July 21, 2020

One of the day’s biggest stories came from Ohio, where the House speaker, Republican Larry Householder, and four other political operatives, were arrested by federal officials for racketeering. U.S. Attorney for the Southern District of Ohio David DeVillers said the case was “likely the largest bribery money laundering scheme ever perpetrated against the people of the state of Ohio.”

Householder and his accomplices allegedly accepted more than $60 million in exchange for a public bailout for an ailing company. The bailout was worth more than $1 billion.

Ohio Governor Mike DeWine (R) immediately demanded Householder resign. So did Ohio Republican Party Chairwoman Jane Timken, who tried to spread the blame by saying "Greed, lust for power, and disdain for ethical boundaries are not unique to any particular political party.”

Her words were, perhaps, unfortunate, because her description was one that many people would use for the president. That Trump is right now trying to argue that the Republican Party stands for “LAW & ORDER,” when a Republican leader in Ohio is arrested for a “pay-to-play” scheme is a coincidence that undercuts his message. ("This was pay-to-play,” said DeVillers in a news conference. “I use the term pay-to-play because that's the term they've used as alleged in the affidavit.”)

It was a moment that seemed to crystalize today’s politics: an elected official accepted a huge bribe in exchange for using taxpayer money to bail out a crony's failing business. It reminds me of the Teapot Dome scandal of 1922, when the Secretary of the Interior, Albert Fall, leased the oil production rights from naval oil reserves at Teapot Dome, Wyoming and Elk Hills, California to oil companies in exchange for large financial gifts. When the story came out, Fall became the first U.S. Cabinet official to go to prison.

The Teapot Dome scandal seemed to epitomize the administration of the president at the time, Warren G. Harding, although Harding himself was not implicated in that particular scandal. He had created an atmosphere in which the point of government was not to help ordinary Americans, but to see how much leaders could get out of it.

This same attitude is crippling today’s government as it tries to deal with the fallout from the coronavirus pandemic. Part of the reason that Trump and Republican leaders are hastening people back to work despite the spiking infections is that many Republican-led states do not have social welfare systems in place to support people through more weeks of lockdown, and Republican leaders do not want to develop them.

We are approaching a new crisis. At the end of July, the emergency unemployment benefits put into place in an early coronavirus bill will expire, leaving more than 20 million Americans unable to make ends meet and thus vulnerable to eviction, which would trigger another wrench in the already-ailing economy. At the same time, local and state governments, badly hit by falling tax revenues, will need to make cuts, as well, which will further stress the economy.

In May, Democrats used their majority in the House of Representatives to pass a $3 trillion spending package to provide another round of stimulus checks to individuals, give money to hospitals, and support state and local governments. Led by Republicans, the Senate refused to take the bill up.

Now, Senate Majority Leader Mitch McConnell is trying to write a Republican bill, but is running into the specific problem that Trump refuses to admit the coronavirus is a problem and the more general problem of a Republican ideology that opposes government funding for a basic social safety net.

Trump continues to maintain that the only reason we have so many coronavirus infections is because we are testing for them. He wants to block funding for the Centers for Disease Control and Prevention, as well as money for testing and contact tracing. At the same time, he wants a payroll tax cut to stimulate the economy, and funding in the bill for a new FBI building.

More generally, Republican senators are mortified at the spending involved in a bill that focuses not on shoring up businesses, but rather on supporting ordinary Americans. “What in the hell are we doing?” Senator Ted Cruz (R-TX) asked his colleagues. He warned that a large relief package would anger Republican voters in the November elections. Senator Tom Cotton (R-AR) disagreed about the means, but not the end. He told his colleagues that if the Republicans don’t do enough to save the economy, Democrats will win in November and put in place policies that will cost even more money. A rescue bill now could save money in the long run by keeping Republicans in power.

As they calculate, the national unemployment rate is over 11%. The unemployment rate in cities is closer to 20% as the coronavirus has shut down restaurants, theaters, gyms, and so on. And our vulnerability to Covid-19 increases. Almost 4 million Americans have been infected with coronavirus, and more than 140,000 have died of it.

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Notes:

https://www.cnn.com/2020/07/21/politics/larry-householder-ohio-speaker-arrested/index.html

https://talkingpointsmemo.com/news/fck-them-over-later-inside-the-massive-alleged-bribery-scheme-rocking-ohio

https://www.npr.org/2020/05/12/854707010/read-the-house-bill-calling-for-3-trillion-in-coronavirus-relief

https://www.washingtonpost.com/us-policy/2020/07/18/white-house-testing-budget-cdc-coronavirus/

https://www.washingtonpost.com/business/2020/07/21/coronavirus-trump-congress-stimulus/

https://www.cnbc.com/2020/07/21/some-big-cities-are-hitting-great-depression-unemployment-levels.html

Householder: https://www.cnn.com/2020/07/21/politics/larry-householder-ohio-speaker-arrested/index.html