Category: Covid-19

Preserving the economy without a restructure

I was having a conversation with a few friends the other day about how bad things were likely to get economically speaking and what a post-coronavirus recovery could look like.  Specifically what sorts of hard choices might need to be made when the economy reopens and what it might mean to lose restaurants, bars, concert venues, sporting events, shopping malls, etc as we know it.

It brought me back to my work on the housing collapse and foreclosure crisis, where over 9 million families in this country lost their homes due to (largely fraudulent) foreclosures from when the housing bubble started to pop through the economic collapse. During the response to the 2008 collapse, the Fed gave banks over $16 trillion in response. This amount of money, if still deployed but not given directly to Wall Street banks, could have paid off every underwater mortgage in America. Then it could have bought a home for every homeless family. Then it could have provided free college to all. And so on.

The amount given to banks was truly staggering – and it didn’t solve the problems. Millions were foreclosed upon. Housing values remained down. Massive amounts of wealth, especially in African-American and Latino communities, was destroyed. The Fed, with license from Congress and the Obama administration, pointed a money cannon at Wall Street and the American public barely got anything for it. But the banks stayed solvent and we did not have to go through an economic restructure or change the rules of the road in a substantive way in the industry that was culpable for causing the collapse.

This is relevant in the context of Covid-19 because right now we’re watching the federal government and the Federal Reserve find repeated ways to point a money cannon at business. Over $2 trillion in cash from the federal government and multiple rounds of liquidity from the Fed, with a current projection of up to $6 trillion. This has been done as already approaching 20 million people have lost their jobs and we are still figuring out the scope of the pandemic.

Long story short, we’re going to put an unthinkably large amount of money into the economy – mostly via financial institutions and giant companies – and early indications are that, like 2008 and beyond, the American people will see very little real outcomes from it.

How would I do things differently from the start?

  • Federal government pays all workers 80-100% of their wages, via their employer, regardless of income (I am for 100% but am open to being convinced a partial haircut is acceptable). Employers are banned from firing people. This keeps wages in peoples’ pockets, people with employer-provided health insurance on those roles, and minimal disruption to the labor market.
  • No rent or mortgage payments for the duration of the crisis. No foreclosures or evictions in this period.  The Fed backs up debt holders in the housing market & commercial RE market. You probably need to go ahead & have the Fed back up any securitized debt objects to prevent a massive wave of financial institution insolvency – but if we’re trying to avoid cataclysm, that’s fine by me.
  • Medicare for All for Covid, but for real – not Trump’s bogus allusions to it. No one should pay a cent for Covid testing, treatment, care or vaccine.

You do all this and people stay in their homes, get treatment, have economic security, and we don’t blow up the economy through social distancing and quarantines. You protect pretty much everyone but the investor class, who won’t be seeing their usual returns on non-securitized investment vehicles (like, say, restaurants or bars or sports clubs). But you basically punt the pandemic as an event that requires an economic restructure. This also would do the most possible for stopping the spread of the pandemic due to people not getting care they can’t afford or showing up to jobs while sick.

I would be very open to an economic restructure. I would be very open to Wall Street banks, hedge funds, and private equity vultures taking losses unto bankruptcy. I would be very open to using this moment to get Medicare for All, full-stop.

But simply put, if I wanted to see how the government could have acted in a way that would still put the massive amounts of money in play that are and will continue to be thrown at this problem, with a goal of minimizing change to how our economy works, then this would be what we should have done.

We’ll find out a few years after the crisis that whatever we ended up spending will have been enough for us to have the government do what’s listed above, to protect people, keep them sheltered, fed and healthy… but we won’t have done it. Instead we’ll have enriched Wall Street and protected wealthy investors from losses, with no meaningful public benefit to show for it.

Solidarity Against Trump’s Austerity Death Trap

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Amidst the fear and pain of the Coronavirus pandemic, the one thing that has given me hope is how people have come together in response – meeting the needs of the moment with togetherness instead of panic. There are countless mutual aid efforts happening around the world and incredibly bravery from frontline medical staff. People sing out their windows together in Italy to give each other hope. People bang pots and pans together out their windows in Brazil to protest the inadequacy of the government’s response.

In the US, all signs point to the Trump calling people back to work next week in the face of all medical advice. Conservatives are lining up with takes that suggest the death of a few percent of the population – hundreds of thousands to millions of people here in America – are less bad than the collapse of the whole economy. Trump thinks a crashing economy is worse for his political future than mass graves. (Let’s leave aside the absurdity that an attempt to restart the economy would survive a million dead Americans, or that Trump even himself stopped the economy to begin with). Carl Beijer has called this Trump’s austerity death trap and I think that captures it well.

Already online there is talk that workers should go out on general strike if Trump tries to force people back to work. My fear is that while the labor movement may not be strong enough to support this, many people will make the hard individual choice that indeed their lives and their families lives are more important than their jobs. They will put some degree of faith in the government to provide direct aid and some faith that they can get by on charity, on credit, and on personal austerity. They will bravely do the thing that is obviously right, but their President (and surely soon, the conservative media and their bosses) is telling them is wrong.

It is critical that people who say no to Trump’s prioritization of the economy over human life feel supported. It is critical that people do not feel alone in this decision, that they not feel shame in their abstention from work. It is critical that space is created for not only people to refuse this demand to keep the gears of the US economy going with the lives of working people.

There is a critical opportunity to both support people and encourage them to make the right decision and create the tools to help spread this reaction – whether we call it a general strike, an abstention, a non-cooperation movement against Trump’s deadly self-interest. What we need is visual and cultural signifiers to share. Not just badges and memes on social networks, but something local and offline.

I’m not a visually creative person. My first thought of a white bedsheet out a window probably has the wrong connotations but is the sort of thing that could be done by almost anyone in the world. A white bedsheet with a painted green slash could provide a solution. The green ribbon is being used in southeast Asia alongside the hashtag #WeWillOvercome. And the color does tell the story of the sort of recovery we want (be it a green stimulus or a green new deal or both)!

I don’t know if Trump will press Americans back to work. I do know that if he does, it will likely result in the rapid spread of the coronavirus and a massive increase in human suffering here in the US, at minimum. This is a terrifying moment, the worst imaginable outcome of putting a selfish, stupid, incapable man in the White House.  But in the face of this stupidity, we are not alone. We have each other and we have common sense.

There never really was mass resistance to Trump’s presidency. If there ever will be, this feels like the moment where it will emerge – beyond twitter and across our communities. The irony is now it cannot be in the streets, but must be online and in socially distant ways offline, too. That’s why I see value in a finding a unifying visual meme to connect those who will together reject Trump’s attempt at mass murder at the alter of the economy.