יום שלישי, 24 במרץ 2020

Trump bets that voters are as impatient as he is

The president’s political calculus on coronavirus is now clear — let others own the shutdowns.

President Donald Trump’s vow Tuesday that he would “love to have the country opened up and just raring to go by Easter,” less than three weeks from now, was the clearest signal yet of the political logic he hopes to follow in a presidential campaign shadowed by global pandemic.

He is eager to own the only good thing about a crisis that has paralyzed the country and left millions of people in housebound despair: The reality that life will at some point slowly lurch back to normal.

He is determined to make other people—specifically, governors and public health officials—own everything else, including the reality that massive shutdowns will continue long after the Christian holy day on April 12.

Trump’s Monday evening briefing at the White House and his remarks this afternoon at a “virtual townhall” hosted in the Rose Garden represented a new chapter in audacity from a president who has already authored volumes on the theme.

His pledges about a return “much sooner than expected,” as he put it Monday, to a functioning economy, in which people can return to work and schools and the familiar rituals of consumer culture, is in defiance of what health experts in his own administration say will likely be necessary to slow the spread of COVID-19 and prevent hospitals from being overrun. It is in defiance, too, of closures of schools and businesses that governors in both parties have already ordered beyond April 12.

Increasingly, though, it has become clear that the gap between Trump’s optimism and impatience and the caution and gravity of other figures in the crisis is exactly the point, in political terms.

It reflects his reading of the power dynamics of this crisis. The one thing he has complete authority over is the words that come from his own mouth. Other people, especially governors, can assume the legal authority over closures and public sacrifice that flows from them.

This appraisal reflects a narrow view of presidential power, especially from someone who is often perceived as trying to expand the prerogatives of his office. No concern about federalism likely would stop a president who wanted the responsibility from leading a consistent nationwide response in concert with state and local officials, who would be hard-pressed to stand in defiance of a national plan.

But it has become clear that when it comes to coronavirus Trump does not want this responsibility. He says governors are free to navigate the situation in their state; he’s also free to second-guess any decision they make that he doesn’t like.

In the Fox News session, for example, Trump took shots at New York Gov. Andrew Cuomo, who has pleaded with the administration for help in getting more ventilators to the state, currently the county’s epicenter of COVID-19 and nearing the limits of its capacity to help stricken patients.

He referred to unsupported allegations from former New York Lt. Gov. Betsy McCaughey that in 2015 Cuomo had turned down a chance to increase the state’s ventilator stockpile. “I’m not blaming him or anything else, but he shouldn’t be talking about us,” Trump told Fox’s Bill Hemmer. “He’s supposed to be buying his own ventilators.”

Trump: America is not 'built to be shutdown'

Later in the session, when Deborah Birx, the coordinator of the White House’s coronavirus task force said New York City’s problems are exacerbated by its density, Trump interjected, “Do you blame the governor for that?” Birx didn’t answer her boss’s question.

Cumulatively, Trump’s appearances in recent days have offered an answer on the briefly in-doubt question of whether a pandemic would force alteration of Trump’s basic rally-his-partisans, blame-his-adversaries political style. The answer: no.

In a televised Oval Office speech on March 11, Trump implored: “We must put politics aside, stop the partisanship, and unify together as one nation and one family.”

Now, he has signaled that the country may be in the pandemic together—“parts of our country are very lightly affected,” he said Monday—but the response will be guided by conflicting voices. He said at that briefing if it were “up to the doctors” they would say “let’s keep it shut down” across the world “for a couple years.”

Whatever the element of political calculation, the Rose Garden appearance also made clear that Trump is also genuinely frustrated by the dictates of health experts that the more extensive the shutdown the greater the effectiveness—no matter the associated human and economic cost.

“We lose much more than that to automobile accidents,” Trump said. “We don't call up the automobile companies and say stop making cars. We have to get back to work.”

COVID-19 has so far killed under 700 people in the United States, compared to just under 39,000 auto fatalities in 2019. But disease experts say if uncontained COVID-19 could kill hundreds of thousands in the United States.

While Trump’s handling of the crisis has drawn fierce criticism from many quarters—particularly his downplaying of the severity in January and February and bogus prediction that cases would soon be “down to zero”—there is evidence that general public appraisals are more generous.

The Gallup organization Tuesday released a poll showing 49 percent job approval for Trump, tied for his highest ever.

“Trump's response to the novel coronavirus pandemic may be behind his higher overall approval rating,” Gallup said, in announcing the data. “Americans give the president generally positive reviews for his handling of the situation, with 60% approving and 38% disapproving. Ninety-four percent of Republicans, 60% of independents and 27% of Democrats approve of his response.”

The polling organization also noted that presidents typically see approval ratings rise amid crisis at home or abroad, but the gains usually prove perishable.

Washington Is About to Pick Which Companies Survive

Even with the biggest economic bailout ever, a lot of firms won't make it through the coronavirus crisis. How should Congress handle the triage?

Two ugly truths about any epic economic crisis are that not all businesses will survive, and government interventions help determine which businesses will survive.

As coronavirus crushes the economy, Washington policymakers are scrambling to figure out who to bail out, a responsibility that one veteran of the 2008 financial rescue morbidly but accurately compared to the frantic triage work that doctors are currently doing in overcrowded Italian hospitals. They don’t want to waste precious resources on patients who can’t be saved, or on patients who can recover without their help. They know they can’t prevent all deaths, but they want to prevent the preventable deaths.

“You have to decide who you can bridge through this,” he said.

That kind of economic triage is happening right now. With American commerce facing an unprecedented shutdown, and just about every business other than Amazon, Costco and Purell taking devastating hits, Washington is gripped in a bailout frenzy. Nearly every industry is sending its lobbyists to ask Congress for handouts, including the private jet industry.

The coal industry wants permission to stop making payments to miners with black lung disease.

The hotel industry alone has requested a $150 billion bailout, which would help President Donald Trump endure the cancelled bookings at his resorts.

As Congress rushes to assemble an enormous stimulus package to try to slow the freefall or at least pad the landing, it’s becoming clear that a lot of federal dollars will be sent straight to American taxpayers, but also that a lot of federal dollars will go straight to the companies that employ them. Washington’s last epic bailout, the $700 billion Wall Street rescue of 2008, was wildly unpopular but ultimately quite successful—and while a financial panic is a different kind of crisis than a viral pandemic, it has some lessons for today about when companies should get help and how that help should be delivered.

These are political questions, and in the current congressional negotiations, Democrats are pushing for more aid for families, especially poorer families, while Republicans are pushing for more aid for businesses, with fewer strings attached. But there’s a growing bailout literature—including a new academic treatise, titled First Responders, produced by the architects and engineers of the last bailout—that suggests some answers are better than others.

In any case, Washington is about to send jetloads of money to American capitalists—perhaps not yet as much as the $700 billion it authorized in 2008 for the financial industry after the worst financial collapse since the Great Depression, but certainly more than the $80 billion it ended up injecting into the auto industry to soften the Great Recession in 2009. Trump’s own trillion-dollar proposal included $500 billion for businesses, and that figure seems to be growing as congressional leaders hash out a deal.

