The American Prospect #313

THE BIDEN CAMPAIGN DAVID DAYEN, JACOB HACKER

OUR CRISIS RESPONSE SYSTEMS SAMMON, THOMHAVE, GIBSON, GURLEY

When we get out?

WHAT HAPPENS

S tarr on opportunities for change Meyerson on labor Kuttner on economic renewal Dayen on corporate power

M AY / J U N 2 0 2 0 $8.95 WWW.PROSPECT.ORG

I D E A S, P O L I T I C S & P O W E R

Progressives can’t afford to abandon the working class.

For decades, progressives led the way in fighting for policies to protect, strengthen and grow the working class.

From fighting against offshoring to rallying for better wages and working conditions, progressives stood up for America’s blue collar workers when nobody else would.

Progressives can’t quit the fight now. In 2020 and beyond, we must continue to fight for America’s workers.

americanmanufacturing.org

contents

VOLUME 31, NUMBER 3 MAY/JUN 2020

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THE POST-CORONA WORLD 4 POST-PANDEMIC AMERICA BY PAUL STARR 7 THE UNCERTAIN FUTURE FOR WORKERS BY HAROLD MEYERSON 10 MADE IN AMERICA: THE POST-CORONA ECONOMY WE NEED BY ROBERT KUTTNER 13 AFTER THE CRISIS, BIG BUSINESS COULD GET EVEN BIGGER BY DAVID DAYEN

FEATURES 16 THE PROGRESSIVE PURSUIT OF A BOLDER BIDEN BY JACOB S. HACKER THE FORMER VICE PRESIDENT HAS THE PROFILE OF A SUCCESSFUL CANDIDATE; NOW HE NEEDS THE AGENDA OF A SUCCESSFUL PRESIDENT. 17 DR. JEKYLL, OR MR. BIDEN? BY DAVID DAYEN THE PRESIDENTIAL HOPEFUL HAS A CHOICE TO MAKE: RESTORING THE CORPORATE CENTRISM OF THE PAST, OR ATTACKING THE STUNNING INEQUITIES HIGHLIGHTED BY THE CORONAVIRUS CRISIS. 28 EVERYBODY HATES THE SBA BY ALEXANDER SAMMON HOW DID ONE OF THE MOST ADDLED GOVERNMENT AGENCIES END UP AS OUR LAST LINE OF PANDEMIC DEFENSE? 36 THE JOURNEY OF THE JOBLESS BY KALENA THOMHAVE CONGRESS BOOSTED UNEMPLOYMENT BENEFITS. NOW THE CHALLENGE LIES IN GETTING THEM OUT TO THE UNEMPLOYED, THROUGH UNDERFUNDED STATE-LEVEL PROGRAMS. 44 THE MANY VARIETIES OF VOTER SUPPRESSION BY BRITTANY GIBSON AMERICA’S DECENTRALIZED ELECTION SYSTEM FAILS VOTERS IN A COMMON WAY. 52 THE CORONAVIRUS AND THE RISE OF THE STATES BY GABRIELLE GURLEY IN CRISES AND WARS, THE NATIONAL GOVERNMENT’S AUTHORITY INVARIABLY GROWS, WHILE STATES’ POWER SHRIVELS. THIS TIME, IT’S THE OTHER WAY AROUND.

CULTURE 56 KEYNES AND THE GOOD LIFE BY JEFFREY SACHS 60 TO BE STUDIED, OR PITIED? BY CHRIS ARNADE 62 DEATH IN VENICE AND AMERICA BY STEPHANIE ENGEL 64 PARTING SHOT TRUMP APPEARS WITH LUTHER, HIS EMPATHY TRANSLATOR BY JANDOS ROTHSTEIN

1

from the Editor

There’s an old Yiddish proverb that goes, Der mentsh trakht un Got lakht: Man plans and God laughs. We had an entirely different issue planned not too long ago, but then someone contracted a sickness in a food market in Wuhan, China, triggering the most truly global upheaval since World War II. The coronavirus crisis has been far more impactful than the 1918-1919 Spanish flu pandemic, maybe because our modern age is so much more socially and economically interconnected.

