Thursday, April 2, 2020

Donald Trump and the Chamber of Horrors - why there are PPE shortages

Judd Legum ( reports on A deadly corporate lobbying campaign.

Across the country, states are facing acute shortages of the supplies they need to slow the mounting death toll from COVID–19. There are not enough ventilators, protective gear for health care workers, or COVID–19 tests. These items are desperately needed to save the critically ill, keep the medical system functioning, and identify the sick so that they don’t unwittingly spread the virus.

Trump has a powerful tool to compel private industry to produce what’s needed: the Defense Production Act. But, thus far, Trump has been extremely hesitant to use it.

On March 18, Trump invoked the Defense Production Act but said it was not necessary for him to actually use it.

Donald J. Trump
I only signed the Defense Production Act to combat the Chinese Virus should we need to invoke it in a worst case scenario in the future. Hopefully there will be no need, but we are all in this TOGETHER!

On March 24, FEMA Administrator Peter Gaynor announced that Trump would use the Defense Production Act to secure thousands of additional COVID–19 tests. The next day, Gaynor abruptly reversed course and said that using the Act was unnecessary.

On March 27, Trump finally deployed the Act “to require General Motors to accept, perform, and prioritize Federal contracts for ventilators.” But, more than a week before Trump issued his order, General Motors had already “put hundreds of workers on an urgent project to build breathing machines as hospitals and governors pleaded for more in response to the coronavirus pandemic.” So it is unclear if Trump’s actions will meaningfully increase the supply.

Trump has not used the Defense Production Act at all for COVID–19 tests or to accelerate the production of masks and other protective equipment for health care workers. Why? One reason is that the U.S. Chamber of Commerce (the Chamber), a lobbying group composed of major corporations, is lobbying Trump against invoking the law. The Chamber articulated its position in an issue brief:

A broad designation of industries under the [Defense Production] Act could easily backfire…Imposing new strictures on U.S. firms that require flexibility as they strive mightily to boost production in the cooperative spirit demanded by the present national emergency would be counterproductive. In these circumstances, an expansion of government regulation would be unhelpful and risky…Instead, government and industry need to continue to work closely together in a collaborative manner to devise specific responses to shortages for identified products.

According to the New York Times, the Chamber persuaded Trump’s son-in-law and top economic adviser that using the Defense Production Act was a bad idea.

The U.S. Chamber of Commerce and the heads of major corporations have lobbied the administration against using the act. They say the move could prove counterproductive, imposing red tape on companies precisely when they need flexibility to deal with closed borders and shuttered factories.

Mr. Trump and the director of his national economic council, Larry Kudlow, as well as Mr. Kushner, were persuaded by those arguments, administration officials said.

The approach advocated by the Chamber and accepted by the White House is not working. Critical shortages of key ventilators, protective equipment, and COVID–19 tests persist. The longer these shortages continue, the more people will die.

But the Chamber represents its members. They are the ones that pay dues that allow the organization to exist. If enough member companies spoke out against the Chamber’s lobbying, it would have to stop. Here are three companies that could make a difference by speaking out.

They are Google, Nike, and Capitol One. None of them responded to Legum’s inquiries. Shame on them.

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