Cheques, imbalances: America’s fraught stimulus

Hello and welcome to The Intelligence on Economist Radio. I'm your host, Jason Palmer. Every weekday, we provide a fresh perspective on the events shaping your world. It was arguably one of the world's first breaking news stories, a shootout in 1911 between London's police and gangsters captured by newfangled newsreel cameras. We look back on the Sidney Street Siege and how it still resonates today. And for centuries, the color black has tested artists' ingenuity as it hinted at the underworld, the darkness of evil. We examine the latest artistic use of the color in the form of a new, unfathomably absorbing material. There is truly None More Black. But first— America's House of Representatives passed another version of a stimulus bill yesterday, this one promising $2,000 checks to the majority of Americans.

This would make a difference in the lives of Americans who are facing the greatest uncertainty that they've experienced, for many of them, in their lifetime.

It's unclear if the measure will pass in the Senate, making it yet another twist in a last-minute saga to provide economic assistance to millions of struggling American workers and businesses. The original $2.3 trillion spending package included $900 billion for pandemic relief in addition to funding the federal government for the next year. It was hastily negotiated in the run-up to Christmas by a bipartisan group including President Trump's Treasury Secretary, Steve Mnuchin, But after it was passed by the House and the Senate, Mr. Trump criticized the bill, saying it didn't do enough to help ordinary Americans.

It really is a disgrace.

For example, among the more than 5,000 pages in this bill—

In the end, he didn't make good on his threat to veto the legislation on Sunday. But he demanded another congressional vote on increasing the value of the stimulus checks, a measure supported by many more Democrats than Republicans.

I worry that this whopping $463 billion won't do what's needed, stimulate the economy or get the jobless back to work.

Whatever the outcome, the relief couldn't be more needed. The government has been deadlocked on the matter for months. And in just over 3 weeks, it'll be President Joe Biden who inherits the budget, the stimulus plans, and the problems brought about by all the foot-dragging.

Congress rarely compromises these days.

Idris Khaloun is The Economist's Washington correspondent.

And it was, you know, truly a compromise measure that will do some good, I think, for the American people.

So what's in the bill that's actually been passed by both houses and signed by President Trump?

The new stimulus bill that President Trump signed into law includes a couple of important provisions, one of which is another round of direct checks that will go to Americans. These are going to be half as big as the ones that were passed in March. So these will be $600 per person as opposed to $1,200. And there's also going to be a new federal top-up in unemployment benefits. Most Americans have been getting $600 a week until those benefits expired back in August. The new benefits are going to last for 11 weeks and they will be about $300 per week. And there's a few other things. It's a very long bill. It's 5,600 pages almost that was negotiated very much at the last minute. Among the more important parts are another $300 billion or so, which are going to be allocated for the Payment Protection Program, which subsidizes businesses to make sure that they don't have to fire people.

And why is it that President Trump had such a hard time signing it? Why the delay?

That's an interesting question. Depends on how generous you want to be to the president. Many people pointed out the seeming lack of logic about refusing to sign a bill that had been negotiated with his administration. Nancy Pelosi had been negotiating with Steve Mnuchin, the Treasury Secretary, about the contours of the bill. And this compromise was forged with Mitch McConnell, the Republican leader in the Senate. There had been little indication before the bill was actually passed that Donald Trump had much of an objection to it. Once it came to his desk, he thought that the bill was pathetic and that it needed to have a much more generous per-person check. But ultimately, Donald Trump decided not to hold up the bill.

And this is a relief package that Americans have really been waiting some time for.

Yeah, absolutely. The initial CARES Act was a huge injection of stimulus, but it was passed all the way back in March and a lot of the major provisions of the CARES Act expired back in August. And interestingly, because, you know, that was a more than $2 trillion bill, what you saw in the first months of the pandemic was actually pretty solid progress against poverty in America. You saw a 25% reduction from its pre-pandemic levels. And what you've seen since the expiration of those benefits is a very fast resurgence. So all of those gains in poverty reduction have been erased at this point. And if you look at other indicators of hardship, whether it's the share of families who say that they can't afford food, 13% of American families right now are saying that they have not had enough to eat in the last week from the latest Census Bureau polls. You see 30% of Americans who are renting say that they have little to no confidence that they will be able to pay next month's rent. And those measures that we've been tracking have gone up significantly in the past couple of months.

And put this into some context. How does this, this relief package on the whole compare with similar ones offered by other countries, Britain, Germany, and so on?

So at this point, America will have done over $3 trillion of direct stimulus. And if you compare America to other countries on the basis of how much money does it immediately inject into the economy, America looks fairly outstanding. Where America doesn't look as generous on the stimulus front is on its guarantee of liabilities made with businesses. So European countries are much more likely to guarantee loans, use the central bank much more than America has used the Fed as part of their strategy for addressing stimulus. So depending on whether or not you think direct relief to Americans is more important, you could say that America has done really well. If you think that subsidizing businesses and making sure that they stay open is the vital point of COVID relief, then you could say that the Europeans have done better.

But another facet of this was that the bill apparently contains, well, what President Trump called pork, but a lot of provisions that aren't sort of directly related in that way.

