.”
“He sounds unhinged.”
“Irresponsible. . . . Wanker.”
“In an industry of cocks, he’s one of the great ones.”
Like the Australian, Ackman advocated a shutdown of the global economy. And, like the Australian, he had profited from his pessimism. A week after his appearance on CNBC, his firm, Pershing Square Capital Management, announced that it had netted $2.6 billion (on an investment of just twenty-seven million dollars) on bearish credit bets, which paid off if certain bundles of loans declined in value. This news enraged the Fokkers; they felt that he’d been scaring people, for money. (They were more comfortable with those who would reassure people, for money.) But, by then, Ackman told me, he’d plowed most of his proceeds back into the stock market. “Our hedge had already paid off prior to my going on CNBC,” he said.
Since last year, I’ve been receiving daily mass e-mails from a retired hedge-fund manager named Whitney Tilson. We’d met walking our dogs in the Park, back when talking to strangers was a thing. We chatted about mountain climbing and an attempt he’d made to become a contestant on “Survivor.” He added me to his list. Most of his e-mails recounted his exploits and his travels as an outdoor enthusiast—fitness advice and selfies of him climbing and hiking and skiing and running triathlons and doing Tough Mudders. Advertisements for his investment newsletter began sprouting up on some of my favorite Web sites.
Tilson is a close friend of Ackman’s, from their days as undergraduates at Harvard, in the late eighties, when they sold ads for the “Let’s Go” travel guides. On March 27th, Tilson declared in his newsletter that Ackman had “just made the greatest trade of all time.” He was a little envious. “Was it really so hard to see on February 19, only 37 days ago, when the S&P hit an all-time high and credit spreads were close to all-time lows, that the coronavirus might be a big problem?” he wondered.
Yet, on March 9th, when it was even less hard to see that the coronavirus might be a problem, the subject line of Tilson’s daily e-mail had read, “I think the current panic over the coronavirus is one of the most irrational things I’ve ever seen.” He wrote, “Many times throughout my career, when such irrationality has manifested itself in financial markets, leading to big sell-offs, I’ve taken advantage—and made tens of millions of dollars for my investors.” He noted that he was writing a book called “All I Want to Know Is Where I’m Going to Die: The Five Calamities That Can Destroy Your Life and How to Avoid Them.” A pandemic was not one of the five.
Tilson wrote that, except for the elderly with additional health problems, “I can find no evidence that the risk of serious illness or death from the coronavirus for the overwhelming majority of Americans is anything but infinitesimal—like one in million.” He went on, “Therefore, unless new, contradictory evidence emerges, I think that the vast majority of Americans can safely go about their lives as usual. That’s exactly what my family and I are doing. I took three flights last week to Tampa, Chicago, and Jackson, WY. Susan and Katharine flew to London last Thursday and returned yesterday evening. They reported that everything there was completely normal. (Gotta love the stoic Brits—keep calm and carry on!) Emily flew from Newark to join me in Jackson today. I rode a dozen times on a gondola today with strangers (as Emily and I will be doing every day this week).”
Putting aside the fact that luxury ski resorts in Europe and North America were already emerging as super-spreaders (“Après-ski is a virus spewer,” an Austrian epidemiologist said of Ischgl, formerly the Ibiza of the Alps and now its Wuhan), Tilson’s apparent disregard for the commonweal touched a nerve with his readers, who flooded him with angry replies. “I think you are totally wrong and causing harm,” Ackman told him. “This makes you look incredibly ignorant.” Like Mayor Bill de Blasio, who, slow on the draw, had urged New Yorkers to “go about your lives,” as the corona clouds massed, before grudgingly coming around, Tilson began to revise his opinions, as well as his tone. Soon he was volunteering to help build a field hospital in Central Park’s East Meadow, across the street from Mount Sinai Hospital and his apartment building. “I’m working so hard that I’ve lost five pounds (going from 169 to 163),” he wrote, on April 2nd, proving that innumeracy is contagious. “Can you believe we all used to pay for workout classes?”
The Fokkers found it hard to let go of the conviction that the crisis was overblown, and that the shutdown could do more harm than good. One of the more clamorous champions of this opinion went quiet for a while, as he battled the virus at home, in some terror over his mounting inability to breathe. Another had a cousin on a re-breather, a firefighter who’d worked the pile at Ground Zero. And yet within a week both of them were sharing a wish that there were a way to short the price of ventilators in June or September, in the belief that we wouldn’t need nearly as many as the governors of the most beleaguered states were claiming. Someone floated the idea of a job-losses-per-death calculation. Hope was expressed: in the levelling off of death rates in Italy; in the F.D.A.’s emergency approval of the experimental treatment of hydroxychloroquine; in the antibody tests coming out of the United Kingdom, which might determine who’d had the virus, and therefore who was immune and able to rejoin the workforce. Perhaps “the manufactured hysteria,” as one investor put it, was finally collapsing.
