Why 55 million people need a bailout
Why 55 million people need a bailout
Introducing new national emergencies
Welcome to a Thursday evening edition of Progress Report.
Have you heard the big news? It turns out that media golden boy Ron DeSantis is actually a cold and unnerving grouch who hates human interaction and eats pudding with his fingers. Can you believe it?!
Well, of course you can, because his political agenda is incompatible with even the thinnest sliver of human empathy (also, we told all of Tallahassee that he’s a dork last year). Of course, the policies are hardly of interest to the political media, which is why we work so hard to expose DeSantis’s everyday fascism both here at Progress Report and over at SWORD.
In fact, SWORD has a moving new story on the monstrous new immigration policy that DeSantis is now pushing through the Florida legislature. There’s an excerpt a bit further down in tonight’s newsletter to entice you.
But before you get reading, do me a favor and watch my new piece on the abuses endured by workers while building Elon Musk’s shiny new gigafactory in Texas.
It’s crucial to note that this isn’t just an Elon problem, but instead a systemic issue that has been robbing school districts and lining the pockets of billionaires for more than two decades. There are policy battles happening right now in the Texas legislature that will determine the future of corporate handouts and workers’ rights in the state for the next decade.
Now that you’ve watched the video (thank you!), let’s get to the meat of tonight’s issue: the upcoming spike in poverty, bank bailouts, and the quiet biases that shape our national priorities.
For a brief moment there, it looked as if the Biden administration would hold its nerve and refuse to bail out Silicon Valley Bank and its large depositors. The signals coming from Washington really seemed to suggest that the bank, which successfully lobbied only a few years ago to be freed from even minimal oversight, would have to suffer the consequences of its bravado, idiotic decisions, and partnerships with literal bloodthirsty billionaires like Peter Thiel.
In hindsight, it’s almost cute that people began to believe that this uniquely unsympathetic bank, which served the most useless and wasteful corner of the economy, would have to clean up its own mess. Then came the sob stories from McKinsey consultants, the possibility that well-paid tech employees might have a paycheck slightly delayed, the refusal of billionaire venture capitalists to take responsibility for their actions. There is no federal regulation of shamelessness, nor a stress test to assess self-awareness, so the noise became relentless.
Humiliating public demands from hysterical venture capitalists — there are no libertarians in a foxhole — and hard nudges from bank-friendly lawmakers pushed the White House toward action, as did increasingly urgent coverage from a crisis-hungry media. By Sunday afternoon, a regional bank’s liquidity trouble had been successfully spun into a national emergency. A federal bailout of Silicon Valley Bank was suddenly the only way to avoid economic meltdown (even though it wasn’t).
The brief SVB roller coaster ride underscores the influence of concentrated media coverage and the power that the federal government has to swoop in and prevent imminent calamities. It also presents a vexing question: Why does a run on an over-leveraged mid-sized regional bank qualify as a national emergency with dire consequences for the entire economy, while the unraveling of the social safety net barely merits a mention in the media?
On April 1st, the federal government will lift the state of emergency under which the nation has been operating since the early days of the Covid pandemic. While the bureaucratic transition will go unnoticed for many people, it will be yet another blow for millions of Americans that rely on the nation’s perilously thin welfare state.
Medicaid added 20 million enrollees during the pandemic, a function of both mass unemployment and the continuous coverage clause that stopped states from removing low-income beneficiaries from their programs in exchange for additional funding. The expiration of the national emergency ends those protections, which will allow states to start the process of redetermining eligibility and ultimately taking health insurance away from millions of working people.
There’s been precious little coverage of the Medicaid cliff thus far, leaving many beneficiaries unaware that their coverage could come to an end. There is no one unified national effort to re-enroll eligible beneficiaries or help the newly ineligible find new low-cost insurance; instead, every state has its own plan, with some planning to be far more aggressive in stripping people of their health coverage.