Ideally they’d be able to think long and hard about who to bail out and how the bailouts should be structured to minimize the short-term and long-term suffering. Right now they don’t have time to think long, but here are some hard problems they’ll need to consider.
The Pandemic Priority

Some of the industries begging for bailouts are truly vital to the U.S. economy. Many are on the cusp of huge layoffs that would cause awful pain. And none are responsible for the pandemic that’s destroying their bottom lines. But triage is about priorities, and Washington’s top priority is as spectacularly obvious as it has been largely absent from the stimulus debate: It needs to do everything it can to contain the coronavirus right now. The first rule for getting out of a hole is to stop digging, and that means throwing money at any business that can make more tests, masks or ventilators, provide more hospital beds or medical supplies, or otherwise help get the pandemic under control.

Trump’s two-page stimulus proposal did not specify one dime for these industries, but it’s the length and severity of the pandemic itself that will determine the ultimate fate of the airlines, the hotels and every other American business. Any aid that isn’t directed towards ending the pandemic is a Band-Aid.

It may seem unfair to send other blameless industries to the back of the line, especially after Washington approved $700 billion for too-big-to-fail banks that actually caused the cataclysm in 2008, but it really reflects the same principle. The crisis in 2008 was a financial panic, an all-out run on the financial system that props up the economy; the only way to end the panic was to assure depositors and creditors that their money would be safe in the system, and the only way to do that was to have the government stand behind the banks.

The crisis today is a public health catastrophe, and the only way to get cruise lines and hotels and factories back in business will be to stop the spread of the virus. So those industries don’t have a special claim to be first in line for bailouts—except insofar as cruise ships and hotels could be repurposed to quarantine the sick, or factories could be repurposed to make necessary medical equipment.

The financial bailout worked in 2008, and every dime the government invested in dying banks was repaid with interest after they recovered. This time, Washington shouldn’t expect to get back money it invests in the overwhelmed public health sector. But if that money helps contain COVID-19, it could save millions of businesses and trillions of taxpayer dollars.

The Critical Question

While the medical sector is the only sector vital to ending this crisis, it’s certainly possible that other industries could be deemed vital to the economy, as the auto industry was in 2009. Trump’s proposal included $200 billion worth of loans to airlines and “other critical sectors of the U.S. economy experiencing severe financial distress.” The next question in front of Washington in a time of triage is: Are any other sectors so critical to the economy that ordinary taxpayers should bail them out?

After all, just about every sector is experiencing severe financial distress. So even though more than 2 million Americans work in the hotel industry, and 15 million Americans work at restaurants, it’s hard to justify helping beleaguered hoteliers or restauranteurs through industry-specific bailouts rather than general programs to help businesses and workers. U.S. cruise lines want U.S. aid even though they’re headquartered outside the U.S. to avoid U.S. taxes. Their economic adversity is not evidently more critical for government to relieve than the adversity of shuttered barber shops or retail stores or movie theaters.

The airlines do seem likely to get a bailout, and they arguably do provide a vital economic service to a nation of frequent flyers that would be difficult to replace if they all went bust. Boeing is also seeking a $60 billion aid package, and while it might seem enraging even to contemplate helping a behemoth that was already in trouble before the pandemic because its planes kept falling out of the sky, it is America’s single biggest exporter. One lesson of the 2008 bailout, which rewarded reckless behavior but quelled a catastrophic panic, is that success should be measured by results for the nation, not by the morality of the bailout recipients.

Incidentally, another lesson of 2008 is that turbulence on Main Street—unemployed workers and underperforming businesses unable to pay mortgages and other loans—can create turbulence on Wall Street, which can then create a vicious cycle that intensifies problems on Main Street. It is unfortunately possible that if the pandemic drags on for awhile, Big Finance might need more help from Congress to stave off another panic. It would infuriate the country, especially after Goldman Sachs just gave its CEO a raise to $27.5 million, but financial markets are already deteriorating so quickly that the Federal Reserve has quietly begun to pump liquidity into faltering credit markets.

“It’s hard for markets to function when people can’t price risk, and right now there’s so much uncertainty that it’s very hard to price risk,” says Brookings Institution economist Nellie Liang, who ran the Federal Reserve's Office of Financial Stability and edited First Responders, the collection of essays by the 2008 crisis managers. “We’re definitely starting to see some dysfunction.”

This is why one Main Street solution floating around, a “Jubilee”-type mandate where the government suspends all payments on mortgages and rent and other loans for a couple months, could freak out creditors and destabilize the financial system yet again. "That. Would. Be. Crazy!" another crisis veteran told me. When governments tell creditors their secured loans are no longer secure, credit can dry up in a hurry. That’s why the Fed is starting to revive many of the lending programs it used to backstop the credit markets in 2008—including one guaranteeing private financing for creditworthy corporations outside the financial industry.

The problem, of course, is that if the pandemic drags on too long, few financial or non-financial corporations will remain creditworthy. This is why the best way to make sure there’s no need for another financial bailout, and to minimize the need for other business bailouts, would be to contain the coronavirus so that the non-financial economy can recover.

Still, it does look like the government will bail out some industries. The next questions to ask are: What kind of terms should the government impose, and what should it get in return?
Conditional Love

The three big myths about the bank bailout is that it cost taxpayers a mint, gave the banks blank checks with no conditions, and made sure no one on Wall Street lost money. In fact, taxpayers got their money back with interest, banks faced limits on executive pay—although those modest limits were lifted once the government was repaid—and most bank investors absorbed gigantic losses, while gigantic firms like Bear Stearns, Lehman Brothers and Wachovia were wiped out. And because there were real dangers to imposing onerous conditions on financial firms during a financial panic that would not apply to non-financial companies during a pandemic, Washington can be much tougher about its bailouts this time.

The first principle for any industry-specific emergency aid is that the main goal should be to get the industry through the emergency, not to bail out its investors or executives.

The government is about to blast unprecedented amounts of money into the economy, but that money ultimately comes out of the pockets of taxpayers, so it’s reasonable to ask bailed-out industries to repay the government once the emergency has passed. That means the bulk of the aid being delivered through loans or perhaps, as in 2008, government purchases of non-voting stock that avoid saddling the firms with excessive debt without subjecting them to operational control by Washington bureaucrats.

Either way, the beneficiaries of the aid should not be stockholders. There are good arguments for keeping vital industries afloat—even if they were mismanaged before the pandemic, even if they blew their cash reserves on stock buybacks. There might even be a case for government to protect their senior creditors, because financial markets can implode when it starts to look like Corporate America’s credit is no longer good. But there’s no reason to bail out their investors, who simply made bets in the financial casino that didn’t pan out. If you have money in the stock market, and you’re not a Republican senator who dumped equities after a scary intelligence briefing, you’re probably getting hammered right now; you don’t deserve special help if you happen to be invested in airlines.

Because this economic calamity is looking even worse than 2008, it’s unrealistic to expect the government to be as successful getting its money back this time. But the government actually has more leverage to impose harsh conditions on its bailouts than it had in 2008, when it was desperate for every bank to participate in the program despite the stigma.

“The banks had a gun to our head,” another former financial first responder told me. “That’s somewhat less true when the bailouts are of, say, airlines.”

Now that Washington can force bailout recipients to meet just about any demands, what should those demands be?

At the very least, Congress has leverage can demand full transparency and powerful oversight over every dollar of federal aid. The Trump administration is reportedly pushing for a $500 billion bailout fund that would not even require immediate disclosure of the bailout recipients, which ought to be a non-starter.

