monday, april 6 , 2020. the washington post eZ re a
O
ur country can avoid long-term
economic catastrophe, but only
if we accept what would normal-
ly seem a preposterous idea: The
$2.2 trillion in relief that Congress has
approved is not nearly enough.
The dangers of doing too little far
outweigh those of doing too much. A
sluggish recovery could cause lingering
human suffering that would impede the
life chances of many Americans for
decades. And if the economy recovers
more rapidly than now seems likely, the
emergency programs could be ended
quickly.
In t he short term, the aid Congress has
already authorized must be pushed out
with far greater urgency. As of now, it
could take up to five months for some
Americans to get their one-time relief
checks. Independent contractors and the
self-employed faced delays in applying
for help under the program for small
businesses. For the rest, rules were issued
only at the last minute, and some bor-
rowers fear banks are favoring existing
customers.
Yes, a certain amount of confusion
might be forgiven for a novel effort. But
the Trump administration’s bungling of
so many aspects of the pandemic tells us
to be deeply wary. And the difficulties
states face in handling the unprecedent-
ed number of applications for unemploy-
ment insurance need to be addressed
now.
But strange as it may seem, the relief
bill itself was excessively optimistic in its
assumptions about where the economy is
headed. Some 10 million Americans ap-
plied for unemployment benefits in
March. The month’s drop of 701,000 in
non-farm payrolls was close to the peak
monthly losses during the Great
R ecession.
State and local officials see budgetary
mayhem on the horizon, and the federal
assistance coming their way in the rescue
plan is inadequate. Thus the urgency of a
new economic rescue package that in-
cludes far more help for lower levels of
government. “If states do massive layoffs
or budget cuts,” said Robert Greenstein,
president of the Center on Budget and
Policy Priorities, “you’re just going to
prolong and deepen the recession.”
Rhode Island Gov. Gina Raimondo
feuded with New York Gov. Andrew
Cuomo over her, shall we say, controver-
sial efforts to quarantine New Yorkers
coming into her state. But she and
Cuomo, who has called for more federal
aid, are at one on budget matters.
While Raimondo’s immediate concern
is for the plight of her state’s hospitals
and small businesses, she pointed to the
double fiscal effect of the pandemic.
“The costs are going through the roof,
at a time when our revenues are falling
off a cliff,” she told me. “Unemployment
insurance claims are skyrocketing,
health costs are skyrocketing, and we
have had to invent a lot of new social
services” to deal with the coronavirus
fallout.
Kansas Gov. Laura Kelly, like Raimon-
do a moderate Democrat, said transpor-
tation programs have often been first to
be cut in her state in budget c rises, which
is counterproductive to growth. Govern-
ments, Kelly said in an interview, “ should
make sure that we’re a job creator, not a
job killer.” New D eal-style jobs programs,
she added, may suddenly be appropriate
again.
Also essential: Programs that were
time-limited in the rescue package, nota-
bly the big unemployment insurance
increases, should be beefed up, extended
beyond their current expiration dates
and put on automatic pilot. They can
switch off when economic indicators
turn positive. The one-time payments in
the original rescue should be delivered
quickly now and authorized again.
Improvements in recently enacted
family and medical leave rules could help
many who have been forced to stay h ome,
and a major increase in food stamp
payments is essential. Hunger is a real
threat, as my Post colleague Catherine
Rampell documented last week. And
food stamps help more than just hungry
people: Economist Mark Zandi showed
during the Great Recession that food
stamps are a highly effective economic
stimulus.
For many, lost jobs mean lost health
insurance. Republicans are allergic to the
words “universal coverage,” but no one
should stay away from a doctor during a
pandemic for fear of the cost. If ever
there were a time to expand Medicaid
and access to Obamacare, this is it.
House Speaker Nancy Pelosi told re-
porters last week that if “we do not
address the economic consequences” of
the crisis, “that light at the end of the
tunnel will... be the proverbial train
coming at us.” Yes, and she signaled
Friday that she was willing to put off
some of her more ambitious aspirations
if Senate Majority Leader Mitch McCon-
nell agreed on the need to build on the
existing rescue program. McConnell,
having earlier resisted a new bill, said he
was ready to do business.
Perhaps McConnell was pondering the
fate of a Republican president named
Herbert Hoover, who was engulfed by the
Great Depression.
McConnell can’t want a replay. Surely
the rest of us don’t.
Twitter: @EJDionnee.J. dionne Jr.Let’s avoid
another
Great
Depression
N
o doubt President Trump was
unaware of the significance of
the date he chose to salute “my
friend MBS.”
No doubt Trump had no idea that it
was the year-and-a-half-anniversary of
the murder of Jamal Khashoggi.
