The Biden-Sanders Unity Task Force presumes that the economy will recover as the virus recedes and the world returns to normal. This presumption is wrong at every level.
There are many good things in the report of the Biden-Sanders Unity Task Force, but it is fundamentally a fusion of progressive and moderate Democratic ideals from the era before Covid-19. The pandemic figures mainly as an aggravating factor, adding urgency and scale to various proposals. There is a presumption—as there was at the end of the 2008 financial crisis—that the old instincts and time-tested remedies will work as they have in the past, accelerating an economic recovery destined to occur anyway as the virus recedes and the world returns to normal.
In our view, this presumption is wrong at every level.
Absent a new and far more effective mobilization, both medical and social, on current evidence the pandemic will not recede. It will instead wreak havoc on American life for years. Given the lingering effects of the disease on many who recover, the costs in health, as well as lives lost, will multiply.
But even if the pandemic passes, profound damage to the American economy has already been done. Though the Unity Task Force Report shows little awareness that this is the case, we can identify this damage in six areas:
Health care. Covid-19 has wrecked the American system of fee-for-service private health care, and has done so irreparably. That system had evolved to provide individualized health care funded largely by private insurance attached to employment contracts. Now, nearly 40 million unemployed face a transition to costly, time-limited personal insurance, and after that, uncertainty. In addition, US health care faces its own financial crisis. As the population avoids hospitals and clinics, as work and commuting accidents and other infectious diseases fall, as elective procedures are postponed or canceled, less usage means higher unit costs, higher costs mean less usage: a financial-medical death spiral for this system.
Energy and climate. The Unity Task Force plank on climate change makes no mention of the pandemic. It fails to observe that America’s recovery from the 2007–09 crisis was propelled by revolutionary changes in oil and gas production, eliminating the need for imported oil and replacing a lot of dirty coal with relatively cleaner natural gas. The pandemic has put an end to that. With demand off around the world, oil is in vast surplus, the boom is over, and American oil production cannot be sold at a profit. An end to fracking, though good for the climate, will weaken the economy—unless we move strategically to cut consumption where it does the least damage to our quality of life, while at the same time putting the necessary resources toward clean energy.
Services and jobs. The services sector was responsible for almost all new jobs after the Great Crisis—an American success story despite mediocre wages and poor social benefits. But services—restaurants, bars, theaters, concert, hair and nail salons, gyms, coffeehouses, resorts and spas and theme parks, boutiques and craft shops—all involve close personal contact between the served and the server. The pandemic has dealt them a heavy blow. And worse is now unfolding, for consumers, faced with job uncertainties of their own, can and will cut these activities far back. In doing so, they inadvertently but unavoidably deprive their compatriots of income, business owners of profit, and workers of jobs. To bring all those jobs back, people need more than money; they would need to forget what is happening now and to lose the anxieties that the situation has already produced. This will not occur.
Advanced industries and construction. America’s advanced industries serve a world market. They depend on global, not local, investment, which depends on the full use of existing equipment. To take one example, there are two major producers of commercial aircraft in the world. But at present, half or more of all airworthy aircraft worldwide are parked on the ground; new ones will not be ordered, regardless of how heavily subsidized the producers may be. The situation is similar in other sectors, such as construction machinery and oilfield equipment. As firms adapt to the pandemic through automation and work-at-home programs, and as they adjust the usage of office towers to public health needs, there will be surplus space. Empty buildings mean that new ones will not be built. Also, as commuting falls, passenger vehicles get less use and last longer, meaning the demand for new cars will also fall.
Rents, mortgages, utilities and debt. As jobs and incomes disappear, rents, mortgages, water and power and phone bills do not. Nearly one-third of American renters did not make full payment in June. The CARES Act—tax rebates, extended unemployment, and payroll protection—helped. But the funds provided are running down, the programs have expired, and so have legal protections against evictions and foreclosures. Waves of displacement and homelessness are now certain, heavily affecting African American and Latinx communities that are mostly renters. These will unleash new waves of infections and deaths, again weighted against minorities and low-income families, unless steps are taken now to preserve and provide housing and basic services to all who need them.