Meanwhile, the airlines have already volunteered to rein in executive compensation, stop paying dividends and refrain from stock buybacks over the life of their loans, a good indication that Congress could ask for more, like limiting those activities even after the loans are repaid. America’s top five airlines indulged in $45 billion worth of stock buybacks that drained their reserves before the pandemic, and it makes sense to ensure that any industry “vital” enough to get bailed out is also required to take its own survival seriously. Senator Elizabeth Warren has called for a permanent ban on stock buybacks for any bailed-out firm, as well as a $15-an-hour minimum wage and a worker representative on its board. Trump’s proposal suggested that bailed out airlines should face “continuation of service requirements.”

But it’s worth thinking about when punitive conditions can be too punitive, since the goal is to make sure these vital industries are healthy in the future. Trump’s notion of service requirements sounds like a plan to force airlines to keep flying planes with hardly any passengers, a recipe for bigger losses and bigger bailouts. Warren and other Democrats support a $15 minimum wage for everyone, but until they can pass it in Congress, does it make sense to saddle vital industries with higher labor costs than non-vital industries? Even limits on executive compensation, while clearly sensible as long as firms remain wards of the state, could make it harder for them to attract better leaders after they repay their loans.

Then again, requirements that bailed-out companies keep their workers on payroll can be onerous, too, but it’s unlikely that Washington will hand out hundreds of billions of dollars to businesses again without some kind of limits on layoffs. Bailouts aren’t only supposed to save vital industries. They’re also supposed to help the people who work in those industries.
Bailouts for the People

The easiest way to get money to ordinary Americans in an emergency is for the government to give it to them. The Republican and Democratic stimulus plans all envision sending checks to taxpayers. Democrats are also pushing for major increases in antipoverty payments like unemployment insurance, which many Republicans seem willing to accept. But there is also a powerful argument for giving aid to businesses, especially small businesses, if they use the aid to keep paying workers who would otherwise be laid off.

“We don’t want millions of people dropping onto the unemployment rolls, because once they’re on it’s hard to get off,” says one GOP congressional aide. “It’s important to keep people connected to their employers, and there’s also inherent dignity in having a job.”

That makes sense, and it would be great to limit the disruption from a near-total shutdown of the economy. But it would also be extremely difficult to do in a triage moment.

A gym, a café, a store, or any other business depending on customers who are no longer leaving their homes won’t be able to pay its employees until the virus is contained, and probably won’t be able to pay back a loan even after the virus is contained. This is why the leaders of the small business committees in the House and Senate drafted a bipartisan $300 billion plan to have the government guarantee loans covering payroll costs during the crisis, understanding that it might eventually cost much more. Americans make about $1 trillion a month, so a lot would depend on the boundaries set by Washington: Would all businesses be covered, no matter how big? Would all salaries be covered, no matter how high?

Again, there’s what Liang calls an “adverse selection problem” in essentially forgiving loans like this during a crisis; businesses that need them probably won’t be able to pay them back, while businesses that can pay them back probably don’t need them. And once the government decides to stand behind a business, there’s a natural tendency to do whatever it takes to keep it afloat. The Senate Republican stimulus proposal included that bipartisan payroll idea but expanded it to cover lease and mortgage payments for small businesses as well. And Democrats have said the latest GOP version would only require bailed-out businesses to maintain their workforce “to the extent possible,” which these days could be a pretty minimal extent.

This is all uncharted territory, because Washington is really dealing with two crises. One is the current nightmare of a nation in lockdown, a situation that is going to make it just about impossible for any bricks-and-mortar business that isn't selling groceries or hand sanitizer to stay afloat for long without government help. And then there’s the question of what the economy will need after the lockdown is over, which is even harder to answer when nobody knows how long the pandemic will last, or which kinds of businesses will be best suited to survive in a post-pandemic economy. That’s why ending the pandemic is almost infinitely more important than any other economic priority.

Keeping businesses alive is important, too, even though some of the firms that receive government medicine are going to die anyway. But that’s why the triage analogy only goes so far. Government doesn’t have the power to save every business, just as the Italian doctors don’t have the power to save every patient, but government does have the power to make sure every American has enough cash to buy essentials during the crisis. And as they spend that cash, they’ll help lay the groundwork for a recovery.

Before Washington even thinks about giving the Trump Administration a $500 billion bailout fund for businesses, it can start by bailing out the ordinary taxpayers who send money to Washington every year. Even if they aren’t too big to fail.

יום חמישי, 19 במרץ 2020

Mnuchin predicts ‘gigantic’ fourth quarter after coronavirus rebound

Pent-up demand will drive the economic recovery, the Treasury secretary suggests.

Treasury Secretary Steven Mnuchin. | Mark Makela/Getty Images

Treasury Secretary Steven Mnuchin acknowledged Thursday the U.S. faces months of economic contraction, but predicted a “gigantic fourth quarter” as Americans release “pent up demand” and return to “a normal world.”

In an interview with Fox Business Network, Mnuchin said he believes the economy will see its largest decline in this year’s second quarter, from April through June, followed by a third-quarter recovery as advancements in viral treatments and vaccines eventually halt the spread of the virus.

"I think you’re going to see a lot of pent-up demand," Mnuchin told Maria Bartiromo. "When we get through the next few months and Americans see what’s happening, and we have killed this virus, people are going to be comfortable going back to work."

Mnuchin continued: "We're going to be opening back business and people are going to continue what they do. They are going to live. They are going to shop. They are going to eat out. They are going to enjoy restaurants and travel and entertainment and we will go back to a normal world.”

Bartiromo pressed Mnuchin on company bailouts — a term he continues to push against. He emphasized Thursday that many of these companies will ultimately pay back any loans.

“This isn’t about bailing out bad businesses. This isn’t about banks that made bad loans," Mnuchin said. "These are about very, very good companies that have been instructed to shut down, so they need liquidity. That’s what they need."

"In most cases, my expectation is they will be able to pay back these loans. In the case of small businesses, if they can’t afford to pay back those loans, we’ll forgive them," he continued. "I don’t consider that a bailout. I consider that an incentive to keep workers hired.”

Mnuchin also clarified his reported warning to Republican senators on Tuesday that unemployment could spike to 20 percent if action is not taken. “What I said is that 40 percent of our workforce is in small business," he explained. "And I said, if half of them were let go, mathematically, we’d be at 20 percent unemployment.”

Mnuchin’s upbeat outlook comes alongside grim new data emerging from the federal government. The Labor Department on Thursday reported 281,000 new claims for unemployment insurance last week, a one-third increase over the previous week, a jump it attributed to the pandemic. It was the highest number of claims since September 2017, and economists expect that figure to soar in the coming weeks.

Asked whether economic data should be ignored in this volatile environment, Mnuchin replied, “The statistics in the short run of economics are obviously not relevant. This is an unprecedented situation where, at the government’s direction, we shut down parts of the economy and now is the time that we provide government support.”

Justin Trudeau: Working from home just like the rest of us


In isolation with his family, Canada's prime minister oversees Covid-19 response and bath time.

Canadian Prime Minister Justin Trudeau works from home on March 16. | Ella-Grace Trudeau

OTTAWA — Justin Trudeau’s week will one day fill the pages of Canadian history books — he’s sealed off the U.S. frontier to non-essential travelers, unleashed a huge economic aid package and moved closer to invoking a law that can empower the government to limit civil liberties.

