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Today’s Agenda
- Trump doesn’t have total authority over states, which are going their own way
- … for better or worse.
- Quarantine’s a mixed bag even for companies selling media or alcohol.
- Don’t kill the Postal Service.
States’ Rights and Wrongs
Some day in, say, 2023, when California is an independent nation and New Yorkers are citizens of the Free Republic of Cuomostan, we might look back at this pandemic as the moment when the whole “United States” thing went kablooey.
OK, probably not. But this is certainly a time to consider the tensile strength of the national fabric, with 50 different states mostly just doing their own thing on the pandemic. President Donald Trump insists he has “total” authority over all, despite contrary evidence and his own refusal to coordinate action so far. Oh, and the Constitution. Sure, predecessors such as FDR have taken the reins of national functions during crises, but only in concert with Congress, the judicial system and others to lay the groundwork and check that power, writes Jonathan Bernstein. That’s how the system was designed, because the founders had this weird thing about total authority being vested in one person.
The kind of team-building skills and foresight needed to become the next FDR aren’t in this particular president’s toolkit, notes Ramesh Ponnuru. In fact, he hasn’t even managed to do replacement-level presidenting with the powers he does have: He doesn’t effectively run the bureaucracy, cut deals, push legislation or influence people. He’s got complaining on Twitter on lock, of course, but even Republicans generally ignore him.
Meanwhile, absent strong federal leadership, states are giving new meaning to the phrase “laboratories of democracy,” writes Noah Smith. Governors are planning their own pandemic reopenings, some wisely and others not so much. Some, including California’s Gavin Newsom, New York’s Andrew Cuomo, Ohio’s Mike DeWine and Washington’s Jay Inslee, have handled the crisis better than Trump and their less-aggressive counterparts. Now they can test escape routes from this nightmare.
A coordinated federal pandemic plan would be preferable, so coronavirus-skeptical governors don’t put their citizens and neighbors at risk, writes Max Nisen. In the meantime, we seem to be entering a new phase of federalism, one in which states increasingly go their own ways and butt heads, writes Tyler Cowen. It may not lead to the Free Republic of Cuomostan, but it could be a throwback to the pre-constitutional days of the Articles of Confederation.
Further Economic-Reopening Reading:
- Basing reopening plans on virus data is dicey because the current tallies are so badly flawed. — Cathy O’Neil
- But we’ll have to reopen even without adequate data because people just won’t do this for 18 months. — Michael R. Strain
Things Are Tough All Over: Corporate Edition
You’d think this would be a boom time for companies catering to a nation desperately craving distraction. But they’ve got problems, too. The media industry, for example, needs a steady flow of new content, which has dried up in the pandemic, along with amusement-park attendance and other lucrative business lines, writes Tara Lachapelle. Meanwhile, with unemployment possibly at 20%, people aren’t exactly rushing to pay for new streaming services, much less existing cable bills.
Roku Inc., which makes little boxes that funnel content to people, relies on ad revenue that is being slashed in the crisis, writes Tae Kim.
We may be drinking more at home to kill the time and the pain, but we’re drinking cheaper beer than when we go out with friends, notes Andrea Felsted. This is a problem for such brewers as Anheuser-Busch InBev.
Even the roaring success of Netflix Inc. is not a great sign for the future, writes John Authers: It makes sense if we’re all going to be inside for months to come, but in that case maybe the stock market shouldn’t be quite so exuberant.
And growing labor unrest at quarantine overlord Amazon.com Inc. is a hint the economic recovery could be profitless, as companies have to maintain a higher-paid staff but accept lower revenue, writes Conor Sen.
Further Corporate Problem Reading: Companies aren’t being smart about layoffs. — Roy Bahat in conversation with Erik Brynjolfsson and Andrew McAfee
Free the Post Office
The U.S. Postal Service is something of a miracle. For just 55 cents, you can send a letter anywhere in the country in a reasonably short time, and mailing packages isn’t all that much more expensive. The service is critical for rural communities — especially now, when quarantined people need mail carriers to deliver prescription drugs and other necessities. Conservatives have spent decades tying its hands in Congress and trying to destroy it, and the pandemic may finally help them realize their dream. The service will go under in a matter of months without a government bailout Trump has refused to extend. There’s a better way, writes Tim O’Brien: Instead of killing the Postal Service, we should reinvent it and give it control of its own finances. It still has much more work to do.
Telltale Charts
It’s Zoom’s world now, writes Ben Schott. Skype and Google Hangouts just live in it.
JPMorgan Chase & Co. recorded an eye-watering loan-loss provision in the latest quarter, but also showed signs it can withstand even a prolonged and deep downturn, writes Brian Chappatta.
Further Reading
Putin had no choice but to join the OPEC+ deal; sticking to it won’t be easy or cost-free. — Clara Ferreira Marques
There’s really no good reason for the Fed to buy junk-bond ETFs. — Brian Chappatta
Europe needs more than just a shared pool of money; it needs shared health resources. — Lionel Laurent
This is the IMF’s chance to become the world’s lender of last resort. — Clive Crook
The IMF expects the worst global recession since the Depression; Bloomberg Opinion columnists are split on whether it’s too pessimistic or too optimistic. — Mohamed El-Erian, Bill Dudley, Narayana Kocherlakota, John Authers, Tim Duy, Conor Sen, Noah Smith
ICYMI
Hedge-fund managers are claiming small-business bailouts.
Who knew? Americans are great at social distancing.
Bad Bunny is the world’s biggest pop star.
Kickers
Declassified CIA documents apparently discuss Soviet paranormal experiments.
For $100, you can have a goat bomb your next Zoom meeting. (h/t Scott Kominers for the first two kickers)
William Gibson didn’t expect the Internet to turn out like this.
At 20, “American Psycho” is timelier than ever.
Note: Please send goats and complaints to Mark Gongloff at mgongloff1@bloomberg.net.
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This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
Mark Gongloff is an editor with Bloomberg Opinion. He previously was a managing editor of Fortune.com, ran the Huffington Post's business and technology coverage, and was a columnist, reporter and editor for the Wall Street Journal.
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