April 2, 2020

Who’s Zoomin’ Who

It’s usually the case in Washington that with new prominence comes new scrutiny, and America’s massive sudden shift to telework is no exception. Our new work habits have taken Zoom from a relatively obscure videoconferencing platform to a seemingly indispensable part of daily work and life. But the company’s meteoric rise – Zoom announced Wednesday it had 200 million daily active users in March, compared to just 10 million last December – has also drawn a close eye from policymakers concerned about the platform’s privacy and security protocols. Both Sen. Richard Blumenthal (D-Conn.) and New York Attorney General Leticia James have sent missives to the company this week seeking more information about privacy practices. They cited reports that up until last week the company sent data about users to Facebook – even if those users didn’t have a Facebook account. In response, Zoom said Thursday that it was halting development on new product features and directing all of its engineers shore up the platform’s security and safety systems. “We recognize that we have fallen short of the community’s – and our own – privacy and security expectations,” Zoom CEO Eric Yuan said in a blog post Thursday.

Could COVID-19 Result In A Global Health Marshall Plan?

Foreign aid has always been an easy political target and fairly unpopular with Americans, but COVID-19 could be a seismic game-changer for the public’s perception of the merits for spending on health programs overseas. The outbreak has the potential to make infectious disease and pandemics rank as a transnational threat on par at the very least with terrorism and “great power” competition with China and Russia. That could fuel a surge in global health spending, in much the same way 9/11 spurred greater funding for global programs focused on extreme poverty and other perceived “root causes” of extremism and terrorist recruitment. Bipartisan support for massive foreign aid also saw a boost after World War II amid fear of “communism on the march” and the “domino effect” of the Soviet Union and Marxist-Leninism, with funds to Europe and Asia through the Marshall Plan and Bretton Woods. In a similar way, the fear of another pandemic has the potential to provide the bipartisan will for the creation of a transformative global health Marshall Plan.

How $454 Billion in Loans Translates into Trillions

As part of the recently passed coronavirus relief package, Congress approved nearly half a trillion dollars for loans and investments to businesses, states and municipalities. These investments could include small business lending, purchasing municipal debt and increasing liquidity in key markets. Policymakers believe the initial $454 billion will translate into $4 trillion in lending. That’s because while Treasury will oversee the program, the Federal Reserve will create the lending facilities for loan and investment support, and the Fed can leverage funding on more than a dollar-for-dollar basis. That means a $10 billion funding guarantee from Treasury can yield $100 billion in lending from the Fed. The program is still being set up, and Fed watchers are hopeful it can be launched soon to help inject more money into the economy. any are wondering whether the Fed allows companies with a currently strong balance sheet get access to capital, such as big retailers. Many large U.S. companies may be not meet the Fed’s lending standards as narrowly defined, so they will need to get creative to provide support to important companies and sectors.

Most Americans Adapting to New Normal

A new Axios/Ipsos index tracking poll measuring the emotional well-being of Americans who are self-quarantining shows they are adjusting to these unprecedented challenges. The research finds 53% of Americans report they are quarantining. Slightly fewer of those Americans report worsening mental health compared to last week (30% vs 35% last week). That suggests they may have moved past the initial shock of the virus’ impact on their daily life and are adjusting to a new normal. The number who report decreasing emotional well-being has also dipped since last week (37% from 43%). Meanwhile, a Politico poll reveals the initial approval bump the Trump administration received at the onset of the coronavirus outbreak has flattened as the virus’ effects have spread. Almost half (47%) of voters feel the administration is not doing enough in response to the outbreak, versus the 40% who feel the administration has been responding appropriately. Americans are expressing more confidence in local leaders: Almost two-thirds of voters (63%) say their state’s governor has done an excellent or good job handling the crisis. We’re still several months out from the election, but if these trends continue, they could have an impact at the ballot box.

Small Businesses Are the Big Idea

COVID-19 is no exception to partisanship. When members of Congress tweet about the virus, they’ve been largely focused on the action (or inaction) of the federal government, as well as the impact on small businesses. Democratic conversation has been driven largely by Rep. Maxine Waters (D-CA) and her criticism of President Trump, while Republicans have aimed fire specifically at Speaker Pelosi (D-CA). One faint glimpse of bipartisanship? Both parties seem united on wanting to help small businesses. For example, multiple members from both parties shared this tweet from the U.S. Small Business Administration on guidance and loan resources. Could this hint to what might be in store in the next stimulus bill? We’ll be watching.