And the G-7 leader has done it all from home, with his three young kids underfoot.

In fact, for more than a week, the prime minister has looked after the children solo — 24/7 — as the only able adult in the house.

He and his kids entered 14 days of self-isolation together after his wife, Sophie Grégoire Trudeau, tested positive for Covid-19 last Thursday. He insists he’s fine and says Sophie, who is quarantined in one part of their house, is feeling better despite mild flu-like symptoms.

There are no caregivers or political staff at the Trudeau home, just the five members of his immediate family, a government official told POLITICO.

Like so many parents now working from home, he's encountered some challenges.

Trudeau was late for an evening phone meeting with political staff this week after getting delayed by six-year-old Hadrien’s bathtime, said the official who was on the call.

From the homefront, the prime minister has also been in the thick of domestic and international coordination on coronavirus, fielding calls from U.S. President Donald Trump, other world leaders, provincial premiers and his cabinet ministers.

He even participated in a video conference call with fellow G-7 leaders about a joint Covid-19 response while he sat in his home office, where his kids’ artwork can be seen tacked on the wall.

Trudeau tweeted a photo taken by his daughter Ella-Grace, 11, of the moment. The image showed the prime minister all by himself while some of his peers, like Trump, were seated at boardroom tables flanked by officials.

Trudeau has about a week left in self-isolation and, the official said, it could mean he will be absent from the House of Commons next week when Parliament reviews his multibillion-dollar rescue plan. Elements of the package must be approved by a quorum of MPs, who will be recalled to Ottawa.

Trudeau has said his cabinet is also mulling whether to invoke the Emergencies Act, which would give the federal government extraordinary powers to, among other things, restrict the mobility of Canadians.

Such an unprecedented step would also need parliamentary approval and, if cabinet decides to move forward with the law, Trudeau may not be present for the debate.

All of these major steps have been discussed by phone from inside Rideau Cottage, a red-bricked house on the property of the Governor-General’s much larger residence Rideau Hall.

But despite the situation, Trudeau has increased his public appearances.

He’s been slipping outdoors to hold almost-daily news conferences a few steps from his front stoop.

In his first media availability outside the home after Sophie’s positive test, Trudeau called his situation “an inconvenience and somewhat frustrating,” but he noted his family was doing the right thing by following the advice of medical professionals.

Inside Rideau Cottage, domestic duties have kept the prime minister busy.

Trudeau, the official said, has been preparing meals for Hadrien, Ella-Grace and Xavier, 12, using supplies left outside the door. The drop-offs have also included a box of Star Wars Legos to help preoccupy the kids.

The sounds of children yelling or laughing have at times been overheard during phone discussions about “pretty serious stuff,” the official said.

All meetings with staff, they added, have been conducted by phone because installing secure video links in the home where people are self-isolated was seen as a big obstacle.

The phone calls have created new challenges as ministers and other officials try to follow along with charts and graphs. Key discussions have grown more complex due to the lack of body language. “You don’t see the nuance of the raised eyebrow,” they said.

The official said the prime minister’s example of working from home could serve as an opportunity to “normalize” the fact that many more people may have to do the same.

There are small silver linings. The proximity of Trudeau’s news conference Wednesday to his front closet came in handy.

He made his major economic announcement and then he paused the live outdoor news conference, which was held on a cold late winter day.

“Just before I take questions, I’m supposed to model healthy behavior, I’m going to go grab my coat and I’ll be right back,” he said before dashing into the house and returning a few seconds later.

Trudeau has used his news events to urge others to work from home as much as possible.

“Don’t go out unless you absolutely have to,” he said this week. “Work remotely if you can. Let the kids run around a bit in the house. Things will get better.”

יום שלישי, 17 במרץ 2020

Washington Learns to Love ‘Money for Everyone’

Why a partisan city tends to unite over the idea of just writing a check in a crisis.

Suddenly, it seems like everyone wants Uncle Sam to send Americans checks.

In just the last two days, the idea that the federal government should simply give people money to help them through the coronavirus pandemic has been endorsed throughout the political spectrum—by Democratic senators like Sherrod Brown and Michael Bennet, Republican senators like Mitt Romney and Tom Cotton, just about every economist who worked for President Barack Obama, and finally, this afternoon, by President Donald Trump. There’s a #ChecksChecksChecks hashtag on Twitter. The concept of Money For All has gone, well, viral, and legislation is surely coming soon.

At a time when Washington is bitterly polarized over almost everything—including other stimulus proposals that would target beleaguered industries or low-income workers—airlifting cash into American households is one of those rare concepts that almost every politician can embrace, even though it smacks of the big government liberalism that Republicans mock, even though every dollar gets added to the deficit.

In under 48 hours, the debate has shifted from whether to do it to how big to make it, with $1000 now looking like a baseline, and some proposing to give some Americans as much as $4500.

After all, a checks-in-the-mail stimulus is easy to explain, easy to execute and, for obvious reasons, popular with the public. It can pump money into the economic bloodstream faster than infrastructure projects or most other government programs. And unlike a payroll tax cut, which Trump had been pushing until Tuesday, it can provide help for vulnerable people who aren’t on a payroll. House Speaker Nancy Pelosi once helped get it done for another Republican president, George W. Bush. Obama’s economists once persuaded him to do it in a more complicated way, a political mistake that most of them still regret.

“It makes sense on so many levels,” said Arshi Siddiqui, who was Pelosi’s senior policy adviser when she negotiated the Bush stimulus in January 2008. “It can get money to people quickly, especially people living paycheck to paycheck, and it has real bipartisan appeal.”

That $168 billion Bush stimulus, crafted after the Great Recession started but before Lehman Brothers and the global financial system collapsed, happened in a much less turbulent economic moment but a similar election-year political context, pitting a newly Democratic House led by Pelosi against a scarred Republican president. The speaker is a San Francisco liberal, but she’s the daughter of a Baltimore machine pol, and as she showed last week when she negotiated an emergency coronavirus bill with Trump treasury secretary Steven Mnuchin, she likes to make deals.

In 2008, her negotiating partner was Bush treasury secretary Henry Paulson Jr., a former Goldman Sachs CEO who also liked to make deals. House Minority Leader John Boehner of Ohio, a conservative Republican who was also at the table, was yet another dealmaker.

The climate did not necessarily seem conducive to compromise. Bush had unilaterally announced a plan to send out checks to most Americans, but not to the working poor. Boehner wanted to stuff the plan with tax breaks for businesses, while Pelosi wanted spending programs for the needy. As the talks began in the House’s “Board of Education” room, the tiny hideaway where Speaker Sam Rayburn used to “educate” members unwise enough to cross him, Boehner groused that the goal was supposed to be economic stimulus, not income redistribution. Pelosi shot back that the actual goal was preventing “your potential recession.”

But it took just two days to unite the room around a simple middle ground: Send out checks of up to $1200 per family plus $300 per child, like Bush wanted, and include the working poor, like Pelosi wanted. She insisted that top earners couldn’t be eligible, and Boehner insisted on a tax break encouraging businesses to buy equipment, but Congress overwhelmingly approved the deal in February, and the checks started going out in May. And Paulson says the bipartisan trust built over those two days was vital to passing the bipartisan $700 billion bank bailout that helped rescue the financial system in the fall.