The immediate response to the economic collapse has forced us to fall back on longforgotten systems, bound together with rubber bands and tape, which have only haltingly and partially delivered relief. Only corporations have a Federal Reserve to relentlessly nurse them back to health; the rest of us must make do with the neglected and ravaged systems of public protection. One such system, which ALEXANDER SAMMON profiles, is the Small Business Administration, once a hopeful beachhead against monopoly and market concentration, now a backwater with “the most crashable website” in the federal government, tasked with pushing $660 billion out the door in forgivable small-business loans. KALENA THOMHAVE finds state unemployment insurance systems buckling under the pressure of historic numbers of laid-off workers filing claims.

GABRIELLE GURLEY looks at how states have had to battle the federal government for the medical supplies hospitals need to battle the pandemic, renewing the state-federal clashes that date back to the Founding. And writing fellow BRITTANY GIBSON highlights another state-based framework: decentralized election systems, forced by the coronavirus to rapidly expand voting by mail, over the opposition of Republicans seeking to suppress voting (though still susceptible to it).

Our senior editors, meanwhile, tried to look beyond the horizon at what the aftermath of the crisis will yield. And it’s a very uncertain picture. PAUL STARR lays out the multiple options: a rebirth of egalitarian spirit, or an accelerant of ugly nationalism and entrenchment. HAROLD MEYERSON sees labor either battered by mass unemployment and impossible legal barriers, or uplifted by radical collective action and newfound “essential” status. BOB KUTTNER forecasts either the rise of China as an economic hegemon, or a renewed domestic manufacturing sector and a green stimulus powering America back to a sustainable prosperity. And I look at concentrated corporate power, which will either become unbearably dominant after the crisis, or be felled by all the shortcomings the crisis has exposed.

Finally, you cannot talk about the restoration of a responsive government, or the potential for a progressive policy agenda that fills the social cracks laid bare by the crisis, without talking about what the presumptive Democratic nominee for president, Joe Biden, means to do if he’s elected. I spent two months reporting on the Biden campaign, finding a man who really could be swept along by history to become a transformative figure—provided he can manage to break out of the long-dominant Democratic Party mindset. JACOB HACKER , pre-eminent economic scholar and a Prospect board member, has further thoughts.

In addition to our big-picture coverage, we have been delving into the details every single day at our website. At prospect.org/coronavirus, you can find my daily Unsanitized report on the politics and policy of the crisis, as well as the latest news and reporting from our team of staff writers and contributors. You can get Unsanitized delivered to your email every day, too.

The pandemic is simply too important to neglect the opportunity to understand it, make sense of our response, and map out our future. It’s what the Prospect is known for, and where we will continue to aim. We tried in this issue to take a snapshot, to look at what we know today and what we can surmise about the future. —DAVID DAYEN