AHIP, the trade group for insurance companies, estimates that more than three million Americans will lose their coverage and not be able to enroll in a plan on an ACA exchange. That dismal number is actually an optimistic projection that assumes success in funneling millions of people into their insurance plans, as 15-18 million people are likely to be booted from Medicaid.
Already this month, the government was forced to cut off the expanded SNAP benefits that have been in place since early in the pandemic, taking away at least $95 in additional food stamps per month from 30 million low-income people in 32 states. As a result, the program will provide about $6.10 to cover three meals per day, which could leave many of the 41 million people that rely on the assistance hungry and malnourished.
The program kept 4.2 million people out of poverty in the fourth quarter of 2021, when many Americans were experiencing a rare financial surplus courtesy of the American Rescue Plan. Between inflation, housing costs, and rising credit card debt, it’s not hard to imagine millions of Americans being plunged into poverty by the reduction in food benefits.
While I’m not an economist by trade, my back of the envelope math suggest that mass hunger and millions of people being stripped of health care coverage will not be a boon for the economy. So why doesn’t it get covered that way?
Poverty in the United States carries the implication of personal failure, no matter how obviously irrational and unfair it is to blame deep systemic inequalities on any one individual. Americans tend to hide their financial problems, leaving the homeless, itinerant, and seemingly hopeless to stand in for the 38 million Americans who live beneath the poverty line and many more who skate just above it.
Journalists, especially ones that cover politics and finance at the highest level, are far more likely to know and socialize with people who work at banks, tech start-ups, and in other lucrative fields. There is prestige in covering institutions like the Federal Reserve, and many journalists tend to align themselves with people in power, which is often far more flattering but very rarely a reflection of reality. Wealth indicates success, which suggests intelligence, importance, and moral authority.
Grinding poverty has become a fact of life, something that happens to other people, and a permanent feature of our economic system. Most reporters have never been on Medicaid, received SNAP benefits, or slept in a public park with all their possessions scattered around them, so it’s all theoretical. And anyway, suffering is far less compelling than billionaires battling it out to shape the market like careless gods.
Here at Progress Report, we’re going to start treating events like the Medicaid cliff and SNAP expiration like the national emergencies that they are. When the federal government wants to find solutions, we know that it can be done. They just need to feel the urgency.
Excerpt:
Florida Wants to Make Family a Felony
by Thomas Kennedy
Despite having the third-highest immigrant population in the country, Florida has long limited the rights of undocumented immigrants. For years, the state has diminished the existence of the people that power its economy and shape its unique culture, robbing them of the freedoms that everyone else takes for granted as part of day-to-day life.
In a state so dependent on cars, the refusal to issue driver's licenses to undocumented immigrants is one of Florida’s crueler prohibitions. I grew up in Miami without papers, which left me relegated to walking or riding my bike to work and school for most of my youth, even in the sweltering South Florida heat.
Fortunately, many of my friends with cars were generous enough to give me a ride from time to time. They all knew that I was undocumented; I wouldn’t have needed a ride otherwise, but it was otherwise irrelevant. I didn’t have a license to drive, but it wasn’t as if I was banned from cars altogether. It was a far better option than driving without a license, which could have gotten me deported given how frequently police officers target certain drivers here. When they drove, we were all safe.
That all might change soon.
In late February, Ron DeSantis unveiled a series of extreme anti-immigrant proposals for the upcoming state legislative session. The wretched list of proposals includes one that would make it a third-degree felony to even drive with an undocumented person in the passenger seat. The same penalty would be levied against anyone who “conceals, harbors or shields” an undocumented immigrant from state or federal authorities.
Read more at SWORD:
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Thanks for the Texas callout. Because Abbott is not obviously running for president, the GOP is able to advance much of the same agenda as Florida, without the same national attention. School vouchers and the takeover of Houston ISD, anti-trans and DEI bills, further attacks on abortion and the right for cities to govern themselves are just the big ones. My pal’s citizen journalism on the environmental rules Boring Company/Tesla is flouting finally got some national attention now that people like hate-reading Elon Musk. Would appreciate more coverage of all the small things that are chipping away at Texan freedom.