Ruling elites speak. WSJ gives thumbs down to unemployment insurance

The Wall Street Journal published an editorial continuing to bemoan the fact unemployed American workers are receiving an additional $600 weekly during the Covid-19 Pandemic.

The problem is with the American economic system. American workers should be paid a living wage.  Many wage earners must take on two jobs to make ends meet; housing, health care, food and basic necessities. If America guaranteed a “living wage” to everyone the issue that the WSJ has turned on its head would not exist. The extra $600 weekly the currently unemployed are receiving simply raises their income to a sustainable level. It is not a disincentive to work. It is money required to exist at a subsistence level in America. The WSJ editorial is yet another example of its ruling elites , “Let them eat cake” philosophy.

Following is the WSJ Editorial – 4.22.2020

Paying Americans Not to Work

Four GOP Senators were right about the harm from rich UI benefits.

Much of the harm from the coronavirus is unavoidable, but it would be nice if politicians didn’t compound the damage by ignoring the laws of economics. The worst blunder so far on that score is the $600 increase in federal jobless benefits that is already undermining the economic recovery.

On Wednesday we ran an op-ed from Kurt Huffman, whose Portland, Ore., company helps chefs run and staff their restaurants. Because of the coronavirus, he had to lay off 700 people. But some restaurants have adapted with takeout and delivery, so he needs to hire some back.

Some extra unemployment insurance is necessary, but the rich extra compensation from the $2.2 trillion Cares Act is encouraging those employees to stay home. Mr. Huffman did the math in his op-ed: A starting wage for a line cook is about $640 a week. Oregon’s unemployment offers about $416 per week. But thanks to the $600 federal bonus, that same worker now collects $1,016. Why would anyone take a pay cut to go back to work?

We’re hearing similar stories from around the country as small business owners look to reopen on a tentative or partial basis. Employees say they’ll take the unemployment check for as long as they can make more money by not working. One internal Trump Administration analysis estimates that this work disincentive applies to millions of Americans.

unemployed II 4.22.2020.jpg

This does not mean these workers are lazy. Workers are making rational decisions based on the economic incentives the political class has created. And they are acting exactly as many people said was likely.

That includes Republican Senators Lindsey Graham (S.C.), Ben Sasse (Neb.), Tim Scott (S.C.,) and Rick Scott (Fla.), who bravely spoke up when they saw the final language of the relief bill that was negotiated by other GOP Senators. Perhaps because they represent states with thousands of small businesses, they understood the incentive issues better than others who think every American business operates like Exxon and Apple.

The Senators were attacked in the media, and House Speaker Nancy Pelosi called them “cruel.” But they turned out to be right. This means that no matter when governors announce their states’ reopenings, many businesses will still have to wait until July 31—when the extra $600 expires—to be able to afford the workers they need to reopen.

The question now is whether the Trump Administration will learn from its negotiating mistake. Democrats will try to extend the $600 for another few months, and then a few more after that, as they describe anyone who disagrees as heartless. Republicans who cower at that argument without fighting back will hurt their own electoral prospects as the jobless rate will stay higher for longer and the recovery will take that much longer to take hold.

The Democratic 2020 campaign strategy is to blame Republicans for the health and economic damage from the virus. Republicans need to be able to point to an economy that is growing again by the autumn, and that means not giving Americans an incentive not to work.

 

 

Dog and owner reunited after 4 months. Stolen pet found 370 miles from home

Woof Woof!!!

In the time of Covid-19 there is the rare good news story to bark about.

 Here you are.

San Francisco Chronicle 4.21.2020

San Francisco police have arrested a 27-year-old Palmdale (370 miles south of The City) man in the theft of a dog outside a Bernal Heights grocery store last December, police said Tuesday.

Police said the arrest was “the direct result of dogged work by investigators” from the SFPD and the Los Angeles County Sheriff’s Office.