It does, and that's in part because it was attached to the bill that keeps the government open and funded for the next year. And that obviously has a lot of unrelated provisions because it is the bill that funds the entire federal government. You know, there are measures on a Teddy Roosevelt presidential library, independent commission to oversee horse racing. Those kinds of things have been snuck in, but also some provisions that might not have been obviously related to COVID but that are probably good, like an end to the practice of surprise billing, which is basically where you go to a hospital that's in your insurance network, you're treated by a doctor who is affiliated with a different network and you get a very large bill.

And all of this is happening, of course, in the twilight of Mr. Trump's presidency. Where does this leave Joe Biden as he starts to come in?

This really sets the initial conditions for Joe Biden's presidency. A lot of the unemployment benefits, for example, will expire in mid-March, which will mean that there will need to be some period of renegotiation. We saw Chuck Schumer, who is the Democratic leader in the Senate, say that the bill will only partially cover some of the depths that Americans are in right now economically.

Unfortunately, the troubles are so deep, the abyss is so long that we need more. And this is just a first step. This is an emergency. We need a second bill to continue.

So that's going to set up a new challenge for them in the opening days of the administration when Biden would probably rather try and pursue a big legislative victory like infrastructure or something else. A lot of it is going to turn on what happens in the upcoming Senate races in Georgia. The runoffs will decide the last 2 seats in the Senate, and that will determine whether or not Democrats or Republicans control it. If Republicans keep those seats and Democrats don't have control over the Senate, I think it's probably quite likely that this is the last big stimulus measure that Americans are going to see.

Idris, thank you very much for your time.

Thanks so much for having me.

For lots more analysis like this from our international network of correspondents, take out a subscription to The Economist. Get a great introductory deal at economist.com/intelligenceoffer. The link is in the show notes.

The siege of Sidney Street was a pyrotechnic shootout between police and anarchists that sparked headlines and manhunts around the world.

Andrew Miller is The Economist's culture editor. He paid a visit to the site of the siege in London's East End, where an epic gun battle between police and criminals broke out in 1911 after a robbery went wrong. Some of the issues and players that the conflict brought to the fore are still relevant today.

The siege was captured on early newsreels. It's regarded as one of the first breaking news stories in history. This episode paired Winston Churchill with another figure destined in his own way to become a legend, a shadowy revolutionary known as Peter the Painter, once notorious yet so elusive that people came to doubt whether he ever really existed. The Marlène Road is in the heart of the East End. A part of London which for centuries has been home to immigrants from around the world seeking better lives. These days there's a big community from the Indian subcontinent, but 100 years ago this area was full of refugees from Eastern Europe, and among them was a penumbra of spies and anarchist revolutionaries. Oh, just a gambler, we used to gamble for a knuckle bill, went to keep the bucket and he left me in his will. The other night I saw the story begins in what is now Devonshire Square on the edge of the City of London. There, there's a plaque honouring 3 police officers who were slain in the line of duty in December 1910. Their killers included veterans of prison breaks and guerrilla warfare in today's Latvia, victims of Tsarist torture who expected the same treatment if they were caught again in London. They lived in a milieu of radical ideas and exiles which would included a few years earlier Lenin, Stalin, and Trotsky. These men and some women were part of a radical anarchist group, and to fund their operations and to support their comrades back home, they planned what they called expropriations, otherwise known as robberies. And on the 16th of December 1910, their target was a jeweller's in Houndsditch. They began breaking in, but reports of suspicious noises attracted a policeman, then several, all of them unarmed. The 3 men were shot and 2 officers were wounded when the criminals opened fire in what at the time was the worst ever peacetime loss for British police. One of the robbers, George Gardstein, was hit in the melee. He was found dead the next day by police. They posted a reward for the alleged kingpins, and among the people they were looking for was a man who went by the name Peter the Painter. In these posters, a handsome man poses for an elegant studio portrait. Some said he painted houses, some said he painted portraits, so the question immediately arises: is he an artist, or is he just a regular working man? Or is he an ordinary person on the outside but a superstar underneath? Peter would soon enter the folklore of London, a bit like gangsters who came along a few generations later, straddling the border between felon and icon. To some people, he was an out-and-out villain, and to others, his revolutionary allure was intoxicating. It wasn't long before, on New Year's Day 1911, an acquaintance tipped off police that the people they were looking for were hiding at 100 Sidney Street. Two days later, Peter the Painter, the idea at least if not the man himself, collided with Churchill and his own carefully cultivated image. Winston Churchill at the time was Home Secretary in Britain's Liberal government. He was in the bath when he heard about the siege unfolding. He immediately got dressed and hurried to the Home Office, and then he couldn't resist going along to the scene himself to have a look. The standoff that ensued involved a staggering level of violence for the heart of what was then the biggest city in the world. The police quickly saw that they were outgunned by the anarchists, inside 100 Sidney Street. There were more of the police, of course, but the anarchists had much better weapons, and they decided they needed to summon a detachment of Scots Guards from the Tower of London in order to help them in the fight. If you look at the newsreel footage, it's really an amazing scene. The soldiers march in with their rifles, horses bring up artillery, which thankfully was never used. Enormous crowds gather. The police had to spend most of their time restraining the thousands of people who poured into the streets of the East End hoping to get a glimpse of this amazing spectacle. The police and the anarchists traded gunshots for hours. It's amazing, really, the people inside 100 Sidney Street held out for as long as they did. But after many hours of this, a fire broke out in the house. Nobody's 100% sure why, and the house burnt to the ground. The roof collapsed. Churchill was there, and he insisted that the fire brigade be kept away from the house while it burned because he didn't think it was a good idea to risk the lives of brave British firemen to save the revolutionaries who were caught in the inferno. After the house collapsed, the firemen burst in. One of them sadly was hit by falling masonry and subsequently died, but they found two charred bodies identified as William Sokolov and Fritz Schwarz. But Peter the Painter was nowhere to be seen. All over the world, police forces thought they'd found him, and some of them offered to arrest and extradite him to Britain. But in fact, British detectives had quietly stopped looking for him, having decided there was insufficient evidence to convict him of any of these crimes. Rumour flourished about him, for example, that he'd been a police informer all along and had been spirited away by his handlers. Many people in London continued to believe that he'd been inside the burning house and had somehow escaped. Sidney Street was not regarded as a success for Churchill. He already had a reputation as something of a hothead. The fact that he'd rushed to the scene was considered yet another misjudgement that was remembered and held against him right up until he became Prime Minister. And then a strange thing happened, which was that his desire always to be at the scene of the action suddenly became a fantastic asset. And we think now of his visits to neighborhoods in London that had been hit by the Blitz, and the fact that he stayed in London during those perilous months helped to ensure his popularity and sense of solidarity throughout the war. So this trait, which had been exhibited at Sidney Street 3 decades earlier, all of a sudden, instead of being a liability, became one of the great strengths of his leadership. Whilst Peter the Painter, the man, may have vanished, he lived on in art. Alfred Hitchcock grew up near Sidney Street, and he adapted the siege in the finale of his film The Man Who Knew Too Much.

