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Good morning. The U.S. suffers its highest daily death toll since May. Biden introduces a pre-K plan. And a study finds that federal loans for small businesses saved many jobs.
In mid-April, something strange started happening in the U.S. economy: Smaller companies — those with fewer than 500 workers — started rehiring workers more quickly than larger companies. You can see the pattern in this chart:
During a typical crisis, large companies have important advantages, like more cash on hand and better digital operations. So why were smaller companies apparently faring better during the lockdowns this spring?
The answer, it appears, is government policy.
The economic-rescue plan that the federal government created in March included loans — from the Paycheck Protection Program, or P.P.P. — meant to reduce job losses, mostly at companies with fewer than 500 workers. If the companies maintained their employment levels, the government would ultimately forgive the loans.
In all, the P.P.P. saved between 1.5 million and 3.5 million jobs, according to a new study by researchers at M.I.T., the Federal Reserve and the ADP Research Institute.
The study adds to the mounting evidence about one kind of economic stimulus that seems to have worked especially well during the pandemic: direct subsidies to businesses, to keep people employed.
Countries that have enacted aggressive versions of those subsidies — like Germany, the Netherlands and New Zealand — have kept unemployment fairly low. Those programs have several advantages, allowing businesses to close for public health reasons without severing their relationship with their workers or leaving those workers without income.
The U.S. has instead taken a scattershot approach, with a combination of direct payments to families (including many who have not lost a job), unemployment benefits and the P.P.P. loans. Many companies that didn’t get loans — because the companies were too big or because the money was running out — have laid off workers. The U.S. unemployment rate last month was 11.1 percent, compared with 6.2 percent in Germany.
Business subsidies do have one major disadvantage, especially relative to unemployment benefits. The government can’t know precisely which companies would have held onto their workers even without help and, as a result, subsidizes some firms that don’t need it.
“This is very expensive,” David Autor, an M.I.T. professor and one of the economists who did the new study, told me. But, he added, “we got something for it.”
What’s next? The latest version of stimulus that the House of Representative passed includes an expansion of employment subsidies, but it may not be part of the final plan. The Senate has not yet passed a new version of stimulus.
Congressional leaders and Trump administration are now negotiating over what will be included in the final package, including unemployment benefits, a tax cut, aid to states, money for virus testing and more. The Times covers the latest developments here.
An economic cliff: The expansion of unemployment passed in March is set to expire next week, and economists believe its end is likely to damage the economy.
THREE MORE BIG STORIES
1. Another surge in virus deaths
More than 1,100 Americans died of the coronavirus yesterday, the highest daily total since late May. “It will probably, unfortunately, get worse before it gets better,” President Trump said at his first televised news conference on the virus in weeks. “Something I don’t like saying about things, but that’s the way it is.”
Trump also urged Americans to wear masks, a sharp departure from previous comments, when he suggested that masks were a political statement against him.
Wider spread: The C.D.C. said the number of cases in the U.S. could be anywhere from two to 13 times higher than the official count. The findings suggest that large numbers of people without symptoms have kept the virus circulating in their communities. Still, virtually no places are near achieving herd immunity, the level of exposure at which the virus would stop spreading.
An interview: “I spoke to Anthony Fauci. He says his inbox isn’t pretty,” Jennifer Senior, a Times Opinion columnist, writes.
2. Biden rolls out plan for caregivers
Joe Biden yesterday proposed a major investment in caregiving programs, including:
Public pre-K for 3- and 4-year-olds.
Better pay, health benefits and training for child care workers.
Eliminating Medicaid’s waiting list for care of the elderly.
Trump’s ads: The president’s campaign has recently spent $20 million on television ads offering a dark portrayal of Democratic-led cities and trying to tie them to Biden. It’s part of Trump’s emerging law-and-order campaign theme.
3. The U.S. vs. China
The diplomatic conflict between the U.S. and China continues to mount.
The Trump administration yesterday ordered China to close its diplomatic consulate in Houston. In the hours after the administration notified Chinese officials of the decision, smoke billowed from a courtyard inside the consulate as employees dumped what appeared to be documents into flaming barrels.
Here’s what else is happening
IDEA OF THE DAY: Extremist violence
The Anti-Defamation League counted 42 killings in the United States last year that were committed by political extremists. Of those 42, right-wing extremists committed 38.
That continued a pattern. Over the past decade, right-wing extremists have committed more than 75 percent of killings by extremists.
Another such killing took place this week, according to investigators in New Jersey. They say that Roy Den Hollander fatally shot Daniel Anderl, the 20-year-old son of Esther Salas, a federal judge, and wounded Salas’s husband. Den Hollander identified himself as part of an “anti-feminist” movement doing battle with a cabal of “feminazis.” His online screeds also included racist language.
Mark Pitcavage of the Anti-Defamation League points out that extremists on both ends of the political spectrum have committed violence over the years. On the left, the Weather Underground and some Black nationalist groups did so in the 1960s and ’70s, as did some animal-rights and environmental extremists in the 1990s. More recently, a left-wing gunman shot a Republican congressman and three other people at a baseball practice in 2017.
But that case has proved to be the exception in recent years.
Right-wing violence — by white supremacists, anti-abortion extremists and others — began to mount in the 1980s and ’90s. It began rising again around 2008, around the same time as the election of the first Black president, Pitcavage said.
“This should no longer come as a shock to anyone,” Jonathan Greenblatt, the A.D.L.’s chief executive, said earlier this year. “Lawmakers, law enforcement and the public need to recognize the grave and dangerous threat posed by violent white supremacy. We cannot begin to defeat this deadly form of hatred if we fail to even recognize it.”
Related: Twitter said last night that it had removed thousands of accounts that spread messages about the false right-wing conspiracy theory known as QAnon, saying their messages could lead to harm.
PLAY, WATCH, EAT, PITCH
It’s tomato season
You may not really need a recipe for a tomato sandwich. But this one from Melissa Clark, which calls for good bread and a few in-season heirloom tomatoes, turns a simple idea into something sublime.
A baseball season like no other
Regular-season baseball returns tomorrow, with two televised night games that will start a 60-game schedule for each team.
What should you expect? The unexpected. Over a normal, 162-game season, rationality asserts itself: The best teams tend to finish at the top, and players’ statistics usually settle in a normal range. But the 2020 season will be so short that we could see things we haven’t seen in a long time.
The Los Angeles Dodgers, with a powerhouse roster, could post the best winning percentage in a century — or finish below .500. The low-budget Tampa Bay Rays could win their first title. A batter could hit .400 for the first time since 1941. “Root for chaos,” the baseball writer Joe Sheehan suggests. “We have to go into this not just accepting that, but embracing it.”
A recommendation for fans: Sheehan writes a newsletter (which requires a subscription) that consistently provides some of my favorite baseball analysis.
In The Times: My colleague Tyler Kepner looks at the upside and downside of a shortened season for each of the 30 teams.
The age of the livestream
Just days after the country began shutting down, the neo-soul singer Erykah Badu streamed an interactive show from her Dallas home, complete with costume changes and multiple cameras. With a family to take care of and her crew’s jobs to protect, Badu initially charged fans $1 to watch. More than 100,000 have tuned in.
“I miss that synergy and energy between me and the audience,” Badu said of in-person concerts in an interview with The Times. “But I found a new way to express that, and it doesn’t take its place. It just evolved it to another place.”
Badu is building her own livestreaming company, while other artists have streamed performances through Instagram, media organizations and even retailers. In a package of articles, The Times looks at the livestreaming boom.