Dog found II 4.21.2020

The dog’s owner, Emilie Talermo, learned Monday that Jackson, a blue-eyed mini Australian shepherd, had been left at a shelter in Los Angeles County. Shelter staff scanned and detected a microchip, and the dog and owner were reunited Tuesday morning.

A representative from the SFPD picked the dog up in Santa Monica and drove him back to San Francisco, arriving early Tuesday morning. A video provided by SFPD showed Jackson barking happily and licking Talermo’s face as the two were reunited.

Last Friday, police said, they arrested Nicholas Bravo, 27, of Palmdale, on suspicion of felony grand theft in Jackson’s disappearance. Bravo was already in custody at the San Joaquin County Jail on unrelated charges and was cited to appear in San Francisco Superior Court this summer, police said.

Police did not say who had the dog or who dropped him off at the shelter.

Talermo’s search for Jackson included starting a website called “Bring Jackson Home” and hiring a plane to fly a banner over San Francisco after he disappeared last December. She offered a $7,000 reward for the dog’s return and said Monday the community had rallied to help her get the word out across the state.

On Monday, Talermo, 31, said she received a call saying the 6-year-old Jackson had been delivered to Los Angeles County Animal Care and Control. She said she’d “busted into tears” after the shelter sent her pictures to confirm Jackson’s identity and that friends in the area had retrieved him

“To watch or not to watch. That is the question.”

I just found this on http://www.tomdispatch.com which describes itself as an antidote to the mainstream media.

Personally, I have not watched even one minute of the Huckster’s daily nonsense hour in the time of the Corornavirus.  And I have no intention of doing so.  Still, the following makes for interesting, entertaining and sobering reading.

“On being addicted to Trump and his press conferences” is the title of the full article by Rebecca Gordon referenced below.

Tom Dispatch 4.21.2020

Fauci II 4.21.2020

Once upon a time, if you had predicted such a future for me, I would have thought you mad. No longer. How appropriate, then, that today TomDispatch regular Rebecca Gordon, facing the slings and arrows of outrageous press conferences, focuses on Hamlet’s famous query, modernized for the era of The Donald: to watch or not to watch, that is the question, and it’s one hard not to ask nightly in the Covid-19 era. Tom

He hosted 14 seasons of The Apprentice and its successor, The Celebrity Apprentice, and in all those years I probably spent seven minutes watching the show, or flipping past it as I looked for something else — and, as far as I was concerned, that was seven minutes too many. I don’t want you to think that I didn’t watch my share of junk on TV. I did. But a blowhard New York real-estate (self-)promoter whose most memorable line was “You’re fired!” judging the business skills of a group of sycophantic contestants? I preferred Law and Order reruns any day of the decade.

And here’s the thing: now, I get to watch the “You’re fired!” show (“nasty!”) whether I want to or not. In fact, just about the only thing Donald Trump has proven good at is firing people in his administration, which has a turnover rate the likes of which is surely historically unprecedented. In fact, the Brookings Institution estimates that 85% of his “A team” has turned over in these years, sometimes many times. After all, he’s had four chiefs of staff, five deputy chiefs of staff, five communications directors, four press secretaries, four national security advisors, at least six deputy national security advisors, three secretaries of defense (one “acting”), and so on.

Unfortunately, just about the only ones who haven’t been fired are the rest of us and, in our coronaviral moment, we have little choice (if we aren’t front-line workers) but to sit idly and watch, or force ourselves not to watch, you-know-who.

http://www.tomdispatch.com/

Snuffed Out: It was no HIGH TIMES on 4.20. San Francisco fails to light up

San Francisco is treating the Shelter in Place very seriously to the point of not passing those Joints around.

The City’s much ballyhooed annual 4.20 celebaration commemorating, now legal in California, marijuana was snuffed out by City Officials as a Health and Safety measure.

San Francisco seemed to take it in stride. Folks here figure there will be another time in another year to celebrate the Herb.

Anyway the citizenry can light up in the privacy of their Shelter in Place dwelling.