“That was such a smooth negotiation,” Paulson said in an interview. “We knew we were doing the right thing—to get the money out quickly, and also to build some bipartisan momentum.”

Of course, the mild boost from the Bush stimulus checks was soon overshadowed by the financial crisis, and by the time Obama took office the economy was shedding 750,000 jobs a month. His advisers agreed: The economy needed a lot more stimulus to stop the death spiral. They also agreed: Part of the stimulus should get people cash as quickly as possible, so they could pay bills, buy groceries, and patronize businesses that might otherwise lay off more workers and accelerate the death spiral. But they did not agree how to get people cash.

Obama’s political advisers favored the politically attractive solution of sending every American a big check. His chief of staff, Rahm Emanuel, couldn’t wait for the “Ed McMahon moments” when voters would find Publishers Clearinghouse-style lottery winnings in their mailboxes. But Obama’s economic advisers warned that the recipients of one-time windfalls were more likely to save the money, and less likely to stimulate the economy by spending the money. Instead, they recommended dribbling out the cash a few dollars a week by reducing government withholding from paychecks, so the workers would be less likely to notice and more likely to spend.

The president sided with his economists. He told his team that the politics didn’t matter; all that mattered was stopping the freefall. The $116 billion Making Work Pay tax credit ended up providing up to $400 to about 95 percent of American workers, but polls showed that less than 10 percent of the American public even knew about it. That was the whole point; the credit was designed not to be noticed. Politically, though, it felt like sending flowers to a romantic interest without signing the note. Some Democrats had mocked the Bush stimulus checks as a cheesy PR stunt, but after the 2009 rise of a new Tea Party that accused Obama of raising taxes like King George, followed by the 2010 Republican takeover of the House, many of his aides wished they had gone ahead with a cheesy PR stunt of their own.

“The political theory was if you do the right thing, and you get results, that’s good politics,” Obama aide Ron Klain told me years later. “In retrospect, it just seems stupid.”

It is no coincidence that in early March, Jason Furman, Obama’s former top economist and a key architect of the Obama stimulus, was one of the first voices calling for a coronavirus stimulus that simply sent $1000 checks to all Americans—and he now thinks the checks should be even bigger, with additional checks to follow if the economy fails to revive. When I asked Jared Bernstein, another former Obama White House economist, why simply giving people money is such a popular idea, he asked me if that was supposed to be a trick question.

“Because their income is, as we speak, taking a huge hit, and they still have to survive,” Bernstein said. “This is probably the best way to get substantial help to people quickly.”

Not even proponents of universal stimulus checks think that sending people money and putting the tab on the government’s credit card is ideal public policy. There are questions about whether rich Americans should get checks at all, and whether poorer Americans who are more likely to spend the money should get bigger checks. Dramatically expanding government benefits like unemployment aid and food stamps might be faster and better stimulus; the same is true of providing aid to states so that they don’t lay off workers or cut benefits.

But the one argument that isn’t being made against giving people money in the Trump era is the argument that Republicans made relentlessly against stimulus handouts in the Obama era: They will increase the budget deficit. Deficits have exploded to over $1 trillion under Trump despite a strong economy, and are now poised to soar well over $2 trillion. But the Republican Party that mocked Keynesian economics in 2009 is now eager to pour tax dollars into the faltering economy—perhaps accompanied by a Publishers Clearinghouse-style letter from Donald J. Trump—and worry about the fiscal consequences later.

“This is not the time to worry about the deficit,” Mnuchin said Tuesday.

יום ראשון, 15 במרץ 2020

A majority of Americans continue to favor replacing Electoral College with a nationwide popular vote

A majority of U.S. adults (58%) say the Constitution should be amended so the presidential candidate who receives the most votes nationwide wins, while 40% prefer to keep the current system in which the candidate who receives the most Electoral College vote wins the election.

Support for amending the Constitution has increased slightly since the period immediately following the 2016 election. In a November 2016 CNN/ORC survey, roughly half of adults (51%) favored amending the Constitution to eliminate the Electoral College. And in a March 2018 Pew Research Center survey, 55% favored taking this step.

The current level of support for eliminating the Electoral College is nearly the same as in 2011, when 62% favored amending the Constitution. However, partisans’ attitudes on this question have grown further apart since the 2016 election, with Republicans becoming more supportive of the current system.

How we did this

In 2011, about half of Republicans and independents who lean toward the Republican Party (51%) said the Constitution should be amended. Today, nearly two-thirds prefer to keep the current system, a figure that is essentially unchanged over the past two years.

Among Democrats and Democratic leaners, 81% now say the Constitution should be amended, modestly higher than in other recent years.

Women and younger adults are more likely than men or older adults to support amending the Constitution so the candidate who receives the most votes wins the presidency. About six-in-ten women (63%) say the Constitution should be amended so the candidate with the most votes wins the presidency, compared with 52% of men. And while 65% of those ages 18 to 29 support having the popular vote winner become president, the share falls to 51% among those ages 65 and older.

Gender and age differences in these views are more pronounced among Republicans than Democrats. For example, 41% of Republican women favor amending the Constitution so the winner of the popular vote becomes president, compared with 24% of GOP men.

Among Republicans, those who do not have a college degree (36%) are more likely than college graduates (23%) to favor deciding the election with the popular vote. By contrast, Democrats who have not completed college (78%) are somewhat less supportive than Democratic college graduates (86%) of amending the Constitution so the popular vote winner becomes president.
Views of parties’ commitment to fair elections

In addition to having starkly different views about how presidential elections should be conducted, Republicans and Democrats both express low levels of confidence in the other party’s commitment to ensuring fair and accurate elections in the United States.

Overall, 52% of adults say the Republican Party is somewhat or very committed to fair and accurate elections, but just 22% say the GOP is very committed to this goal.

A similar proportion of adults (55%) say the Democratic Party is very or somewhat committed to fair elections, with only 20% saying the party is very committed.

Large majorities of both Republicans (87%) and Democrats (83%) have confidence that their own party is committed to fair elections. And equally small shares – 23% in each party – are confident that the opposing party shares this commitment.

יום שלישי, 10 במרץ 2020

Democrats see Biden and Sanders as very different ideologically

Joe Biden and Bernie Sanders at the Feb. 7 Democratic presidential primary debate at St. Anselm College in Manchester, New Hampshire. (Joe Raedle/Getty Images)

In the wake of Super Tuesday, the Democratic presidential primary field has narrowed to front-runners Bernie Sanders and Joe Biden. Democrats see big ideological differences between the two candidates, according to data from Pew Research Center’s Election News Pathways project.

Most Democrats and Democratic-leaning independents describe Sanders’ political views as liberal (70%), including about half (48%) who say he is “very liberal.” By contrast, Democrats are about as likely to describe Biden’s views as moderate (31%) as they are to describe them as liberal (31%); 20% view Biden as conservative.

About 15% of Democrats say they’re not sure what Sanders’ or Biden’s political views are (14% and 16%, respectively). Uncertainty about their views is especially high among Democrats who are not following election news closely (31% for Biden, 25% for Sanders).

How we did this

A Pew Research Center survey earlier this year found that nearly half of Democratic and Democratic-leaning registered voters (47%) describe their own views as liberal, compared with 38% who identify as moderate and 14% who call themselves conservative. The share of self-identified liberals among Democratic voters is higher than it was in 2012 and earlier, but little changed over the past few years.

