Also, the Fed throws the oil industry a lifeline. This is The COVID-19 Daily Report for May 1, 2020.
It’s the first of the month again, and for the second month since the coronavirus crisis started, renters and mortgage borrowers have big bills due, with no direct relief for these payments. The unemployed have had serious trouble getting aid—Department of Labor data shows that just 14 percent of workers who filed claims actually got paid in March—the one-time CARES Act payments are underweight, untimely and subject to private debt collection, and the jobless rate keeps rising and rising. Yet financial time marches on, and the rent’s due. The National Multifamily Housing Council reports that 31 percent of renters didn’t pay in April. That number’s going to be bigger today.
There was going to be a reaction to this one way or the other. It has burst forward in a series of May Day rent strikes. As my colleague Harold Meyerson points out, rent strikes are usually hyper-local affairs, usually emanating from one building or group of building protesting one landlord. And I’ve seen some of that, particularly in Elmhurst, Queens. But this is “what may likely be the first nationwide rent strike in our history.” And it’s being driven by mainline-ish progressive groups, not the Communist Party.
The Center for Popular Democracy, the Action Center on Race and the Economy (ACRE), and many others are coordinating events today. Even a member of Congress, Democratic socialist Rashida Tlaib, endorsed the actions. “When elected officials say we need to get back to normal, we must remember that realities like this are not normal,” Tlaib said in a statement. “We need to invest directly in people.”
Read all of our Unsanitized reports
Event plans include banner drops, motor marches (where people stay in their cars and parade through downtowns), and a “cacerolazo,” a protest popular outside the United States that involves the banging of pots and pans (cacerolazo is Spanish for “casserole.”) By one count, over 200,000 households have affirmatively joined the rent strike, though the number of people not paying rent will undoubtedly be much higher. “I’m not paying May rent—not because I don’t want to, but because I can’t,” said Winsome Pendegrass, a tenant involved with the progressive New York Communities for Change.
Strike hubs include California and Washington, D.C. The demands are rent and mortgage cancellation and a moratorium on evictions and foreclosures for the duration of the crisis. There are some federal protections against eviction, but they are being violated in the states.
Rent and mortgage strikes aren’t the only things happening on May Day. Amazon, Whole Foods, and Instacart workers (along with workers at some other big firms) are striking today, as close to a general strike as we’ve seen in decades. We have a piece at the Prospect website today about how tech workers at Amazon are showing solidarity with their blue-collar bretheren; two were even fired for speaking out. They are protesting working conditions that have made so-called “essential workers” vectors for the spread of the pandemic. Many are calling out sick or walking out during lunch. This raised consciousness is spreading. Meat processing workers are saying that they won’t go back to their plants if compelled by President Trump’s executive order (which doesn’t exactly compel the plants to re-open).
This is a new militancy in U.S. politics. It has some roots in the wildcat teacher strikes that began in West Virginia in 2018. But there’s increased urgency and precarity right now, and a lack of responsiveness from Washington. Unions were born out of such despair in the Gilded Age, and rose to their peak after the New Deal. The rumblings in workplaces and apartment complexes have the ability to change our politics rapidly, to constrain lawmaker action, to force changes.
I know we’re conditioned to believe that only set of interests in America can have a voice. When you see things like Amazon play-acting a feud with Donald Trump but working with his administration behind the scenes to relieve pressure for safer workplaces, you could certainly agree with that assessment. But it’s not necessarily true in times of crisis. People power is not just a slogan. Today, people are on the streets working to make it real.
Odds and Sods
Here’s an update to yesterday’s Unsanitized, which talked about workers at a Tyson meatpacking plant in Dakota City, Nebraska. Sources indicate that 669 workers at the plant tested positive for COVID-19. The company was making them work while they awaited test results.
At the Prospect today: A longread May Day feature from Aaron Freedman on digital media unions and their necessity during the pandemic; Bryce Covert on Amazon white-collar tech workers showing solidarity with protesting blue-collar warehouse workers; and our interns Malcolm Ferguson and Thomas Recchio on different aspects of higher education from home.
All of our coronavirus coverage is at prospect.org/coronavirus.
On Thursday the Federal Reserve announced changes to their “Main Street Lending Program,” which helps the kind of Main Street that has companies with up to 10,000 workers on it. One of the only people who appears to care about this bailout stuff, Congressional Oversight Commission member Bharat Ramamurti, points out that this is a stealth oil industry bailout.
The industry had been lobbying the Fed to make these changes. This letter from the Independent Petroleum Association of America calls for allowing borrowers to use the proceeds from any Main Street Lending Program support to repay other loans before paying back the Fed. The oil industry is overleveraged to the hilt; producers have high-yield debt that was fated to crash. But the Fed listened, and now allows refinancing on existing debt.
Next, the Fed raised the maximum loan size to $200 million. Bharat finds that Energy Secretary Dan Brouilette (could anyone reading this have named the Energy Secretary prior to me naming it? I couldn’t have!) asked to raise the loan limit to $200 million on April 17, to help “mid-tier U.S. energy companies.” Brouliette “met with industry representatives on the issue.”
Here’s Sen. Ted Cruz (R-TX) last Friday, also asking for the Fed to let oil companies into the Main Street Lending Program by allowing them to refinance existing debt with the proceeds. He also wanted the Fed to give eligibility to more indebted companies. By this Friday, Cruz got his wish. Cruz wanted the Fed to create a new bailout facility for the industry, but the Fed is smarter than that: they hid the new terms in an old facility as mere tweaks. Amazingly, there are still no conditions on worker retention or re-hiring in this program, when the whole point was to use fiscal support to get people back to work.
The Fed’s programs have been many times more impactful than the small business program everyone loves to hate. Without spending a dime, the Fed’s announcements have revived high-yield bond markets. Boeing raised $25 billion in debt yesterday, something that would have been impossible without the Fed propping up the market. They’ll no longer “access” the Fed windows, because they already did indirectly. This has already happened with other large companies.
If I didn’t know any better, I’d say someone told Ruth’s Chris and AutoNation and the Lakers to build controversy by taking PPP loans, to keep everyone distracted from the Fed’s machinations. The real bailout lives there.
More on this from Matt Stoller.
Today I Learned
- We are definitely ready to re-open the country when the Senate can’t even procure 100 tests to check all Senators for COVID-19 before they return to work. (Politico)
- Our understanding of the coronavirus keeps changing. (New Yorker)
- In Louisiana, lawmakers voted to restrict vote by mail. They did it by mail. (Baton Rouge Advocate)
- Pelosi looking for $1 trillion for state and local governments. She maybe should have thought about that before agreeing to the corporate bailout. (HuffPost)
- Even discussing ripping sovereign immunity away from China is a dangerous scenario. (Washington Post)
- A screwed-up formula for relief for airports has the smallest airports getting the most money per traveler. (Politico)
- The social distancing of Wes Anderson. (Boing Boing)