Trust in government. The countries that have beaten the coronavirus so far were not all rich. They did not necessarily have the world’s most advanced hospitals and medical equipment. Some are capitalist or social-democratic, such as Germany, Italy, Greece, New Zealand, Singapore, Hong Kong, and Taiwan. Others, including China, Cuba, and Vietnam are socialist or further left. What they have in common is widespread trust in government, and governments that earned that trust—even after early mistakes as in China—through decisive action, clear messaging, social discipline, and unflinching tenacity in maintaining public services, food supplies, basic protective equipment, and basic medical services available to all without cost.
The countries that are failing—right now including Brazil, Russia, India, and the United States—are those with governments that do not command widespread trust. This problem is compounded by the toxic role of politics and public image-making, so that the appearance of success counts more than success itself, and illusions of reopening and recovery count more than facts. This breakdown can be repaired only by dramatic, radical public action, mobilizing the whole population—effectively, for the duration—as a matter of survival, such as seen on only three occasions in US history: in 1861, at the start of the Civil War; in 1933, at the launch of the New Deal; and in 1941, at the start of World War II.
What is to be done?
The first task is to take stock correctly of the actual situation and to begin to frame a response at the appropriate conceptual scale. We cannot provide a full account in this brief space. But the following seem indispensable.
- The United States needs a new National Public Health Service, taking over facilities and personnel, rationalizing and reorganizing as Ireland and Spain have done this year. This necessity goes beyond single-payer or Medicare for All. Clinics and hospitals should be integrated with basic production capacities for masks and other protective equipment, set up and funded by an independent Health Finance Corporation.
- Transition to green energy, via a Green New Deal and as proposed by the Climate Committee, but building on the radical transportation economies available in work-at-home situations, reordering of the work-life balance, and accelerating the shift to energy-efficient distribution of goods and services, including via universal, low-cost, high-quality broadband as a public utility. These functions call for public planning and a reorientation away from developer-dominated urbanism, for a new way of living, suited to local conditions, carried out on a national scale.
- A massively cooperative and nonprofit model for the provision of services and amenities, of all types required for the maintenance of civilized community life, along with a teacher-intensive, remote-as-necessary model for schools, colleges, and universities, and with publicly supported hibernation of facilities pending better times.
- A public job guarantee of useful work at a decent wage for all seeking jobs, especially outdoor work on climate mitigation and public services. So long as the pandemic lasts, basic income supports should be rationalized and sustained, sufficient to support utilities, groceries, medicines, housing, and other necessities.
- The government must consolidate the most critical advanced sectors, maintaining scientific and engineering capacity, alongside redevelopment of sites, plant conversion, rationalization and repurposing of office and retail spaces for public purposes such as education, culture, and sports. Again, a freestanding financial and organizational entity, modeled on the Reconstruction Finance Corporation, is the best way to ensure that this occurs.
- For economic and racial justice and for public health, there must be a long-term moratorium on evictions, foreclosures, and utility stoppages, with compensation for small landlords. The victims of this pandemic must not be punished for staying home! Rents and other debts cannot be merely postponed; they will never be paid in full and must be written down. This is a moral imperative that requires urgent action, even though it means, necessarily, a large-scale transfer of real wealth, a change in property rights, and a restructuring of finance. Going forward, the country needs a community-based system for determining fair rents, and for adjudicating disputes, with outcomes driven first and foremost by the demands of public health.
- As for trust and image, these will follow concrete achievements. The American government will be trusted when it is trustworthy again. America will be admired when it becomes admirable again. Neither bluster nor braggadocio will work, regardless of party—only work, dedication, spirit, and actual success, built on shared effort, public purpose, and common sense.
These are the things we call for, now, in the Democratic platform, in the fall campaign, and in the program that will govern the country for the next four years.