Top photo – Lee Heidhues 2019 4.20 Celebration

San Francisco Chronicle 4.20.2020

Adriana Sparkuhl approached the fence circling Hippie Hill in Golden Gate Park just before 4:20 p.m. Monday to capture the unusual scene on her phone: an empty meadow. Not a puff of smoke in the air. Park rangers cruising on four-wheelers and helicopters droning overhead.

“It’s official. Shut down,” the San Francisco resident said while filming the scene for her social media followers. “We’re at ground zero — we get to see it for ourselves.”

Like everything else, the unofficial 4/20 gathering of smokers, stoners and marijuana lovers in Golden Gate Park was hindered by the pandemic. City officials built a fence around Hippie Hill and Robin Williams Meadow where for many years thousands have congregated to smoke. Signs read: “CLOSED for COVID-19 (coronavirus) health precautions,” and police officers and park rangers patrolled the perimeter.

420 I 2020

People complied. Typical park activity — joggers, walkers and bikers wearing masks and breathing fresh air — replaced the usual party scene. Officers who had been there since morning, and planned to stay all day, said there were few problems.

Recognizing the potential for trouble, Mayor London Breed last week started warning people to stay away from San Francisco and stay home for 4/20. Police Chief William Scott echoed the same message.

“So far things are going really, really well,” Scott said during a news conference early Monday afternoon. “I’d like to thank everyone for that but remind everyone to please keep this momentum going. This is literally a matter of life or death, and I don’t think I’m being melodramatic when I say that.”

In a video tweeted by Breed, Bay Area rapper E-40 also urged people to stay home.

“This is the bay, we’re Bay Area strong,” he said. “Let’s stay in the house, man. We love 4/20 but let’s not get out there in crowds and all that, let’s not do that. It’s gotta be canceled this year.”

On Monday afternoon, some park-goers forgetting what day it was were confused by the fence, while others showed up just to see it.

Jun Kobashigawa hopped off his bike, pushed his sunglasses to his forehead and snapped a few pictures on his iPhone.

“I guess I should get the fence,” he said, stepping back and snapping again. “It’s part of it.”

420 II 2020

The longtime 4/20 participant spread his arms wide as he recalled the blanket of hazy smoke that drifted above a laid-back crowd in years past.

“Maybe I was stoned at the time,” he laughed. “But I was very impressed.”

Kobashigawa pedaled back down the trail with a treat tucked in his pocket to find a more secluded spot.

“I mean, you’re not supposed to smoke outside,” he said. “But you know, today’s 4/20!”

https://www.sfchronicle.com/bayarea/article/Coronavirus-on-4-20-No-crowds-at-Golden-Gate-15214270.php#photo-19320729

The Music Industry’s Covid-19 Summer: Cancel Outside Lands 2020 now

It is the height of greed and selfishness for Outside Lands to still be on schedule for this August in Golden Gate Park in San Francisco.

It is beyond shameful that Another Planet which stands to make millions is too concerned about its bottom line and not the health of the community.

In this time of the Coronavirus the Another Planet should not be waiting for San Francisco officialdom to take the step it should have taken already.

The promoters should be more than exploring. Cancel Outside Lands 2020 now.

Excerpted from Bloomberg  News 4.18.2020

Many artists and promoters don’t think there will be live music at all in 2020.

Outside Lands III 8.9.2019

Outside Lands, a music festival held in San Francisco every August, is exploring a move to October or next year, according to Gregg Perloff, one of the festival’s organizers. “The odds of it happening in August go down with each passing day,” Perloff said from his home in Lafayette, California. “We have to have a situation where the public feels safe, we feel safe and the bands feel safe.”

https://www.bloomberg.com/news/articles/2020-04-18/will-there-be-any-concerts-in-2020-artists-promoters-think-not

Trump Leads Pro-Plague States of America to a COVID Civil War

The Screaming Trumpistas will fight to support their totally unhinged hero until the bitter end.

These bitter enders may be struck down during the Pandemic. No matter. They’re True Believers all.

