“I Don’t Think the $2,000 Checks Make Much Sense”

This sordid tale started in December, a few days after Congress passed a bipartisan stimulus package that was awaiting Donald Trump’s signature. When Trump demanded Congress revise the legislation to boost direct payments from $600 to $2,000, House Democrats quickly called his bluff and passed a bill to increase the checks.

That’s when the media’s consent-manufacturing machine kicked into high gear.

Larry Summers, former treasury secretary and head of the National Economic Council, appeared on Bloomberg TV (billionaire Mike Bloomberg’s eponymous media company) and declared: “I don’t think the $2,000 checks make much sense.”

He added, “I’m not even sure I’m so enthusiastic about the $600 checks, and I think taking them to $2,000 would actually be a pretty serious mistake that would risk a temporary overheat.” (An “overheat” refers to the idea that the amount of money moving in the economy exceeds its capacity and can lead to inflation.)

Summers was reprising his destructive role limiting economic stimulus in the wake of the 2008 financial crisis, which delivered the weakest economic recovery in modern American history. But that context was never mentioned by any media outlets covering his new austerity edicts — instead, Bloomberg amplified his message, publishing another Summers op-ed in which he insisted that “there is no good economic argument for the $2,000 checks.”

Jeff Bezos’s newspaper quickly followed suit with an editorial headlined: “Why increasing the stimulus checks from $600 to $2,000 is a bad idea.” The Washington Post editorial claimed — without evidence — that the stimulus legislation “showered billions on people who suffered little or no lasting hardship from the pandemic.” The Post argued that targeting “modest” payments to the “hardest-hit, low-income segment of the population” would have made more sense.

As the Daily Poster reported at the time, these pundits supplied then Senate majority leader Mitch McConnell with the talking points he used as he refused to put the House’s $2,000 checks bill up for a vote.

But while the bill never moved in the Senate, Joe Biden and other top Democrats realized how popular the $2,000 checks proposal was and ran with it. Biden and Democrats continued to campaign on the $2,000 checks even after the $600 payments started going out with Trump’s name on them.

Almost immediately after Democratic Senate victories in Georgia were announced, Biden pivoted, explaining that $2,000 checks would actually be new $1,400 checks that, when combined with the $600 checks from the December stimulus, would add up to “a total of $2,000 in direct relief.”

Media Makes Study From Billionaire-Funded Think Tank Go Viral

Word parsing to reduce the checks, though, apparently wasn’t enough — now a second wave of propaganda has manufactured a debate over further reducing direct aid by limiting eligibility.

This new campaign kicked off on January 26, when the Washington Post boosted a study hastily thrown together by economists at a Harvard University think tank called Opportunity Insights. The operation happens to be funded by the family foundations of Mark Zuckerberg, Mike Bloomberg, and Bill Gates.

“Cutting off stimulus checks to Americans earning over $75,000 could be wise, new data suggests,” the Post headline read.

The one-page analysis from Opportunity Insights, based on consumer spending data, asserted that households making more than $78,000 per year will spend about $45 of the $600 checks authorized by Congress in December within a month of receiving them.

The economists recommended that stimulus checks be cut off for individuals earning more than $50,000 per year and couples earning more than $75,000 per year. By comparison, the first two COVID-19 stimulus checks of $1,200 and $600 were sent in full to individuals who made less than $75,000 per year or couples who made less than $150,000.

The suggested change wasn’t some minor tweak  — their suggestions could deny or reduce aid to nearly half of Americans, according to census data. While the pandemic has hit lower-income households particularly hard, that same census data shows that 45 percent of households earning between $50,000 and $150,000 have lost employment income since the pandemic started.

There’s another major problem with cutting people out this way: most Americans’ payments will go out based on their 2019 income, unless they file their 2020 tax returns early and the IRS processes their filings before sending out these checks once Congress passes them. Such means-testing could deny aid to millions of people whose lives were upended by the pandemic.

But elite media outlets jumped at the chance to limit aid.

“Biden’s Stimulus Risks Giving Money to People Who Won’t Spend It,” Bloomberg’s headline blared, citing the Opportunity Insights study.

The Washington Post editorial board opined that “targeting relief to the neediest — thus freeing up more resources for higher priorities such as vaccines and safe school reopenings — comports with progressivism, properly understood.”

The Post’s Catherine Rampell wrote her own column on the study, with the headline: “It’s not progressive to give money to the rich.”

Michael Bloomberg’s money manager, Steven Rattner — who a decade ago agreed to pay $10 million to settle claims he paid bribes to win state pension business — helped lead an absolutely shameless segment on Morning Joe based around the Opportunity Insights study, arguing it raises “significant questions about the size of the stimulus checks and who should get them for $450 billion that President Biden has proposed.”

Tellingly, these news outlets and pundits have expressed no similar outrage or concern about Democratic leaders concurrently pushing new tax deductions that could give 80 percent of their benefits to the richest 5 percent of the country, because hey, let the serfs eat SALT.

The media-distorted discourse has had its intended reverberations in the halls of power: last week, a group of Republican senators billed as moderates offered their own COVID-19 relief proposal with $1,000 checks that would start to phase out at $40,000 for individuals and $80,000 for married couples (apparently excluding struggling families from aid during a pandemic is now “moderate”).

