As the US Congress & Senate continue to ponder economic stimulus packages, the sticking points between the parties appear to be direct aid to regular folks and small businesses versus bailout payments and loans to large industries hurt by the pandemic fallout. Pandemic aside, we’ve been here before – crashing markets, sharply reduced demand for many goods and services, and sudden rising unemployment – in 1929.
For three
years after the crash, President Herbert Hoover refused to provide any significant
stimulus, keeping United States currency on the gold standard and rejecting
increased federal deficit spending, and calling on private charities to fill
the needs of struggling Americans – charities that were soon overwhelmed as the
unemployment crisis spread. It was not until Franklin Delano Roosevelt took
office in 1933 that the gold standard was abandoned in favor of flexible
currency and a massive experimental public jobs program called the New Deal was
enacted by Congress. At least we know that after the Covid-19 pandemic subsides,
most of those jobs currently lost will come back. FDR in 1933 had no such
assurance. We also now have governmental and fiscal measures in place that
allow for federal emergency deficit spending to spur and maintain the economy
to keep a temporary recession from becoming a full blow depression.
But our current President and Congress remain reluctant to use these measures,
and much of what they are willing to do is either insufficient or ill-targeted.
Covid-19 has created tremendous pressure to ramp up certain parts of our
economy – such as health care services, and the manufacture of health care
equipment, groceries, and sanitary supplies – while depressing other parts of
the economy such as travel/hospitality, bars & restaurants, and in-person
entertainment venues. We need a Coronavirus New Deal jobs program to hire
companies and people to fulfill the needs in areas most stressed, while saving unemployment
and other direct payments for those least likely to be able to pay any such assistance
back. We should provide zero or low interest loans to those who will be fine
once the crisis is over and they can get back to work.
For instance, hire current nursing students and medical students to join health
care teams and gain valuable experience by working on the front lines. In
exchange for putting their educations on hold during the crisis, forgive their
student loans and pay for the rest of their educations when they return to
school. That would also free up their teachers to join the front lines as well.
Hire appropriate companies both small and large who already manufacture similar
items and provide funding for them to convert their production to items of
shortage, such as ventilators and PPE equipment. After the crisis is over and they
have returned to making their usual products, pay them a nominal amount to
maintain the ability to convert their manufacturing back to health care
products in the future if another pandemic seems eminent. Pay medical research
companies to research and pro-actively develop treatments and vaccines for
other anticipated pandemic illnesses. Incentivize public benefit over profit.
Because if you don’t prioritize and incentivize public interests during normal times,
you will be caught woefully behind the curve again and have to mandate it in
times of crisis, which is what we are likely facing now.
Hire restaurants to deliver meals to high risk people and families in need who
are financially stressed and trips to the grocery store or the food bank are risky
or impractical. Hire pharmacies to fill pricey prescriptions for free so that unemployed
people don’t have to forego their medications, and courier services to deliver
needed medications to at-risk people. Hire counselors to provide free video consults
to people who have mental health issues that are exacerbated by the virus and
need extra attention and can refer those at high crisis risk to the appropriate
local resources. Hire broadband crews to extend high speed internet infrastructure
to places currently without it so that remote work and education options become
more readily available to all. These are just a few ideas, but the point is
that we should pay to hire companies and workers to fill necessary gaps, and
save payments and loans for those who simply must ride it out.
In regard to
large industries now asking for bailouts – make any taxpayer assistance, both
direct payments and loans, dependent on future stock buy-back and executive
compensation limits. And then pass comprehensive tax reform that makes large companies
pay their fair share of taxes, start enforcing anti-monopoly laws, and enact campaign
finance reform to make sure at the very least that there is transparency about
exactly who is paying who how much, and for what. When it comes to assistance
to the hotel industry, absolutely no payments should be made to Trump properties
until a full disclosure of exactly how much taxpayer money has already been
spent at those properties due to the Trumps’ own travel. Treasury Secretary
Steve Mnuchin has refused to disclose the full amount, estimated in the
hundreds of millions of dollars, until after the November election.
Using a New Deal-like jobs program model to fulfill current societal needs while
stimulating the economy is not 21st century rocket science – it’s a
method that was improvised during the years 1933-1941, when the CCC, WPA, PWA, &
TVA employed millions of Americans to build roads, dams, electric grids, and
parks, as well as fight fires, do research, and embark on historical and
artistic projects for public benefit. Given what we know now and our progress
since then, we could do so much better during this crisis if we applied the
same jobs and public need prioritization methods to the Covid-19 health and
economic crises. Some of this funding and hiring could be funneled through the
states, but we should pay companies and people to make and do the things most currently
needed, and subsidize others hurt by the crisis according to their needs both
now and projected for a time even after the crisis ends. In short, we need to incentivize
the provision of what we need, and subsidize only what has been drastically put
on hold according to ability to ride it out until the crisis ends.