These folks will tune into Fox News and its duplicative cousins to drink the Kool-Aide being spoon fed to them.

These gullible citizens will howl in disbelief while they are going down while blaming everyone but the Shyster who put them in danger of death.

Daily Beast 4.18.2018

He is telling us plainly that he will stoke civil unrest and further harm public health to find a political pathway out of a galactic-scale fuck-up of his own making.

Trump’s stirring up his base will have consequences. Many of the people at his “liberation” rallies may well get or spread COVID-19, just when the country’s continued diligence and caution about flattening the curve through social distancing is most vital. These engineered protests are taking resources that first responders desperately need to respond to the crisis, not Trump’s crisis actors. 

Donald Trump fired the first shots in the COVID Civil War this week, a modern-day Jefferson Davis of the Pro-Plague States of America sending his opening salvo from Fort Twitter at Democratic governors who dared to question if it wasn’t just a wee bit early to end the stay-at-home orders in states still far to the left of the peak.

He started the week with claims of “total authority” and then cried about a supposed mutiny by mouthy state leaders. By Friday, he was up to calls to “liberate” states.

Who does he want people to rise up against, exactly: People who don’t want to die? People who don’t want protesters spreading a deadly disease that’s already killed 34,000 Americans? Governors who swore an oath to serve their states and protect their citizens? Science? Medicine?

Whatever the enemy, the Trump horde is lurching toward it with protests “breaking out” in state capitals across the land filled with MAGAmericans clad in their Red Badge of Credulity hats and carrying the banners of Esoteric Trumpism. Events in Florida, Kentucky, Michigan, New York, North Carolina, Ohio, Virginia, and California have popped up in the last 36 hours, with more on the way.

Trump Civil War II 4.18.2020.jpg

In Ohio, one striking photograph showed the screaming faces of Trump supporters pressed against the glass doors of the state capitol, their incandescent rage caught in a single moment of fury. Surrounding capitols, blaring horns, they’re ready to protest side by side, fighting social distancing to the death.

First of all, you should understand that none of this—zero, zip, nada —is organic. None of this is real. Every bit of it is being pushed on Trump’s behalf via the twin modalities of our doom: Fox and Facebook.

Just as the Tea Party had a brief, organic origin story but was soon managed, harnessed, controlled and weaponized, so too is today’s Trump movement. The crowds showing up for these “liberation rallies” are lowing cattle, led down a chute to be fed or slaughtered, depending on the day. Their ignorance of their own state as philosophical zombies whose lives Trump is literally willing to sacrifice for a tiny bump in the stock market is breathtaking. Dying for a second-order economic effect will show the libs, right?

“Trump’s not worried that these protests could get out of hand—he’s counting on it. ”

I’ve gotten in trouble before for calling them a bunch of credulous boomer rubes, but have a look at the demographic of any person at these stupid protests in pro-plague America; lily-white, assertively boomer, and as shrill as Tomi Lahren after an espresso colonic.

The first Civil War was against the vilest institution imaginable: a war to end a regime that treated humans as property, and waged at a horrific, bloody cost. Trump’s cosplayed civil war is against science, medicine, healthy public policy, and the desire to not have millions of Americans die in a preventable and shockingly resilient plague.

He wants his rebellion because it feeds into his brand of transgression and he believes it will benefit him politically; Donald Trump’s never tried to liberate a damn thing in his life except for banks from their money, porn stars from their panties, and rubes from their votes.

Let’s be clear about the things he’s going to do and the risks he is willing to take with the American people. Trump is telling us bluntly and plainly that he will stoke civil unrest to find a political pathway out of a galactic-scale fuck-up of his own making. He’s willing to let a disease that’s already killed 33,000 Americans due to his inaction and dishonesty spread further, faster, and more widely.

Driving these protests is one more proof that Trump is a president without a shred of commitment to the oath of office, the country he claims to serve, or any American citizen not named Ivanka. He wants what he wants, and damn the toll in lives and treasure. He’s not worried that these protests could get out of hand—he’s counting on it.

