Hey friends! Welcome back. I’m glad you’re here, even if you still think the seriousness of COVID-19 is a media hoax.
News Rundown
Testing those who may have COVID-19 (coronavirus) is crucial in order to slow it down (or flatten the curve) and save lives. The quicker we know who has it, the quicker they can be isolated. The worst case scenario is an unmanageable amount of people being infected at the same time (steep curve) and hospital resources becoming overwhelmed. In that case, people would die that would have otherwise recovered.
Unfortunately, the greatest country on Earth—the United States of America in my humble opinion—has failed on this front. For comparison, South Korea has tested 3,962 per million people while the US has tested less than 50 per million.
What went wrong?
The primary failures are with the Food and Drug Administration (FDA). First, many of the test kits they initially rolled out on Feb. 4 were duds. (The first US coronavirus case appeared on Jan. 20.) Secondly, labs and private companies were not permitted by the FDA to begin developing tests on their own until Feb. 29.
Another problem has been the lack of access to samples of the virus which labs need to create the tests. In particular, the Chinese government does not allow samples to be exported. Lastly, in the midst of it all, the Trump administration was preoccupied with downplaying the threat and waited seven weeks after the first US case was announced before declaring a national emergency.
The House passed a coronavirus relief bill early Saturday that provides the following:
14 paid sick days for employees
three months of paid emergency leave throughout the coronavirus crisis (expires in one year)
food support for seniors and school children whose schools are closed
payroll tax credits to reimburse business for some of the costs associated with the bill (smaller business are exempt from the bill’s requirements)
free coronavirus testing for everyone
The Senate is expected to vote on the bill next week. It already has the support of the president:
On Thursday, the Federal Reserve announced that they would inject $1.5 trillion (plus billions more through the rest of this month) into the financial markets. The important thing to understand is that these are short-term loans. It’s not a bailout. It’s not free money. It is a maneuver by the Fed to stabilize the currently volatile stock market which is experiencing disruptions due to the coronavirus.
Typically, firms trade cash back and forth all day everyday to meet their short-term funding needs. They have a system known as the “repo” market (sounds bad, but “repo” refers to repurchase agreements, not repossession) where one firm buys securities from another so that the seller can have more cash on hand; it’s called a repurchase agreement because the original seller agrees to buy back the securities on a certain date at low interest. Wall Street doesn’t function properly without a healthy repo market.
The repo market can get clogged when the value of the securities that backup the repurchase agreements are in question, as they are now because of market volatility. In such a case, the market can suffer drastically (like in the lead up to the ‘08 financial crisis) and interest rates rise. The Fed doesn’t want that to happen because it’s their job to stop such things.
When the announcement was made that the Fed would offer up all this cash to assist the repo market, America’s favorite democratic socialists spoke out:
In these tweets, Bernie and AOC are giving the impression that the Fed just handed out $1.5 trillion to banks. Again, they were loans, short-term and very secure at that. Besides, the Fed isn’t Congress so their anger is misdirected. As for Congress, they have, of course, already provided for low-interest loans to students, sort of like how the Fed loaned money to the banks this week. One difference is that the Fed has a lot better odds of getting paid back.
There may be sound arguments for that which Bernie and AOC are advocating, but here they’re being illogical.
Presented Without Comment
Loose Screws: 2 for 1 Crazy Old White Men Edition
The worker may have misrepresented Biden’s views, but the former VP’s response was inappropriate (in my humble opinion). Regardless of which one of these two (Trump or Biden) wins in November, can we please do better in 2024? (Yes, I know Bernie hasn’t officially lost yet.)
America’s Finest
Not America’s Finest: #coronakatie
Until Next Time
Why South Korea's System Is Outperforming Italy's with the Coronavirus
Does Anyone Really Know What Socialism Is? (podcast)
Coronavirus will save lives in China.
Why Is the Democratic Party Even Having Another Debate? (Tonight at 8 ET on CNN)
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