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Unsanitized: Lightning Round – The American Prospect

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It’s one of those mile marker weekends, the unofficial beginning of summer, and a time to take stock. Let’s look at a few matters that we’ve been obsessing about on Unsanitized:

The Aggregate Problem. Charts and analyses of the pandemic treat America as one country with one outbreak, when Donald Trump will tell you it’s “up to the governors.” We have 50 outbreaks (and D.C.) necessitating the same number of charts. You wouldn’t look at an aggregate of Europe to determine where the entire continent was with the virus; you would break it out.

Imperial College has put out a state-level tracking report that shows the significant differences in the trajectory of the outbreaks. It’s extensive and aggressively technical, but the important takeaway is that 24 states have “uncontrolled” outbreaks at the moment. That means that the infection rate, typically identified as R0 (R-nought), is above 1 in those states, meaning every infected person is on average infecting 1 person or more. At under 1, you can suppress the virus; above 1, you have some work to do. The uncontrolled states are clustered in the midwest and the south. In general, the northeast corridor has been through its parabolic arc, the west on a modified version of it, and everywhere else the fate is unknown.

This in almost no way reflects the manner in which states are reopening. Texas is at the top of the uncontrolled list and it’s about as far along as any state in opening for business. And even the state might be too large a measurement, with wide variances by city and county. You cannot say much that’s useful off of an aggregated chart of U.S. cases and deaths. This is a localized, national problem.

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Amazon’s Road Back. As I suspected, Amazon’s stumbles in the crisis and rivals stepping up their e-commerce and delivery games did make an impact on the bottom line. This is largely a press release masquerading as a New York Times story about Amazon’s bid to “recapture customers” but it has an important stat: Amazon was previously 42 percent of all e-commerce, and by mid-April that was down to 34 percent. Amazon has lost the faith of a critical number of customers. It’s possible that doesn’t come back.

The retailer is bringing back rapid shipping on many items and doing discounts and promotions, a classic tactic to regain market share. But Amazon doesn’t only have Target and Walmart and other giants to fear; their main competition now is the corner store in every city in America. To survive, that corner store had to figure out delivery or curbside pickup. They’re much closer to people’s homes than any Amazon warehouse. If convenience is key, the corner store is more convenient. And if we don’t completely obliterate the corner store—a policy choice that can be made in Washington—it just gained the skills to beat Amazon. And the corner store doesn’t have calls to break it up every five minutes.

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The Other Vaccine Problem. The coronavirus is a disruptive force, limiting the normal course of life. When that extends to health maintenance it can become deadly. The World Health Organization looked at vaccinations in 129 poorer countries and found that more than half have seen their clinics and associated initiatives limited by the spread of COVID-19. The developing world could easily see the resumption of polio or measles without immunization. And that includes developing countries like these United States, where vaccine coverage rates have dropped more than 50 percent in some of the most affected states. When we finally tally up the coronavirus, the associated health complications and deaths and disease won’t make the equation. But they should.

Hipster Antitrust Goes Corporate. Shills for monopolists have devised the hilarious term “hipster antitrust” to describe those who oppose the domination of the entire economy by a handful of companies. Well, the hipsters are in the corporate boardroom now, listening to vinyl. Yesterday a coalition called the Pacific Business Group on Health, includes Boeing, Walmart, and Salesforce, urged Congress to pass a one-year moratorium on healthcare mergers. The group believes, correctly, that small-group practices have been devastated by the slowdown in non-coronavirus healthcare activity (see above), and will be prime targets for acquisition by the giant hospital networks that dominate regions. Already 90 percent of the country has a “highly concentrated” health provider landscape.

Specifically, PBGH wants a one-year merger moratorium for any company that has received some of the $170 billion hospital bailout, which has disproportionately gone to larger firms. Larger employers, particularly those that self-insure, endure higher bills and fewer choices from a concentrated health sector. Hospital mergers have been a point of focus of the Federal Trade Commission, in that they don’t ignore them completely. These big employers could find some government sympathy. But of course, the argument of the dangers of consolidated markets shouldn’t end with health. The Boeings and Walmarts of the world just opened a conversation policymakers should be having about them.

Time for a Break. Congress skipped town and isn’t coming back for a week, despite the continued economic crisis. Unemployment is at a record high in practically every state in America, including a stunning 28 percent in Nevada. Small businesses are nearing the end of an eight-week cycle for forgivable loans without much comeback, if any, in their revenues. Enhanced unemployment has kept a lot of consumer bills paid but that’s about two months from going away. Freezes on mortgages and utility bills are becoming unfrozen. We all have Nouriel Roubini to contend with again, telling us (persuasively) that this will be a Greater Depression.

The lack of policymaker urgency is predictable but still stunning. The political system is so desperate to return to normal that they’re debating whether people earning under $400,000 a year should see higher taxes. At least 1 in 5 Americans at this point are earning $0 a year, and what’s currently in the pipeline to save them from total despair isn’t enough. On the flip side, we have this desperate need for contact tracers and outbreak monitors and no coordinated plan to find the manpower. Some Democrats dropped a bill this week to match the massive job pool with this massive need to protect the country, about as much as a no-brainer as you can get. But Congress went home. As long as their portfolios remain strong, the rest of the country had better figure out the nutritional value of dirt.

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And now…

Today I Learned

  • Programming note: we will have truncated versions of Unsanitized (no Today I Learned) throughout the holiday weekend.
  • Good interview with Bharat Ramamurti on the bailouts. I’ll have much more on this next week. (The New Yorker)
  • Hertz files for bankruptcy, and it also runs Thrifty and Dollar. Not a lot of rental car activity right now. (CNBC)
  • Insider stock sales at Moderna, just before their claims of vaccine advancement were negatively scrutinized. (CNN)
  • Some actual fraud in the PPP loan program, from a Hollywood producer paying his credit cards off with the cash. (Los Angeles Times)
  • More have died from COVID-19 in New Orleans, and more made unemployed, than during Hurricane Katrina. (Wall Street Journal)

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