Trump knows his power over his base like the most exaggerated horror-movie mind control, and that no other president has ever enjoyed anything close. He knows his base—amplified by his pet media outlets—will take the ball and run with it no matter how crazy the idea. They’ll revel in the media criticism of their excesses and damn the consequences.

In Michigan, we saw protesters waving Confederate flags. In California, there were signs about how “COVID-19 is a lie.”

The one person who won’t pay a price? Donald Trump.

Immune to political pressure, unable to process moral responsibility, and unwilling to put anything above his raw, raging ego and his boundless desire to hold power, he’ll keep badgering his base to start the COVID Civil War, one tweet at a time.

 

 

Covid-19 Cure??Antiviral drug remdesivir shows promise in trial on monkeys

While the American President bloviates, distracts and divides the country the scientific community is doing its job looking for a cure to the Coronavirus.

The Bizarre behavior of Donald Trump and his Base supporters is the best example of why science and politics should never intertwine.

Let the scientists do their job unimpeded by ignormaus politicians.

Deutsche Welle 4.17.2020

Coronavirus-infected monkeys treated with the experimental drug remdesivir improved significantly, an initial medical trial has shown. The animals showed marked improvement just 12 hours after the first treatment.

On Thursday, it was reported that the drug had also been regarded as effective on coronavirus patients in Chicago who are participating in the trial.

US government scientists reported Friday that the antiviral drug remdesivir was effective in treating monkeys infected with COVID-19.

coronavirus surveillance II 3.19.2020

“Early treatment with the experimental antiviral drug remdesivir significantly reduced clinical disease and damage to the lungs of rhesus macaques infected with SARS-CoV-2, the coronavirus that causes COVID-19,” said a press release from the National Institutes of Health, which ran the experiment.

The small study, which is preliminary and has yet to be peer-reviewed, mimicked treatment procedures that are being used in a large human trial conducted on patients who have been hospitalized with either COVID-19 or SARS-CoV-2.

Remdesivir works against the COVID-19 by adding mutations that ultimately destroy the virus. 

Improvement after first treatment

In the experiment with monkeys, two groups of six rhesus macaques were intentionally infected with the respiratory virus. The test group was treated with the drug, developed by Gilead Sciences, while the untreated comparison group was not.

A medical officer checks devices at an emergency hospital, handling coronavirus in Indonesia (Reuters/Antara Foto/H. Mubarak) 

Some patients are receiving treatment with remdesivir in trials

The test group was given their first dose of the drug intravenously 12 hours after the initial infection, then every day for the next six days. The first treatment was timed to occur just before the virus reached its maximum level in the monkeys’ lungs.

Twelve hours after the first treatment, the macaques’ symptoms had significantly improved. Their conditions continued improving over the week.

At the end of the test phase, just one of the six treated animals displayed mild difficulty breathing, while all six animals in the untreated group had difficulty breathing.

The treated group also displayed significantly lower levels of the virus in their lungs than the untreated group and also had less lung damage.

Read more: Could an existing drug help against the new coronavirus?

More trials underway

Remdesivir is one of the first drugs thought to be capable of treating the new coronavirus. Clinical trials are already underway with human patients.

https://www.dw.com/en/antiviral-drug-remdesivir-shows-promise-in-trial-on-monkeys-with-coronavirus/a-53170509

 

Germany’s Merkel backs WHO after Moronic US ‘Fake News’ Prez cuts funding

It’s a disgrace that America and the World has had to live with such a clueless moron for nearly four years.  I mean Donald Trump.

The clown can’t even string a couple of sentences together and here he is cutting funding to the World Health Organization which has been in the lead to combat Covid-19.

WHO 4.16.2020.jpg

All those easy to entertain and politically seduce Americans who watched “The Apprentice”and helped to propel this huckster showman into office are now paying the price for their idiocy at the ballot box and possibly with their health.

Let’s hope (and pray for the religiously inclined) the world rids itself of this political charlatan next November.

