Cheesecake says no
The stimulus, the math, the reportedly hidden $170 billion tax cut, the rent that won't get paid, the ventilators, and 7 other things worth your time.
A record 3.3 million people filed for unemployment last week (by far the largest number ever). Meanwhile, the Senate passed a $2 trillion stimulus/bailout bill.
The House is expected to pass it shortly—although a single Republican member of Congress who objects to the price tag might be using a procedural hold to delay it a few days.
President Trump called him out without naming him, saying you “might have one grandstander” who could delay the bill.
Personally—not that I’m anyone, except “the guy writing this newsletter,”—I think it has to pass because the economy is going to need a cash injection, fast.
But, I do give the holdout, Rep. Thomas Massie of Kentucky, credit for pointing out some simple math that I don’t think anybody else is doing.
Namely, that $2 trillion divided by the population of the United States is about $6,116 for every man, woman and child. On a household basis, it works out to $15,625 per family.
Put that against the actual payouts for good old fashioned taxpayers:
A cap of about $1,200 per adult at most, with a phaseout beginning at $75,000 a year based on 2018 income, and an additional $500 per child allowance.
A maximum of $3,900 for a hypothetical family of five, assuming they got by with less than $75,000 in 2018.
Will people will start wondering where the rest of their roughly $12,000 or more per family is going?
One place I read about last night: a tax cut that could be worth $170 billion over 10 years, targeted at the wealthiest real estate investors in America—and reportedly hidden in the 880-page Senate bill (that nobody had time to read before voting on).
Next up, Cheesecake Factory, with 294 restaurants, which informed all of its landlords last week that it won’t be making any April rent payments:
“The severe decrease in restaurant traffic has severely decreased our cash flow and inflicted a tremendous financial blow to our business,” the company’s CEO wrote.
That story got a lot of play over the last 24 hours or so. I think it’s because it’s a sizable chunk of commercial rent.
But, it’s also because ordinary Americans get it when you talk about paying rent (or mortgages) in a way that other financial and monetary things don’t resonate—because ordinary Americans pay rent, too.
So, if an $866 million publicly restaurant chain can just announce its not going to pay what it owes…
Eater @EaterThe Cheesecake Factory tells landlords it will not be paying rents on April 1 https://t.co/AHjWusegPa https://t.co/XlAevQxwWm
I know there’s some levity here, or maybe gallows humor — because it’s the Cheesecake Factory, which is the butt of a lot of jokes to begin with.
But if people can’t eat in restaurants, then restaurants make less money, and waitstaff get laid off.
And, if some restaurants say they can’t pay their rent, and workers soon can’t pay their bills either, then the landlords who were counting on the money, and at some point their mortgages don’t get paid, and so on.
My daily thing about ventilator production
President Trump did an interview on Hannity last night in which he took issue with the very idea that U.S. hospitals are as short on ventilators as they claim. Earlier, he reiterated that he has no intention of using the Defense Production Act to acquire more.
I didn’t start this newsletter to have a daily fixation on one issue, but I live here in the metro New York City area, and I keep hearing that the ventilator shortage could be the difference between life and death for many, many people.
I truly hope I’m wrong.
Also, a clarification. Yesterday, I highlighted a story about how Dyson, in the UK, got a UK government grant, developed a prototype ventilator in 10 days, and hoped to ship 15,000 new vents within weeks.
Either I made a mistake and just didn’t realize it, or it was edited afterward. I don’t know. Anyway, it’s clear to me that “within weeks” is the goal, although it’s hard to say whether that will turn out to be realistic or not.
Other UK companies, like Gtech, are also now reportedly hoping to “spin up production [of ventilators] of around 100 per day within a week or two…” (TechCrunch).
More than ever I feel like it’s important to take the blame if I mess up, and explain if I think it’s more nuanced. I wanted to make sure I acknowledged the issue.
7 … make that 8 … other things worth your time
It’s almost all COVID-19 again. Such is our world.
The United States is now the world epicenter of COVID-19, with more cases than China or Italy. (CBS News)
The U.S. military will no longer report its COVID-19 data in the same detail, so as not to tell adversaries how many personnel are infected. It seems the military will report total cases, but won’t identify what service or where they’re located. (Reuters)
WeWork is trying stay open — but not forgiving rent and offering employees $100 a day bonuses if they’ll show up. (CNBC)
A group of state attorneys general are calling on Jeff Bezos to expand paid sick leave policies for his employees at Amazon and Whole Foods in response to the coronavirus pandemic. (The Hill)
A giant popular backlash is brewing against the idea of foreign-flagged cruise lines being included in the bailout, but so far they are. (CNBC)
The Trump administration plans to assign a coronavirus risk level to all 3,007 counties in the United States—high, medium, or low—for state and local officials to use as a guide in deciding how strict restrictions have to be. (WSJ, $)
New Orleans is set to become the next coronavirus epicenter, with fewer cases but a faster rater of growth than New York. (Reuters)
Everything you need to know about the coronavirus stimulus checks. (CNBC)
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