But, yes, Trump’s tweet came
18 months to the day after his “friend
MBS” — Saudi Crown Prince Moham-
med bin Salman — had a hit squad
murder Khashoggi inside the Saudi Con-
sulate in Istanbul. A hit squad that
included forensic doctor Salah Moham-
med Tubaigy, who brought his bone saw
with him from Riyadh.
You probably remember the outlines
of the story. A respected Saudi journalist
living in Virginia and writing columns
for The Post, Khashoggi had visited the
consulate the previous week seeking
paperwork so he could marry his Turk-
ish fiancee, Hatice Cengiz. He had been
told, no problem, come back the follow-
ing Tuesday — Oct. 2, 2018.
He returned around 1 p.m., asked
Cengiz to wait out front, told her he
would return shortly.
She waited — an hour, two, 10. After
midnight, he still had not reappeared.
By the next day, f riends and colleagues
were alarmed, though few u nderstood
the true depravity of the Saudi regime,
and Saudi lies postponed under -
standing.
“I assure you that the reports that
suggest that Jamal Khashoggi went
missing in the Consulate in Istanbul or
that the Kingdom’s authorities have de-
tained him or killed him are absolutely
false, and baseless,” Prince Khalid bin
Salman — the Saudi ambassador to the
United States and MBS’s little brother —
was still saying on Oct. 8.
But Turkish authorities knew what
had happened. They knew the bone-saw
doctor had expressed the hope, just
before Khashoggi entered the consulate,
that it would “be easy. Joints will be
separated. It is not a problem. The body
is heavy. First time I cut on the ground. If
we take plastic bags and cut it into
pieces, it will be finished. We will wrap
each of them.”
The bone-saw doctor was speaking to
Maher Abdulaziz Mutreb, a Saudi intelli-
gence officer who also had been dis-
patched from Riyadh. As Tubaigy fin-
ished his explanation, Mutreb asked
whether “the sacrificial animal” had
arrived.
U.S. intelligence officials concluded
that the murder could not have taken
place without the crown prince’s autho-
rization. An investigation by U.N. s pecial
rapporteur Agnes Callamard called the
murder and dismemberment “an extra-
judicial killing for which the State of the
Kingdom of Saudi Arabia is responsible.”
For a time, the Trump administration
pretended to seek information about the
killing. The truth would come out,
Trump said. Secretary of State Mike
Pompeo pressed the crown prince at
least to move aside his chief henchman,
Saud al-Qahtani.
But any pretense is long gone.
Qahtani remains influential. The admin-
istration has illegally ignored congres-
sional mandates to furnish information
on the killing and impose sanctions.
And now, as though to mark a year
and a half of Saudi nose-thumbing,
Trump is prostrating himself again. The
reason: As a pandemic imperils the
American economy, the Saudis have
threatened to devastate the U.S. oil in-
dustry further by flooding the market
with cheap oil.
“Just spoke to my friend MBS (Crown
Prince) of Saudi Arabia, who spoke with
President Putin of Russia, & I expect &
hope that they will be cutting back
approximately 10 Million Barrels, and
maybe substantially more which, if it
happens, will be GREAT for the oil & gas
industry!” Trump tweeted on Thursday.
This quickly turned out to be —
surprise, surprise — false, at least in its
details; the Kremlin denied that Putin
and Mohammed bin Salman had
s poken.
It may well prove false in the big
picture, too. There is no sign of an
agreement between Russia and Saudi
Arabia. The Wall Street Journal reported
Friday that those two countries wouldn’t
throttle back unless U.S. producers also
reduced output, which could, among
other complications, put them on the
wrong side of U.S. antitrust law.
All of which would fit the pattern of
Trump’s i nfatuation with the Saudi royal
family, which from the start has played
him for a fool. Trump made Saudi Arabia
his first overseas destination, and the
king threw a dazzling reception and
promised, Trump claimed, to buy hun-
dreds of billions of dollars worth of
U.S. weaponry.
In the years since, few of those sales
have materialized. Meanwhile, the ad-
ministration has sent thousands of
U.S. troops to help defend the kingdom,
even as Trump claims to be disentan-
gling from the Middle East. The United
States has signed on to or acquiesced in
every reckless MBS action — a feud with
neighboring Qatar, a disastrous war in
Yemen, his purges of princes, his torture
of activists. And his murder of Jamal
Khashoggi.
Khashoggi was 59 at the time of his
death. He will be forever 59. The rest of
us get older. But not all of us learn as we
do.
[email protected]Fred HiattMBS is not
your friend,
Mr. Trump
A
cting Navy secretary Thomas
Modly, in an extensive inter-
view about the firing of the
commander of a disease-
threatened aircraft carrier, said he
acted because he believed the captain
was “panicking” under pressure —
and wanted to make the move him-
self, before President Trump ordered
the captain’s dismissal.