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EXECUTIVE EDITOR DAVID DAYEN FOUNDING CO-EDITORS ROBERT KUTTNER, PAUL STARR CO-FOUNDER ROBERT B. REICH EDITOR AT LARGE HAROLD MEYERSON DEPUTY EDITOR GABRIELLE GURLEY ART DIRECTOR JANDOS ROTHSTEIN MANAGING EDITOR JONATHAN GUYER ASSOCIATE EDITOR SUSANNA BEISER STAFF WRITER ALEXANDER SAMMON WRITING FELLOWS MARCIA BROWN, BRITTANY GIBSON EDITORIAL INTERNS MALCOLM FERGUSON, THOMAS RECCHIO CONTRIBUTING EDITORS MARCIA ANGELL, GABRIEL ARANA, DAVID BACON, JAMELLE BOUIE, HEATHER BOUSHEY, JONATHAN COHN, ANN CRITTENDEN, GARRETT EPPS, JEFF FAUX, MICHELLE GOLDBERG, GERSHOM GORENBERG, E.J. GRAFF, BOB HERBERT, ARLIE HOCHSCHILD, CHRISTOPHER JENCKS, JOHN B. JUDIS, RANDALL KENNEDY, BOB MOSER, KAREN PAGET, SARAH POSNER, JEDEDIAH PURDY, ROBERT D. PUTNAM, RICHARD ROTHSTEIN, ADELE M. STAN, DEBORAH A. STONE, MICHAEL TOMASKY, PAUL WALDMAN, SAM WANG, WILLIAM JULIUS WILSON, MATTHEW YGLESIAS, JULIAN ZELIZER PUBLISHER ELLEN J. MEANY COMPTROLLER ANNE BEECH COMMUNICATIONS SPECIALIST STEPHEN WHITESIDE BOARD OF DIRECTORS MEHRSA BARADARAN, DAAIYAH BILAL-THREATS, CHUCK COLLINS, DAVID DAYEN, STANLEY B. GREENBERG, JACOB S. HACKER, AMY HANAUER, DERRICK JACKSON, ROBERT KUTTNER, ELLEN J. MEANY, MILES RAPOPORT, JANET SHENK, ADELE SIMMONS, GANESH SITARAMAN, WILLIAM SPRIGGS, PAUL STARR, MICHAEL STERN SUBSCRIPTION CUSTOMER SERVICE STEPHEN WHITESIDE, 202-753-0937, INFO@PROSPECT.ORG PRINT SUBSCRIPTION RATES $36 (U.S.), $42 (CANADA), AND $48 (OTHER INTERNATIONAL) REPRINTS PROSPECT.ORG/PERMISSIONS

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ThePost-CoronaWorld

Post-Pandemic America

Will the coronavirus crisis reinforce—perhaps even accelerate—the ugly tendencies of our time? Or will it be a turning point?

By Paul Starr FOR NEARLY EVERYONE IN AMERICA

today, the covid-19 pandemic is unprecedented. Nothing in our experience has prepared us to make sense of what is happening or might happen next. But as we struggle to survive this horror, history and epidemiology may at least provide reference points for thinking about the world ahead.

Epidemics can produce lasting effects on society in at least three ways. The most direct is through the impact on the health and demography of populations. In the 14th century, the bubonic plague wiped out a third of Europe’s people, chiefly working-age adults, and the ensuing shortages of labor led to rising wages and the end of serfdom in England and other parts of Western Europe.

A second kind of effect stems from the societal response to an epidemic. After expanding powers to control epidemics, governments have often retained those powers afterward. During a recurrence of the plague in the 15th century, Venice confined arriving ships to outlying islands for 40 days, the origin of our word “quarantine.” Although its scientific basis was not understood at the time, the quarantine helped reduce the disease’s spread, as 40 days was long enough for infected rats and sailors to die off. In his book Epidemics and Society, the historian Frank M. Snowden argues that such public-health measures contributed to the growing powers of the modern state.

A third kind of effect arises from the meaning that people

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give to a crisis brought about by an epidemic. When the Spanish invaded the Americas in the 16th century, they brought smallpox and other diseases with them that devastated indigenous peoples. In his classic Plagues and Peoples, the historian William McNeill argues that it wasn’t just the mortality from disease that led to the collapse of the Aztec and Inca empires. The faith of the indigenous in their gods and their leaders collapsed in the face of diseases from which the invading Spanish seemed to be

mysteriously immune.

Each kind of effect, alone or in combination, can initiate chains of ramifying consequences. It is impossible to see far down these chains, but we can at least ask how the firstorder effects of the covid-19 pandemic may play out over the near term. The principal effects, I suggest, will likely fall into the second and third categories.

To be sure, we have no certainty at this point (I write at the beginning of May) about how long the pandemic will last and how big its toll will be,

though we do know what must happen for the crisis to end.

Assuming no sudden discovery of a cure, enough people must become immune for the reproduction number—the additional cases caused on average by an infection—to fall below one and stay there even when social distancing is relaxed. That drop in transmission will likely require immunity among 60 to 90 percent of a population (“herd immunity”), which can develop in two ways. People may acquire immunity from antibodies they develop from an infection, or from a vaccine.