Germany has a person in power who can speak intelligently having been a scientist. Angela Merkel obtained a doctorate in quantum chemistry in 1986 and worked as a research scientist until 1989. The American system and its electorate would never elect such a distinguished person, let alone a woman.

While drafting this post I am listening to Moussorgsky’s “Pictures at an Exhibition.” It is fitting music for The Pandemic. We saw it performed at the San Francisco Symphony several years ago. Beautiful music in a time of stress and fear.

Deutsche Welle 4.16.2020

More than 140,000 people have died due to complications of the novel coronavirus and two million more have been infected. The pandemic has strained healthcare systems across the globe and led to historic social and economic disruption.

The German chancellor has expressed her full support for the UN health agency, saying a “strong international response” is the only way to end the pandemic. US President Trump has accused the WHO of failing its mandate.

German Chancellor Angela Merkel has thrown her support behind the World Health Organization (WHO) as it tackles the devastating novel coronavirus pandemic, government spokesman Steffan Seibert said on Thursday.

Merkel and WHO II 4.16.2020.jpg

“The chancellor stressed that the pandemic can only be defeated with a strong and coordinated international response,” said Seibert. “To this end, she expressed her full support for the WHO and numerous other partners.”

Merkel’s comments were made during a video conference call with G7 leaders, just a day after US President Donald Trump announced he would suspend funding for the UN health agency.

The move was widely criticized in Europe. German Foreign Minister Heiko Maas said the funding freeze amounted to “throwing the pilot out of the plane in mid-flight.”

“It makes no sense at all to question the functioning and significance of the WHO now,” Maas said. He described the WHO as a the “backbone of the fight against the pandemic.”

Other G7 leaders also appeared critical of Trump’s unilateral action against the WHO. Canadian Prime Minister Justin Trudeau said the other G7 leaders, including Italy’s Giuseppe Conte and France’s Emmanuel Macron, recognized the need for a multilateral response to the pandemic.

“The WHO is an important part of that collaboration and coordination,” Trudeau said. “We recognize that there have been questions asked but at the same time it is really important that we stay coordinated we move through this. That’s certainly what Canada is going to do.”

Meanwhile, the White House said Trump’s conversation “centered on the lack of transparency and chronic mismanagement of the pandemic by the WHO,” adding that G7 leaders had urged a “thorough review and reform process.”

On Wednesday, Trump announced he would suspend more than $400 million in annual funding to the WHO, saying the UN agency “failed to adequately obtain, vet and share information in a timely and transparent fashion.”

https://www.dw.com/en/germanys-angela-merkel-backs-who-after-donald-trump-cuts-funding/a-53156070

 

San Francisco cop arrested on charge of domestic violence, sexual assault

There is nothing I have to say except to read the following story and shake your head in dismay and disgust.

What is most distressing is the FACT this same officer engaged in behavior totally unbecoming yet faced no reprecussion whatsoever.

Message:  The cops protect their own.

San Francisco Chronicle 4.15.2020

A San Francisco police officer assigned to the San Francisco International Airport bureau was arrested and booked into jail on suspicion of domestic violence and sexual assault, The Chronicle has learned.

Simon Chan, a 23-year veteran at the department, was placed on unpaid leave effective April 9 and an internal investigation is ongoing, said Sgt. Michael Andraychak, a San Francisco police spokesman.

Chan, who currently works as a K9 handler, was one of four San Francisco police officers named in a 2005 lawsuit that alleged the officers forced a gay man they caught urinating in the street to kneel down and mop up the mess with his hair.

cop-busted-i-4.15.2020.jpg

The city ultimately settled the lawsuit for $82,500, but none of the officers faced discipline because the Police Department missed a legal deadline to investigate the allegations.

Chan was arrested at SFO in the early morning hours of April 10, booked into jail and released later that day after posting $100,000 bail. Wagstaffe said Chan was arrested on suspicion of forcible rape and domestic violence, with the alleged incidents occurring between Dec. 24 and April 1.