“I didn’t want to get into a decision
where the president would feel that
he had to intervene because the Navy
couldn’t be decisive,” Modly told me
in a telephone call from Hawaii at
about 1 a.m. Sunday, Washington
time. He continued: “If I were presi-
dent, and I saw a commanding officer
of a ship exercising such poor judg-
ment, I would be asking why the
leadership of the Navy wasn’t taking
action itself.”
Modly offered a lengthy account of
his actions in the dismissal Thursday
of Capt. Brett Crozier, the command-
ing officer of the USS Theodore
Roosevelt. The nuclear-power air-
craft carrier with a crew of about
4,800 had been stricken by an out-
break of the novel coronavirus. On
March 30, Crozier sent an emotional
email pleading for help, which leaked
the next day. Two days after that,
Modly fired him — generating criti-
cism from former senior military
officials, who expressed deep concern
about the impact of the precipitous
act on morale and on commanders’
willingness to speak out with unwel-
come news.
Crozier, who walked alone down
the gangplank of his giant ship to the
cheers of his crew, is now infected
with the virus from which he tried to
shield his sailors.
The Roosevelt incident has the
ingredients of a morality play at sea:
A captain desperate to protect his
men, who takes actions that his
superiors view as a sign of faltering
resolve and judgment. Navy leaders
worry about protecting the ship, butalso about shielding the Navy from an
irascible, impulsive commander in
chief.
Modly described the shadow over-
hanging the Navy after Trump’s con-
troversial intervention last fall in the
case of Navy SEAL Edward Gallagher.
His predecessor, Navy Secretary Rich-
ard Spencer, “lost his job because the
Navy Department got crossways with
the president” i n the Gallagher case.
“I didn’t want that to happen again.”
Modly said he “had no discussions
with anyone at t he White House prior
to making the decision” to relieve
Crozier. Referring to his boss, Defense
Secretary Mark T. Esper, he said:
“That is Secretary Esper’s job, not
mine.” Navy sources had said Modly
told a colleague that Tr ump “wants
him [Crozier] fired,” and though
Modly denied getting any direct mes-
sage to that effect, he clearly under-
stood that Trump was unhappy with
the uproar surrounding the
Roosevelt.
Trump made clear his distaste for
Crozier and his plea for help in
comments to reporters Saturday: “I
thought it was terrible, what he did,
to write a letter.”
Modly’s personal involvement be-
gan March 29, four days after the
coronavirus-stricken Roosevelt had
arrived in Guam for a scheduled visit.
Covid-19 was spreading rapidly in the
crowded quarters, and Modly wanted
to offer help. He asked his chief of
staff, Bob Love, to contact Crozier
directly, and the two exchanged
emails that Sunday night.
By March 30, the evacuation of the
ship was still proceeding slowly, and
Crozier wrote his now-famous four-
page plea for help. The language was
emphatic and emotional: “The spread
of the disease is ongoing and acceler-
ating,” Crozier wrote. “Decisive action
is required.... We are not at war.
Sailors do not need to die.”
Modly said he learned about the
memo on Tuesday, t he day after it waswritten, when he arrived on a trip to
Los Angeles and was told a leaked
copy had been published that day in
the San Francisco Chronicle.
“I was flabbergasted,” Modly said.
“My only conclusion was, ‘he’s pan-
icking.’ It was so out of character.”
On Wednesday, Modly called Cro-
zier personally a nd asked, “What’s the
story?” — meaning, why had he sent
the email? According to Modly, Cro-
zier answered: “Sir, we were getting a
lot more cases. I felt it was time to
send out a signal flare.”
By Wednesday, Modly said, “it was
obvious to me that I couldn’t trust
[Crozier’s] judgment.” Adm. Michael
Gilday, the chief of naval operations,
with support from Esper and
Gen. Mark A. Milley, the chairman of
the Joint Chiefs of Staff, wanted to
conduct an investigation of the inci-
dent. But Modly said he told the chief
of naval operations: “I didn’t want to
do an investigation while [Crozier]
had a cloud over his head. I wanted to
take the heat myself.”
The climax came Thursday morn-
ing. At 7 a.m., Modly called Rear Adm.
Stuart Baker, the commander of the
Roosevelt’s multi-ship strike group
and Crozier’s immediate superior.
Modly said he asked Baker if he had
known that Crozier would be sending
the impassioned memo, and the
strike group commander answered:
“No. It arrived in my email inbox.”
After that conversation with Baker,
the acting secretary said he decided
that Crozier had to be relieved. Esper,
with Milley’s support, backed the
decision, Modly told me, and Gilday
stood by the acting secretary.
Modly said later Sunday morning,
in an unsentimental explanation of
why he reached the decision: “It’s
essential to love your crew, b ut it’s n ot
sufficient.”
