An Economic Wakeup Call

Will the world demand a more humane economy after this crisis?

Wherever you stand on the current Covid-19 pandemic crisis, I think we can all agree that life as we know it has drastically changed. We can agree to disagree on whether the types of mitigation deployed by countries around the world, including our own, will work or not. Frankly, that’s for another day.

But the economic reality about to hit us is real and disconcerting. How we deal with the calamity going forward may define our society and culture for generations to come. I want to look at what we’re about to go through from a glass-half-empty, glass-half-full perspective.

The half-empty part of this equation is what we’re about to experience. The economic pain that’s coming is something our country hasn’t seen since the Great Depression. Time is of the essence, and the over $2 trillion dollar rescue package passed last week in Congress, and signed by the president, is on its way to companies–small and large–state and local governments, and individual Americans.

The relief needs to be on a fast track. But make no mistake, there’s going to be a delay in getting the money to the American people. And for so many, that delay is going to be catastrophic. There’s no way of getting around that fact. And let’s face it, the measly $1,200 per individual isn’t going to cut it. We’re going to need more assistance—much more.

This is a government-mandated economic shutdown, no matter how you look at it. Thus, it’s up to the government to make the American people whole again. As with how to deal with the pandemic itself, the economic component poses questions as to how we should proceed. There are no easy answers.

House Speaker Nancy Pelosi already reiterated on more than a few occasions that there would need to be additional legislation to deal with the crisis. We can only hope that her counter-part on the other side of the aisle in the Senate, Mitch McConnell, feels the same way. We’ve also seen the Federal Reserve acting with an additional $4 trillion to prop up the markets and banks. That’s over $6 trillion, folks, and it’s still not going to be enough.

So now I’m going to head into the direction of my glass-half-full perspective. Perhaps, and bear with me here, the current pandemic and response to it is the wakeup call the United States so desperately needs. While I thought the Great Recession of 2008 might do the trick, it did not.

Mostly a financial crisis driven by Wall Street greed, we saw our government make sure the fat cats got fatter. The rest of us, however, were left scrambling for crumbs. Outrage from that bailout resulted in two movements: Occupy Wall Street and the Tea Party. While Occupy eventually fizzled out due to lack of a coherent message or direction, the revulsion and disgust hurled at the banks, and investors certainly left its mark.

Ironically, the Tea Party movement had longer staying power. While portraying itself as the defender of less government and lower taxes, they were furious at President Barrack Obama’s $700 billion stimulus bill and his enactment of the Affordable Care Act. I’m not sure where the Tea Partiers are these days. With Trump running up debt and deficits as far as the eye can see, they’ve been ominously silent.

Out of the present madness, I hope that we start to have a conversation—a real conversation—on the proper way forward for our economy. The current President, before the pandemic, loved to tout how we had the most exceptional economy in the history of the earth. We did have historically low unemployment before this crisis. That much is true.

But after a $1.5 trillion tax cut, the trickle-down we heard was coming, never entirely made it to millions of Americans. Surveys show that nearly half of all Americans couldn’t even afford a bill of over $400. Paycheck to paycheck is how most of these people live, and that was before this crisis. A recent photo showing a massive traffic jam in Pennsylvania at a local food bank says it all. This economy was, and is, built on false hope.

In a provocative article written by Simon Mair, a Research Fellow in Ecological Economics at the University of Surrey, for the BBC, he argues that the status quo is no longer sustainable. He talks about a series of steps we could take in the wake of the pandemic that would fundamentally change the way we look at capitalism, socialism, and the relationship between workers and employers.

His main argument: Could the huge shifts in our way of life being introduced as part of the fight against Covid-19 pave the way for a more humane economy? One can only hope so. I want to offer the following quote from Mair, which encapsulates the magnitude of what we’re about to go through:

“What is hopefully clear is that all these scenarios leave some grounds for fear, but also for hope. Covid-19 is highlighting serious deficiencies in our existing system. An effective response to this is likely to require a drastic move away from markets and the use of profits as the primary way of organizing an economy. The upside if this is the possibility that we build a more humane system that leaves us more resilient in the face of future pandemics and other impending crises like climate change.”

Hope. Yes, I’ve had it before, only to be disappointed time and again. But something tells me this time might be different. Much like what the Occupy movement was trying to do, this time, we’re going to need to take a long hard look at what it is we feel is a moral and just society. No longer can we rely on the markets to get us through something like this. It may take the form of massive protests in the street, the likes we haven’t seen since the 1960s, to demand change from our politicians.

The suffering now is real and is only going to get worse. Are we going to settle for the same kind of trickle-down, tax cuts for the wealthy solutions to save us? Or, will we demand fundamental change to a market-driven system that leaves way too many people lurching in the wind, trying to survive in the cut-throat world of ‘you’re on your own’ economics?

In Mair’s piece, he argues for a more ‘humane’ economy. If this crisis is the catalyst for such a monumental shift, years from now, we can say that in the face of complete societal devastation, we managed to change how everyday people live in the world—for the better. At this point, a little hope can’t hurt.