But no one doubted that, in economic terms, the situation was grave almost beyond imagining. A fund manager wrote, “Virus is like a huge sink hole in global economy. No one (not even anyone on this chat!) knows how big/deep it is. And every day world in lockdown it gets bigger and deeper. Policy makers also have no clue, but they have to do something, so they have started shoveling fiscal and monetary ‘dirt’ into hole. If hole bigger than dirt, we get deflation and you do the obvious. If dirt bigger than hole, you get . . . inflation. And if by complete dumb luck, dirt=hole, back to Goldilocks.” He reckoned “hole>dirt.”
Either way, it’s going to require a lot of fill. Whether you favor or abhor deficits, whether you’re a Keynesian, a Hayekian, or an advocate of Modern Monetary Theory, we have little choice at this point except to run up a huge deficit to fund rescue and stimulus on an unprecedented scale. This is the world we’ve made, or that our parents and grandparents have. There’s no real constituency now for austerity.
Another fund manager on the Fokker chain was modelling this behavior, on his own balance sheet. His advice: Borrow as much as you can. Mortgage everything. With interest rates at historic lows, you could accumulate cash and have money on hand to buy distressed assets on the cheap, whether they’re stocks, bonds, or real estate, and be well positioned to make money again when the world got back to work. This too shall pass, the old-timers said, as they always did. During the grimmer days of the 2008 financial crisis, most investors had hesitated as their more intrepid peers waded back in. They watched the hedge-fund manager David Tepper, who keeps a brass cast of a pair of testicles on his desk, make seven billion dollars by betting early on the recovery of the banks. No one wanted to miss it this time. At the end of March, there was a frenzy, in the debt markets, of “breathless buying,” as the trader put it. Optimism ran through them like a fever. Last week, the Dow and the S. & P. surged. “They have the playbook,” the hopeful ones said, of the central banks, which were rolling out every play they’d run in 2008.
I asked Mohamed El-Erian, the longtime co-chief investment officer at pimco, the world’s biggest bond fund (he now advises Allianz, pimco’s parent company), about the confidence of the Fokkers and the would-be Teppers. “It’s idiotic,” he said. “Well, I shouldn’t use that word. This notion of a V, of a quick bounce back to where we were before—people don’t understand the dynamics of paralysis.”
He said, “This is much bigger than 2008. 2008 was a massive heart attack that happened suddenly to the financial markets. You could identify the problem and apply emergency remedies and revive the patient quickly. This is not just a financial stop. This is infection all over the body, damage to virtually every limb and organ. The body was already so fragile. Those of us who have had the privilege of studying failed states have seen this before, but never in a big country like the United States, let alone a global economy.”
He went on, “In the financial crisis, we won the war but lost the peace.” Instead of investing in infrastructure, education, and job retraining, we emphasized, via a central-bank policy of quantitative easing (what some people call printing money), the value of risk assets, like stocks. “We collectively fell in love with finance,” he said. Apparently, we’re still in love.
Last Thursday, amid news that another 6.6 million Americans had lost their jobs, the Fed announced the infusion of an additional $2.3 trillion, including hundreds of billions to purchase corporate debt, ranging from investment-grade to junk: big dirt. Stocks surged anew. The Fed was propping up risk assets again, at a scale that dwarfed the interventions of 2008, and the bankers were back, hats in hand. They get paid like geniuses, and yet, every ten years, they need bailing out.
A popular meme dusted off in recent weeks is an illustration of a few dinosaurs looking up at an asteroid blazing toward Earth, with a T. rex saying, “Oh shit! The economy!!” Silly dinosaurs. It can certainly seem ghoulish to worry about capital when people are dying in droves, but this isn’t an extinction event. At a certain point, the pandemic will recede and leave behind a severe economic crisis, affecting everyone in ways and degrees that are impossible to predict. The financial markets are a bellwether, at least. Deflation or inflation? Rising rates? Negative rates? Three months? Six? Two years? Schools? Museums? Airplanes? Concerts? Nobody knows anything. The only thing we can say with certainty is that the pain will be unfairly distributed. People are betting on it.
Washington Gov. Jay Inslee on Tuesday signed three emergency proclamations.
by James Drew (4-15-20)
In a sign of the sweeping power he’s wielding during the new coronavirus outbreak, Gov. Jay Inslee on Tuesday signed an emergency proclamation that suspends statutes of limitations for all crimes.
The proclamation also waives the one-year limit on raising post-conviction challenges in criminal convictions.
The goal is to give prosecutors more time to file criminal charges, and preserve the right of those convicted of crimes to challenge those convictions in court, the governor’s office said.
Inslee also signed a proclamation to help commercial truck drivers keep supplies flowing to stores.