The new survey – conducted Feb. 18 to March 2 among 10,300 U.S. adults, including 5,771 Democrats and Democratic leaners – finds differences among Democrats in perceptions of Biden’s and Sanders’ political views by race and ethnicity, age, education and ideology.

White Democrats (83%) are far more likely than either black Democrats (47%) or Hispanic Democrats (57%) to describe Sanders’ views as liberal. Larger shares of black (23%) and Hispanic Democrats (18%) than white Democrats (10%) say they are not sure how to describe Sanders’ political views.

When it comes to views of Biden’s ideology, differences in views by race and ethnicity are more modest than in views of Sanders. However, white Democrats (37%) are more likely than black Democrats (24%) or Hispanic Democrats (22%) to view him as moderate. As with views of Sanders, a larger share of black and Hispanic than white Democrats say they aren’t sure how to describe Biden’s political views. (These patterns hold even among those who follow political and election news very or somewhat closely.)

Majorities of Democrats across age groups view Sanders as liberal, with relatively modest differences from one age group to the next – the exception being Democrats ages 65 and older, who overwhelmingly say Sanders is liberal (81%). However, there is an age gap in views of Biden: Nearly half of Democrats 65 and older (45%) say Biden’s views are moderate, while 31% say he is liberal and just 13% call him conservative. Among Democrats ages 18 to 29, by contrast, nearly as many describe Biden’s views as conservative (28%) as liberal (31%), while 20% view him as moderate.

Democrats with a college degree are far more likely to view Sanders as liberal than those who have not graduated from college (89% vs. 59%). In part, this is because 20% of Democrats without a college degree aren’t sure what Sanders’ political views are, compared with just 4% of those with a degree.

Liberal Democrats widely view Sanders as holding political views similar to their own. Nearly nine-in-ten liberal Democrats (86%) view Sanders as liberal, including 61% who say he is very liberal. Among Democrats who are conservative or moderate, a smaller majority (59%) says Sanders is liberal, including 38% who view him as very liberal. There is less variation by ideology in assessments of Biden’s political views, though liberal Democrats are somewhat more likely to say he is moderate (36% vs. 28% among moderate or conservative Democrats).

While Democrats see Biden and Sanders in different ideological terms, most Republicans and Republican-leaning independents view both candidates the same way: as liberals.

Majorities of Republicans say Sanders’ and Biden’s views are liberal (78% and 65%, respectively). However, Republicans are much more likely to describe Sanders as very liberal (68%) than to say this about Biden (21%).

יום ראשון, 1 במרץ 2020

Elliott Management’s Paul Singer seeks to replace Twitter CEO Jack Dorsey, source says

Elliott Management founder and billionaire investor Paul Singer is seeking to replace Twitter CEO Jack Dorsey, a person familiar with the matter told CNBC Friday.

Twitter did not immediately respond to a request for comment from CNBC.

Elliott is pushing for Dorsey’s removal in part because his attention is split between running both Twitter and Square, and Dorsey’s desire to move to Africa, the person said. Dorsey is the only CEO of two public companies with market valuations of more than $5 billion.

Twitter was up more than 7% after hours.

Facebook Friends: How Close Are Mark Zuckerberg and Pete Buttigieg Really?

The answer could have long-term consequences for both wunderkinds.

In early 2017, Mark Zuckerberg was gaming out his personal challenge for the year—an epic listening tour to meet with Americans from every state in the U.S. The Facebook CEO hadn’t checked off Indiana yet, but he had an idea where he wanted to go. He just needed help with the execution. Zuckerberg reached out via his preferred method of communication—Facebook Messenger—to a fellow Harvard alum who after leaving Cambridge, had eventually returned to his South Bend roots and become a successful local politician. He got no response. So he turned to an old Harvard dorm-mate named Joe Green, asking for an introduction.

Green, who lives in Los Angeles where he builds co-living spaces and funds psychedelic research, and Zuckerberg had stayed in close touch over the years. “We were talking,” Green said to me, recounting the conversation which has not been reported before, “and he said, ‘Hey, do you know Pete Buttigieg?’ And I was like, yeah, of course, super well.’”

And so Green let Buttigieg know that Zuckerberg was trying to get in touch. “I told Peter, ‘Hey, I’m going to introduce you to Mark Zuckerberg,’ and he had to change his Facebook settings” to be able to get the CEO’s note to him.

Some weeks later, on a dreary day in April, Zuckerberg and Buttigieg were sitting in the mayor’s Jeep as Zuckerberg fiddled with the Facebook Live video stream. Buttigieg, wearing a too-big bomber jacket, gave his famous guest a tour of the Rust Belt city, gamely describing the city’s revival—how an old Studebaker factory site was being repurposed into a data center, how downtown’s one-way streets had been redesigned to slow city traffic and foster human connection. They stopped for coffee at a pay-it-forward place, and had lunch at a family-owned tavern in a largely Latino, working-class part of the city. One of Zuckerberg’s spokespeople described the pair as “friends” to the local reporters who were there to chronicle this visitation from the world’s most powerful social media executive.

But this was not a reunion of college buds. In fact, it was more like the beginning of a relationship that has evolved in unexpected ways over the past three years as these two precociously talented and ambitious young men have asserted themselves on the national stage.

Zuckerberg, class of 2006, and Buttigieg, class of 2004, overlapped for two years at Harvard but ran in largely separate circles. Zuckerberg was a Phillips Exeter kid from Westchester, New York, obsessed with building computer games and proto-networking tools. Buttigieg was student body president at the co-ed Roman Catholic St. Joseph’s High School, a Midwesterner with a deep interest in public service who’d applied to Harvard sight unseen. Zuckerberg and Buttigieg wouldn’t meet, and then only fleeting, until the 2012 New York wedding of another mutual Harvard friend: Facebook co-founder Chris Hughes.

At the time their paths crossed for a few hours in South Bend, Zuckerberg was struggling to defend himself and his company against growing blowback over the 2016 U.S. presidential election. Some wondered if this tour wasn’t laying groundwork for a presidential run of his own. Buttigieg, meanwhile, had only recently fallen short in his bid to become chairman of the Democratic National Committee. Hosting the tech luminary was a helpful shot of positive national publicity at a moment when he was beginning to explore his options for wider office.

Now three years later, their relationship is the subject of ramped-up speculation and interest. Zuckerberg is still one of the technology world’s most powerful figures, but his half-trillion-dollar company is facing unprecedented threats, as calls grow to break it apart. And, surprisingly, it’s Buttigieg who has mounted a top-tier presidential campaign.

And suddenly, the connection between Zuckerberg and Buttigieg, as tenuous as it might be, matters for both men—and for the country. Politically, beating up on tech firms has become a winning populist move. But tech leaders can still be powerful and wealthy allies—and in an election stuffed with aging Boomers, there’s also appeal in the idea of a digital-native leader who can bring tech giants to the table and speak to them in their own language.

For now, Buttigieg seems to be keeping the tech world close but Facebook at a distance.

Buttigieg has drawn considerable financial support from Silicon Valley for his White House bid, and Zuckerberg and his wife drew headlines when they recommended staffers to the campaign. But Buttigieg has in recent months begun to speak out more forcefully about the need to constrain the power of both Facebook and Zuckerberg. In the midst of a massively consequential election that could hinge in no small measure on the decisions Zuckerberg makes about how his platform handles political ads, their relationship is evolving—and not necessarily in a friendlier way. In an interview with the New York Times editorial board in January. Buttigieg criticized what he called Facebook’s “refusal to accept their responsibility for speech that they make money from.”