Twitter: @IgnatiusPosta longer version of this column appears
at http://wapo.st/crozier.david ignatiusThe firing of Capt. Crozier
was meant to head off Trump
us Navy via reuters
Navy Capt. Brett Crozier on a s hip’s flight deck in the eastern Pacific Ocean on Dec. 19, 201 9.the employment survey occurred in early
March, before the full impact of coronavi-
rus layoffs was felt; (2) some workers on
temporary layoff were misclassified as
being employed; (3) some interviews
“were suspended... for the safety of
interviewers and respondents.”
Confusion also surrounds gross do-
mestic product (GDP), the economy’s
output. Some economists believe that
GDP will suffer a double-digit decline in
the second quarter. The CBO forecasts a
drop of 28 percent. Whew! But this is a
statistical fluke. The CBO actually ex-
pects GDP to decline by 7 percent during
the second quarter. However, the data is
presented on an annualized basis. So the
7 percent must be multiplied by four.
Presto: 28 percent.
Many forecasters expect the economy
to rebound in the summer. The pandemic
will subside, and many people could
return to work. Economists Nariman
Behravesh and Elisabeth Waelbroeck-
Rocha of IHS Markit, a forecasting firm,
expect the U.S. GDP to drop 5.4 percent in- Capital Economics, a consulting
firm, thinks the pandemic by year’s end
will be “under control in much of the
world, including the U.S. And we think
that this will set the stage for a more
lasting recovery.” European stocks could
advance 20 percent to 30 percent over the
same period. Goldman Sachs expects the
GDP to take a massive hit in the second
quarter but then jump 19 percent in the
third quarter, resulting in a 6.2 percent
drop for the whole year.
But pessimists abound. There’s no
doubt that the slump will be severe. Many
economists have identified surpluses of
people and products. Desmond Lachman
of the American Enterprise Institute
J
ust what kind of economic slump
will this be? It’s too early to know,
but it’s not too early to speculate.
I’ve done a totally unscientific sur-
vey of economic forecasts. Some
were solicited by me; others I received
from regular emails. What follows is a
quick summary of what I found. It d oesn’t
attempt to forecast peak unemployment
or the impact on the presidential elec-
tion. My purpose is more modest: to
clarify what we know and what we don’t.
You’ll recall the context. The coronavi-
rus has turned into a job-killing machine.
Businesses have closed by the thousands
as firms lost customers and governments
invoked lockdowns. Jobs, profits and the
stock market have dropped dramatically.
The next big worry may be deflation, a
general fall of prices. It’s already occur-
ring in oil, where daily global demand has
plunged from about 100 million barrels
to 80 million. Prices have spiraled
d ownward.
There’s already a huge glut of jobless
workers. Claims for government unem-
ployment insurance have jumped by
3.3 million and 6.6 million i n the past two
weeks. The total of nearly 10 million is
likely the fastest surge of joblessness
since the Great Depression. If that 10 mil-
lion were added to the preexisting job-
lessness, the unemployment rate (3.5 per-
cent in February) would jump to more
than 10 percent, a blog post by the
Congressional Budget Office estimates.
That hasn’t happened yet. When the
Bureau of Labor Statistics (BLS) released
the latest jobless figures on Friday, the
official unemployment rate rose to only
4.4 percent in March. The gap between
the 4 percent and the 10 percent has
many causes, the BLS said: (1) Much offears the worst. “The coronavirus epi-
demic is triggering other economic crises
in its wake,” he writes. Among those
crises is “the bursting of a global asset
price bubble... a global credit crunch,
and a major reversal of capital flows to
the emerging market economies.”
Economist Mark Z andi of Moody’s
Analytics is also downbeat. Households
face lost income and wealth, he writes.
“Some $10 trillion in stockholder wealth
(depending on the day and hour) has
evaporated in the past several weeks. A
powerful wealth effect — the relationship
between households’ wealth and their
spending — will soon take hold. We
estimate the wealth effect in a down stock
market t o be 4.5 cents for every $1 decline
in stock wealth; consumer spending will
decline by almost a nickel in less than a
year,” he says. If continued, this would
“crush consumer spending and the
e conomy.”
Deflation is a widespread fall in prices,
just as inflation is a widespread increase
in prices. In theory, modest deflation
could aid an economic recovery by mak-
ing goods and services cheaper. But rapid
deflation could be self-defeating. Compa-
nies become even less profitable, and
consumers delay purchases because pric-
es will be even lower.
The Great Depression provides evi-
dence of deflation’s damaging effects.
Agricultural prices collapsed, making it
harder for farmers to pay their debts.
Mortgages went into default by the thou-
sands. Prices fell more than wages, rais-
ing labor costs and frustrating firms’
efforts to resume production. Idle work-
ers and idle machines pushed prices
down, delaying the recovery. We cannot
let it happen again.robert J. samuelsonHere comes the great deflation threat