The proclamation waives certain state laws for renewing or extending commercial driver licenses and commercial learner permits. It’s consistent with federal statutes that the Federal Motor Carrier Safety Administration has waived, the governor’s office said.
Also, Inslee signed a proclamation to protect consumer assets, including federal stimulus checks, from consumer debt collections.
The order suspends state laws that permit collection of consumer debt judgments, including bank account and wage garnishments, and waives accrual of post-judgment interest on consumer debt judgments.
The three proclamations are in effect through May 14.
Joseph Albert “Trey” Hollingsworth III, 36 (born September 12, 1983) is an American businessman and politician who is the U.S. Representative for Indiana’s 9th congressional district, serving since 2017. He is a member of the Republican Party.
by Dennis Romero (4-14-20)
Reopening the economy is preferable to preventing a new wave of coronavirus deaths, a member of Congress from Indiana said Tuesday.
“It is policymakers’ decision to put on our big boy and big girl pants and say it is the lesser of these two evils,” Republican Rep. Trey Hollingsworth told radio station WIBC-FM of Indianapolis. “It is not zero evil, but it is the lesser of these two evils, and we intend to move forward that direction.”
His push for the end of isolation for much of the country aligns with President Donald Trump’s desire to get the nation back to work. But medical experts, including Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, have said ending stay-at-home orders too soon could spark a new wave of COVID-19, the disease associated with the coronavirus.
President Donald Trump is greeted by Rep. Trey Hollingsworth, R-Ind., left, and Rep. Jim Banks, R-Ind., as he arrives at Indianapolis International Airport on Oct. 27, 2018Fauci suggested Tuesday that the nation’s lack of robust testing means that hot spots could crop up off the radar and that the virus could quickly mushroom without containment. “I’ll guarantee you, once you start pulling back there will be infections,” he said.
Hollingsworth’s sentiment has been expressed before. Texas Lt. Gov. Dan Patrick suggested last month that American seniors should be willing to risk their lives to the virus to preserve the economy.
“No one reached out to me and said, ‘As a senior citizen, are you willing to take a chance on your survival in exchange for keeping the America that all America loves for its children and grandchildren?'” he said March 23 on Fox News. “And if that is the exchange, I’m all in.”
Patrick’s remarks drew rebukes from Democrats, including New York Gov. Andrew Cuomo, who said the next day, “My mother is not expendable.”
Hollingsworth said Tuesday that he’s also willing to push the good life over a longer life.
“We are going to have to look Americans in the eye and say, ‘We are making the best decisions for the most Americans possible,’ and the answer to that is to get Americans back to work, to get Americans back to their businesses,” he said.
Hollingsworth argued that looming economic losses are far too severe to continue with sheltering-in-place orders designed to limit the person-to-person spread of coronavirus.
“It is always the American government’s position to say, in the choice between the loss of our way of life as Americans and the loss of life, of American lives, we have to always choose the latter,” he said.
by Renu Mahtani
One of the well explored effects of vitamin D is the regulation of the immune system. Vitamin D deficiency is now a global pandemic. It’s deficiency could heighten the risk of getting infected with coronavirus. Know the doses needed to be taken to protect yourself immediately, supported with a scientific basis.
Emergency Declared In Japanese Prefecture Hit By 2nd Wave Of Coronavirus Infections
Passersby wearing protective masks walk on a snow-covered street in Sapporo, Hokkaido, Japan, in late February during the first wave of the novel coronavirus. Now, officials have declared a new state of emergency as cases in Hokkaido spike.
by Scott Neuman (4-13-20)
Japan’s Hokkaido prefecture, which accounted for the country’s highest number of coronavirus infections as the pandemic initially swept through Asia, has seen a sudden uptick in cases, causing government officials there to declare a state of emergency less than a month after lifting a similar order.
The governor of Hokkaido, the country’s northernmost main island and the largest prefecture by size, made the announcement Sunday following nearly a week of double-digit increases in cases in the prefecture, according to Kyodo news service.
“We are facing a crisis of a second wave in the spread of (the coronavirus) infections,” Gov. Naomichi Suzuki told reporters in the capital, Sapporo.
The declaration, which falls under a law revised just last month in response to the pandemic, allows governors to issue stay-at-home directives to contain the spread of the virus.
Hokkaido declared a three-week state of emergency in February that was lifted on March 19. The prefecture had begun to reopen schools and was even allowing carefully orchestrated public gatherings.
But the latest order reverses all that, asking residents once again to refrain from nonessential trips outside their homes and closing prefectural primary and secondary schools until May 6.
The directive comes amid a resurgence in virus cases throughout the country that prompted Prime Minister Shinzo Abe last week to issue a state of emergency for several other prefectures, in and around the capital, Tokyo, and Osaka.
Officials reported 166 new cases in Tokyo on Sunday, bringing the total there to more than 2,000.