The Buttigieg campaign says that the two haven’t spoken for a year and a half, a characterization Facebook doesn’t dispute. Buttigieg said a year ago that he and Zuckerberg have been in touch “every now and then,” but clarified Sean Savett, a Buttigieg campaign spokesperson, “They haven’t talked in over a year, or since, really, Pete’s run for president.”

Back in the mid-aughts, Zuckerberg was holed up in his dorm at a desk scattered with empty Snapple bottles, building, first, FaceMash, a site for ranking the attractiveness of his classmates, and then TheFacebook.com. Buttigieg, meanwhile, was angling to win election as president of Harvard’s Institute of Politics, the Kennedy family-endowed center that lets service-minded undergrads rub shoulders with political luminaries. Buttigieg got onto Facebook as one of the first few hundred usersfacebook.com/287 still redirects to one of Buttigieg’s profiles—but he later recalled to New York Magazine, “I thought it was just another Harvard thing. We didn’t realize where it was going.”

Quickly, though, the scale and ambition of what Zuckerberg was up to would become clear. Facebook launched on February 4, 2004, and by December, it had grown beyond Harvard, and beyond the Ivies altogether, amassing more than a million users. A Harvard friend of Zuckerberg says that what Mark had pulled off, at age 19, quickly became an inspiration on campus. If Mark can conquer the Internet, what world changing can the rest of us get busy doing? “There was this draw—that it was such a huge success that it was like, ‘Oh, I can do that, too,’” says the friend, Sam Lessin, who went on to spend four years at Facebook, ending up as the vice president of product management. “It was part of the atmosphere.”

But while Zuckerberg was, in those days, on the cusp of changing the world, he had little interest in doing it through traditional means. “After [the] summer of ’03, I thought social networking should be applied to politics,” Joe Green said in an interview in 2007. He says he pitched his college dormmate on the idea. “Instead he built Facebook. That was clearly a bad choice,” Green joked.

“He asked me to be his partner,” Green said. “I instead went to work for [John] Kerry.”

It was the summer of 2004, and Zuckerberg, who’d had run-ins with Harvard administrators over copying photos from the school’s network to build FaceMash, decided to drop out of the university and make a go of his site out in California. Buttigieg, 22, had graduated, and was eager to get some experience out on the campaign trail. Green, 21, was still wrestling with his decision (under some pressure from his father) to not go west with Zuckerberg, who didn’t seem especially contrite over the FaceMash episode. (Zuckerberg would later laughingly recall that during the dramatic night in his Kirkland House dorm room when he was scrambling to deal with the FaceMash aftermath, “Joe comes in and takes our last Hot Pocket.”) In a move that might have cost him hundreds of millions of dollars, Green joined a crew of politicos being put together by Mike Moffo, whose brother Chris had gone to Harvard, to work on Democratic presidential nominee John Kerry’s bid to pull off an unlikely primary win in Arizona.

Arizona was a third-tier state for Kerry, and thus an opening for aspiring but inexperienced politics junkies. Housed in the squat state-party headquarters in Phoenix “that lost Internet every time it rained,” recalls Kate Gallego, the Arizona for Kerry campaign has gained over time a reputation as an all-star squad. Gallego (Harvard ’04), who worked on legislative issues for the state party, is now mayor of Phoenix. Rohit Chopra (Harvard ’04) was deputy field director and one of Green’s bosses; he’s now a commissioner on the Federal Trade Commission. Moffo would go on to be deputy field director for the successful 2008 Obama campaign. Doug Wilson was the state director; he now is a foreign policy lead for the Buttigieg campaign.

But even among that crew, Buttigieg, who worked on research and communications for the campaign, had an aura. “You got the impression that he was a total rock star,” says Jesse Gabriel, now a California assembly member. “He was very serious, very thoughtful, and he just had a gravitas about him in a way that struck me that he was going to go onto big things.”

Green, meanwhile, was field organizing out in Lake Havasu City, a Spring Break spot on the Colorado River in rural Arizona. Says Gabriel of Green, “he was this sort of lovable and crazy guy. He always had wild stories and was getting into all kinds of weird situations. I think he was living in an underground bunker part of the time. But Joe is also deeply intellectual, and very, very smart.” (Green confirms he did spend part of the time living subterraneanly.)

Still, Green and Buttigieg, however odd a pair they were, stayed close. Says Gabriel, “they’re the kind of guys who could, you know, have a beer and talk de Tocqueville.”

Arizona grew out of reach for Kerry and the band broke up.

Buttigieg would go build his résumé, first at Oxford as a Rhodes Scholar and later as a McKinsey consultant based out of Chicago before heading home to South Bend. Green would return to Harvard, spending years as a startup founder working on the idea that social networks could be used for politics. It was a truth proven when Chris Hughes—a friend of Buttigieg’s and a roommate of Zuckerberg’s who had, after graduating, headed west with Zuckerberg to launch Facebook—left the company in 2007 to join the Obama campaign. Hughes built MyBarackObama.com, using the social tools he learned at Zuckerberg’s side, to recruit and deploy thousands of supporters, as well as fundraise millions of dollars. Asked about it at the time, Obama said, “there’s no more powerful tool for grassroots organizing than the Internet.”

Meanwhile, Zuckerberg was turning Facebook into a global behemoth and transforming himself, despite his professed lack of interest in politics, into a person with considerable political clout. By 2011, with Facebook at more than 750 million users, Zuckerberg was dining with President Obama and other Silicon Valley leaders decades his senior, and hosting a convivial mock town hall with Obama at Facebook’s California headquarters. In 2013, Zuckerberg’s eye began turning more intentionally toward politics and policy. He launched Fwd.us, a pro-immigration group, and installed Green as its head. Zuckerberg’s name was known all over the world, and his star was ascendant.

Buttigieg, meanwhile, had a less eye-catching trajectory. In 2010, he had run for Indiana state treasurer and lost, though the next year he rebounded to win a race for mayor of his hometown—a humble city of a little over 100,000 people. He began building a reputation a forward-looking politician dedicated to creatively repurposing his Rust Belt city. One source of inspiration: Facebook. In a TED talk at Notre Dame during his first term, Buttigieg cited the site as an example of turning something old—a student directory—into something innovative. (Zuckerberg, he said, was “just a guy in the next dorm over from mine, a guy who now has a lot more money than I do.”) Buttigieg won reelection in 2015, and two years later he launched a long-shot bid to head the Democratic National Committee, a party organization still rocked by Donald Trump’s once-unthinkable presidential victory.

By late February, it was clear that Buttigieg wasn’t going to win the DNC race, and so he dropped out. Then Zuckerberg himself came calling.

For years, Zuckerberg had dedicated himself to annual challenges. One year, it was learning Mandarin. Another, eating only meat from animals he had personally killed and butchered.

At the start of 2017, Zuckerberg declared that he intended to meet that year with people from all 50 U.S. states. No more virtual connection, he would do it in person … sort of like a politician. Immediately, the pledge raised speculation that Zuckerberg was laying the groundwork for a national campaign of his own. Those close to Zuckerberg insisted that wasn’t the case; concern over so-called fake news on Facebook its role in swaying the 2016 presidential election was growing into anger, and Zuckerberg was trying to come to terms with the social and political impact of the site he’d always approached with the cool detachment of an engineer.