The district attorney declined to comment further on the case, which is being investigated by San Bruno police.

https://www.sfchronicle.com/crime/article/SF-police-officer-arrested-on-suspicion-of-15203408.php

Big banks bleeding red. Profits tumble. Chase, Wells Fargo brace for Recession

Trouble Comin’ Everyday –  Pandemic Economic version.

Now the banking world is being hit hard by the Coronavirus and its impact on the work force.  When individuals and institutions cannot pay their loans to the banks the spread of the economic malaise widens.

Wall Street Journal 4.14.2020

The large U.S. lenders are preparing for an economic downturn as millions remain out of work

What’s more, banks and other lenders are starting to toughen their loan-approval standards, particularly for new customers. That means many people could find it hard to get credit just when they most need it.

Bank profits III 4.14.2020.png

Big banks sent a clear message in first-quarter earnings Tuesday: This recession is going to be bad.

Shares for both JPMorgan and Wells Fargo fell, with JPMorgan dropping about 3% and Wells Fargo losing about 4%.

JPMorgan earned $2.87 billion, down 69% from $9.18 billion a year earlier. The bank earned $0.78 per share, missing the $2.16 forecast by analysts polled by FactSet.

JPMorgan revenue was down 3% to $28.25 billion. That fell short of the $29.55 billion analysts had predicted.

Wells Fargo earned $653 million, down 89% from $5.86 billion a year earlier. The bank earned 1 cent per share, missing analyst expectations of 38 cents.

JPMorgan JPM -2.74% Chase & Co. and Wells Fargo WFC -3.98% & Co. set aside billions of additional dollars to get ready for a flood of customers to default on their loans as the coronavirus pandemic pummels the economy. That sunk the banks’ quarterly profits.

JPMorgan and Wells Fargo are the first big U.S. banks to report first-quarter results, and act as a bellwether for the broader economy. Neither bank has yet seen a wave of loans go bad, but they are preparing for it as the economy plunges further into a presumed recession and millions remain out of work.

Bank profits I 4.14.2020.png

Many Americans were already deep in debt before the pandemic, tapping credit cards, auto loans and student loans at record levels to cover a shortfall left by wages that remained flat for many years.

The banks for years rode all that consumer spending and borrowing to big profits. Now, they are preparing to struggle alongside their cash-strapped borrowers. Nearly 17 million Americans have sought unemployment benefits in the past three weeks. About two million homeowners are skipping their monthly mortgage payments, according to industry data.

“This is such a dramatic change of events,” said JPMorgan Chief Executive James Dimon, who returned to work a few weeks ago after emergency heart surgery. “There are no models that have ever done this.”

JPMorgan set aside an additional $6.8 billion in the quarter for potentially bad loans, largely in its consumer bank. That raised its total provision to $8.29 billion, more than the bank has had to take since 2010. But even that may not be enough, the bank warned.

The bank said the provision was based, in part, on the assumption that U.S. gross domestic product would fall 25% and unemployment would rise to more than 10% in the second quarter. But JPMorgan economists have recently amended their forecast to a 40% decline in GDP in the quarter and a 20% unemployment rate.

Wells Fargo said it set aside an additional roughly $3 billion in the quarter for potentially bad loans, both in the consumer and commercial divisions. That raised its total provision to $3.83 billion.

 

“We don’t know what the time frame is or how quickly the economy will recover,” said Wells Fargo CEO Charles Scharf. “What we do know is the contraction is real.”

Both banks have pledged to help troubled borrowers and small businesses by, for example, waiving late fees or allowing them to temporarily suspend their monthly payments. They have also taken a central role in disbursing government stimulus money to businesses. But that might not be enough for workers who could be out of a job and small businesses that could be shut down for many months.

Spending on credit cards dropped for both banks. JPMorgan said most customers kept up payments on credit cards through April 1, but that more customers have been late on those loans in the past two weeks. Wells Fargo said that consumers had already contacted Wells to defer more than a million payments, mostly on mortgages and auto loans.