London, 1911.

There's another film called The Siege of Sidney Street in which Peter is a suave fanatic trailed by an undercover policeman Over the decades, the real Peter the Painter was subsumed by legend. Today, if you walk away from the site of the siege down Sidney Street, you come to another block of flats called, so a plaque on the outside wall explains, Painter House. Peter the Painter, the man with the elegant moustache in the wanted poster, Perhaps a villain, maybe an anti-hero, real or imaginary, lives on as a legend in the East End.

Colors mean different things in different places. White is the hue of death in India and some Slavic cultures, but it means spiritual rebirth for Muslims participating in the Hajj pilgrimage. Red signifies loyalty or success in China, but back in colonial New England, adultery. One color, though, has almost universal associations.

Black is the color of witchcraft. It's the color of the underworld, the far side of the moon.

Fioretta Rocco is The Economist's culture correspondent.

But it's also the color of dreaming and ambition, as in the color of the deepest ocean and the color of outer space, the places that humans always wanted to explore just because they were there. And so black is also a color of enticement. Historically, it's been very hard to make. The early artists in France's Lascaux caves, for example, used charcoal, as artists did all over the world. But it would wash away, it would become rather gray, and most other blacks, especially fabric dyes, really weren't blacks at all. They produced a sort of purpley gray, a brown at best, that faded with the passage of time. There were eventually solutions. In Europe, black ink from gallnuts on trees was the key to producing the first true black. Then you got black pigments from lampblack, from burnt ivory mixed with gum arabic or with linseed oil, and that made possible the black gloss that artists have come to love so much. You would find that artists used black because it was the color of fashion, It was the color of power. It was the color of a certain kind of forbidding presence. Velázquez and Zurbarán used black to paint forbidding men, these extraordinary costumes. In Spain in the 18th century, black really was a color of power. It was meant to project force. It's not just a palette, it also has a metaphorical presence, an artistic significance which became more and more important. Picasso, of course, used black to ask how God could possibly exist amid so much suffering. You see this particularly strongly in his black and white painting Guernica, which represented everything that was happening in Spain during the Spanish Civil War in the 1930s. Almost a whole century passed before you see the next great step about black. In 2015, the English-Indian painter Anish Kapoor bought the rights to a color called Vantablack. It's not paint so much, more a dense coating of light-trapping nanotubes. It was developed in a lab really with the idea that it might be useful in trying to hide satellites. And you can see why. As a black, it is extraordinarily black. It absorbs 99.9% of light and is the blackest black that's ever been made. I went on a visit to Anish Kapoor's studio and I saw some of the works that he had created using this Vantablack. You cannot tell what the work is. If it's painted on the floor in a circle, you don't know whether it's a carpet, you don't know whether it's a great big hole. You really literally can't see anything. And so this blackest black illuminates the endless scope there is for discovery in color in art. Van der Black is pushing us. What is something if you can't see it? If your eyes cannot make the judgment about what something looks like, then what is it? And it's black more than any other color in the palette that forces us to ask those eternal questions.

That's all for this episode of The Intelligence. If you like us, give us a rating on Apple Podcasts and see you back here tomorrow.