Zuckerberg said as much. “After a tumultuous last year, my hope for this challenge is to get out and talk to more people about how they're living, working and thinking about the future,” he wrote in a blog post announcing the project. Zuckerberg went on to say that, in his judgment, the forces of technology and globalization have “contributed to a greater sense of division than I have ever felt in my lifetime,” and “we need to find a way to change the game so it works for everyone.”

Zuckerberg started his year of travel in Texas, where he met with local police in Dallas, went to the rodeo in Fort Worth, and ate with community leaders in Waxahachie. During a later, Southern tour, he visited a shrimp boat in Alabama, walked a Civil War battlefield in Mississippi, and took in New Orleans’ Ninth Ward. He visited a South Carolina church that had been terrorized by a mass shooting and drove NASCAR in North Carolina. As winter turned to spring, Zuckerberg’s team was eyeing a Midwest swing, and Indiana was still on his to-be-visited list. It was then that Zuckerberg got in touch with Buttigieg, albeit through Green, who had turned into a liaison for Zuckerberg to the political world. Buttigieg, Green discovered, may have been an admirer of Zuckerberg, but that didn’t necessarily mean he was some kind of super-user. “I don’t think he was the most active social-media person,” Green says.

During the Saturday visit, Buttigieg drove, and Zuckerberg rode shotgun in the mayor’s Jeep, with the Facebook CEO attempting, with some trouble, to provide real-time video of their travels using Facebook Live. (Live commentators asked why it looked like Buttigieg was on the right side of the car; Zuckerberg, looking a bit chastened, explained that Facebook Live flips its feed.) Buttigieg was the star, with Zuckerberg teeing up questions like, “Pete, do you want to just give a bit of your background, and how you came to be mayor here?”

They hit a community-run coffee shop and a juvenile justice center, toured some of Buttigieg’s “smart streets” project sites, and drove by the city’s old Studebaker factory. They lunched at Simeri’s Old Town Tap, where the pair enjoyed the $3.95 bowl of “Famous Hungarian Goulash,” a server at the bar told me. Zuckerberg was gone by evening, off to have dinner with firefighters in the nearby town of Elkhart.

Buttigieg tweeted out a link to a local news story on Zuckerberg’s visit, commenting, “You know, another day in South Bend…”

That visit seems almost quaint now.

Not long afterward, anger at Facebook would bubble over, with Zuckerberg personally coming under fire for the idea that he looked the other way while Russian actors used his social network to corrupt the 2016 election. That controversy fed others, and the outrage directed at the company in political circles has only grown in the years since. Trump and others on the right routinely accuse Facebook of being in the tank for liberals—seemingly as a way of keeping the company on its toes. Meanwhile, many on the left have developed real ire toward Facebook over its policy of allowing misleading political ads and posts on its site, which they view as kowtowing to Trump.

That was the context in which the news came in October that Zuckerberg and his wife, the pediatrician and philanthropist Priscilla Chan, had recommended two staffers to the Buttigieg campaign. All involved sought to downplay the situation. On a press call shortly afterward, Zuckerberg said it would be a mistake to take it as some sort of endorsement, saying, “this probably should not be misconstrued as if I’m, like, deeply involved in trying to support their campaign or something like that.”

Sean Savett, the Buttigieg campaign spokesman, said Zuckerberg and Chan reached out to the campaign to recommend the staffers—one a data scientist from Facebook, one an Indiana native from their Chan-Zuckerberg Initiative—after they expressed interest in working for Buttigieg. “That’s a pretty standard thing—you know, if you want to work for a campaign, you try to use all of the levers and networks that are possible.”

“A lot of people were like, ‘Oh my god, Mark and [Priscilla] are doing HR for the campaign,’” says Savett. “He sent a recommendation email, and his wife sent a recommendation email for two people they knew who were applying, like pretty much any former boss would if you were on good terms,” Savett says. “And they didn’t even reach out to Pete for that. They reached out to one of Pete’s aides,” campaign manager Mike Schmul, who Zuckerberg had met on his South Bend visit.

But Facebook, by that point, had become politically toxic in some quarters, and Zuckerberg’s dabbling in politics had become fraught.

Even some of those once closest to the company have turned on it.

Facebook made Chris Hughes rich, with his net worth reportedly nearing a half-billion dollars. But today he’s one of the company’s harshest critics, calling for the company to be broken up. In an op-ed in May of 2019, Hughes said that since the last time he’d seen Zuckerberg, in the summer of 2017, “Mark’s personal reputation and the reputation of Facebook have taken a nose-dive,” and that while he hadn’t worked there for a decade, “I feel a sense of anger and responsibility.”

Buttigieg has drawn considerable support from Silicon Valley, with some in that engineer-soaked ecosystem seeing in him a like-minded solutions-oriented and long-term thinker, an appealing blend of technocrat and optimist who sees no problem that can’t be carefully parsed. It doesn’t hurt that, at 38, Buttigieg is the contemporary of many of the tech industry’s most prominent leaders—sandwiched, for example, between the 35-year-old Zuckerberg and 43-year-old Twitter CEO Jack Dorsey. His national finance chair is a prominent figure in Silicon Valley: Swati Mylavarapu, a venture capitalist who, with her husband, Nest co-founder Matt Rogers, runs the VC firm Incite. Netflix CEO Reed Hastings has hosted a fundraiser for Buttigieg, and his high-profile donors include famed investor Ron Conway, Y Combinator’s Sam Altman, and Lowercase Capital’s Chris Sacca.

Today, Buttigieg is, says his campaign, closer both personally and ideologically to Hughes than he is to Zuckerberg. “Pete and Chris speak every few months,” Savett, the campaign spokesman, says. “Pete believes Chris has made a really compelling case about the concentration of power and that he’s made compelling arguments on a number of different issues, including the future of tech.”

Buttigieg hasn’t called for the company to be broken up; of the major Democratic candidates, only Elizabeth Warren and Bernie Sanders have gone that far—with others in the field calling it distinctly Trump-like to dictate to federal agencies, even hypothetically, specific companies to target. But Buttigieg has grown harsher and harsher about the company as time goes on.

Last February, Buttigieg, still a long-shot candidate, spoke of Facebook and Zuckerberg as a problem fixable with a smart policy tweak. Both, said Buttigieg, were “well-intentioned” but still reckoning with the consequences of their roles in the world. “I think they realized that there’s gotta be some kind of policy response, because what they do is increasingly a matter of policy. I mean, in many ways corporate policies of Google, Facebook, and the others are public policy. And I think they take that seriously, I’m sure he does.”

But some 11 months later, with Buttigieg rising dramatically in the polls—and amid Facebook unveiling a series of controversial policy decisions on how to approach the 2020 election—Buttigieg grew much harsher. Just because he knew Zuckerberg, the candidate said, “doesn’t mean we agree on a lot of things,” Buttigieg said in an interview with the New York Times editorial board. Buttigieg had once praised social media for helping to introduce him to his husband, Chasten; Hinge, the dating app they used to meet each other, at the time used Facebook’s network of social connections. Now he was calling into question Facebook’s entire ad-based business model.

Said Buttigieg of Zuckerberg, “no one should have that kind of power.”