At the same time, Biden suggested that he was open to negotiating the issue, and top White House economic advisers reportedly were concerned about the size of the stimulus and at what income level the stimulus checks would be phased out.

The Washington Post soon reported that the White House was considering starting to phase out payments for individuals making more than $50,000 or married couples making more than $100,000 — a change that could deny aid to forty million Americans.

“A Lie Can Travel Halfway Around the World”

There’s the old saying that “a lie can travel halfway around the world while the truth is still putting on its shoes.” In this situation, media elites moved a half-baked study all the way around Washington decision desks and roundtables while its key details were kept under wraps.

Indeed, while the Opportunity Insights story was cited in, among others, CBS News, Fox Business, CNBC, and Forbes, none of the coverage looked into details of the data being used by the group, probably because the technical appendix wasn’t added to the one-page study online until last Thursday, more than a week after the study started making headlines. And upon close inspection, that appendix undermines those headlines.

The study is supposed to show that higher-income households didn’t experience much of a spending boost from previous stimulus checks. But the study extrapolates household income from zip code–level income data that is at least a couple of years old, David Dayen at the American Prospect reported on Monday.

There are two problems with this, Dayen wrote: the income data that the study uses predates the pandemic, and using zip code–level income data doesn’t capture household income very well anyway because within zip codes there is a wide range of household incomes.

Moreover, former Federal Reserve and National Economic Council economist Claudia Sahm said Monday that the study, which is not peer-reviewed, contradicts the majority of peer-reviewed studies on the topic.

The income cutoffs promoted by Opportunity Insights are “at odds with over a decade of peer-reviewed research, including my own, and unsupported by the underlying data that they used for their analysis,” Sahm wrote in her newsletter. That research, Sahm wrote, shows that income is not a very good predictor of who will spend stimulus payments.

“[Raj Chetty’s] paper is an outlier in over a decade of research in which income is not a strong predictor of who will spend the checks,” she wrote. “Some studies show that lower-income families spend less of their checks, but no one has argued that high-income families spend next to nothing out of their checks, as Raj is suggesting. More commonly, across studies, it’s having little or nothing in your bank account — referred to as ‘low liquidity’ — that’s associated with more spending out of stimulus checks.”

Despite these obvious flaws, on Monday the New York Times gave the Opportunity Insights economists their own column to tout the study and their findings — not disclosing that New York Times writer David Leonhardt serves on Opportunity Insights’ advisory board and has been helping he-said-she-said the debate over the checks.

The economists wrote that their data provides politicians with the information they need to make informed decisions, and that lawmakers had shown an interest in their data on the stimulus checks.

“The Final Plan Will Look Different”

Some progressives in Congress seem to sense that the media-driven push to limit direct aid is gaslighting the Democratic Party into enraging millions of middle-class voters who were promised a check. Bernie Sanders, Ron Wyden, Jeff Merkley, and Georgia’s Jon Ossoff in the Senate have sounded the alarm about the effort to limit who receives the full stimulus checks, as have House progressives like Reps. Alexandria Ocasio-Cortez and Pramila Jayapal and lawmakers representing districts with higher costs of living.

The debate Democrats should be having is how much *more* we should be helping people this year, not how much less. https://t.co/AD8oP3SsEa

— Alexandria Ocasio-Cortez (@AOC) February 9, 2021

On Monday, Rep. Richie Neal and House Democratic leaders released their COVID-19 relief legislation, which would send $1,400 checks to individuals earning up to $75,000 and married couples earning up to $150,000.

As the Washington Post’s Jeff Stein noted Monday, “Still unclear what [the] Senate will do, of course.”

And yet, even as the Opportunity Insight study is being properly shamed, the message behind it still seems to be gaining momentum in the executive branch.

Treasury Secretary Janet Yellen said Sunday that she supported a $60,000 income threshold for individuals to receive stimulus checks.

Biden, meanwhile, has gone from unequivocally promising “immediate” $2,000 checks to having his press team offer up incomprehensible gibberish like this word salad from White House press secretary Jen Psaki:

Well, the President proposed the $1,400 checks to make — to — plus $600 is, of course, $2,000 — because he was — felt it was important and vital to get that direct relief to as many Americans as possible and target that relief to the Americans who need help the most. And that’s how his original plan and proposal was designed.

He’s also said, and I’ve said many times from here, that the final plan will look different from what the plan he proposed in his joint session address. It’s still working its way through Congress, and I don’t think a conclusion has been made yet on the exact level of targeting. And when it does, we’re happy to have a conversation about that.

Sensing an opportunity to trick Democrats into further abandoning their promises, Republican Sen. Rob Portman has now returned to the pundit who originally kicked off the effort to stop the checks: he touted Summers’s declarations as proof that the stimulus must be slashed, signal boosting a Wall Street Journal editorial echoing the argument.

The process had come full circle: a media-boosted pundit who manufactured the original fraudulent argument against survival checks had returned to center stage, having been injected again into the political conversation by a lawmaker wielding talking points provided by an elite news outlet.

The legislative details had changed, but the consent-manufacturing machine’s goal is the same: convincing us to cheer on politicians who block promised aid during a catastrophe.