It is not yet clear what level of immunity, if any, the antibodies may provide, nor how long that immunity would last.

Perhaps, due to an unprecedented global effort, scientists and the pharmaceutical industry will be able to develop, test, and manufacture a vaccine in 18 months—the time frame that the public has been led to expect, though that would be far quicker than for any previous vaccine. Incremental improvements in treatment may come sooner, cutting the case fatality rate and limiting the damage to the kidneys, heart, and other organs. But given where we are now, it seems only prudent to assume that the crisis will last well into 2021 and possibly into 2022. If political leaders try to shortcircuit vaccine and drug trials and green-light interventions that turn out to be ineffective or even dangerous, or if the virus mutates, the pandemic could be with us even longer.

In March, the high-income countries demonstrated that they were unwilling to try to

reach herd immunity by simply letting the pandemic take its course. They chose instead to institute social distancing and lockdowns that have largely succeeded in “flattening the curve,” though at enormous economic cost. How to exit from lockdown is now the immediate question. If countries can carry out universal and frequent testing, isolation of the infected, immediate and thorough contact tracing, and quarantine of the exposed, they will be in a stronger position to end lockdowns without catastrophic regression. If antibody tests can be made more reliable as measures of immunity, they may help too, by identifying and certifying people who would be the safest risks for frontline work in the pandemic.

The pressures to reopen economies are so powerful, however, that many political leaders are not waiting until a test-isolateand-trace regime and immunity credentialing are sufficiently developed. For the near term, the world is therefore likely to see periodic outbreaks and waves of covid-19—a stop-and-go pattern that at best will enable economies to limp along, with a steadily accumulating number of deaths, concentrated among the most vulnerable populations.

The American performance in dealing with covid-19 so far has been astonishingly inept.

Before a pandemic hits, countries often have a window of opportunity to prepare themselves and minimize the toll the disease will take. The United States had that opportunity but lost it because of Donald Trump’s obtuse leadership. As a result, America now leads the world in covid deaths. The early months of the pandemic do not inspire confidence about what will follow.

One conclusion clearly emerges from the early epidemiological and socioeconomic data: The pandemic’s primary direct impact is to intensify the

The American performance in dealing with COVID-19 has been astonishingly inept. health and economic disparities that already exist in American society. African Americans and Latinos are becoming infected and dying at the highest rates, and as unemployment rises, millions of families who live from paycheck to paycheck are being plunged into poverty.

Furthermore, unlike the 14th-century bubonic plague, the covid-19 pandemic is not going to strengthen labor’s bargaining leverage. The reverse seems probable; even after the worst of the pandemic is over, unemployment may be greater than before, and labor’s position less secure. (For labor’s potential response to the pandemic, see Harold Meyerson’s article on page 7.) During the long decline of manufacturing that began in the 1970s, the United States avoided the high unemployment rates of many European countries by creating large numbers of low-paid jobs in retail and other in-person services, which by their nature couldn’t be moved overseas. But it is precisely those jobs that are now disappearing as a result of lockdowns and fear of infection, and there is a good chance that many of them won’t return.

People who previously resisted online shopping have now become reliant on it and may not switch back. While local retail reels from the loss of foot traffic, the pandemic also appears to be accelerating the concentration of retail sales in Amazon, Walmart, Target, and Costco.

More generally, larger firms may gain at the expense of smaller ones that lack sufficient reserves or political connections to get bailed out, a continuation of the trends toward consolidation and monopoly (see

David Dayen’s article on page 13). Local newspapers provide another example of accelerated decline: Already sinking, they have been sinking even faster as a result of the loss of local advertising, and some have now sunk for good.

These examples fit into a bigger pattern: the pandemic as an accelerating event.

Writing in Foreign Affairs, Richard Haass makes such effects the basis of a general forecast about world politics. “covid-19,” he writes, “will not so much change the basic direction of world history as accelerate it. The pandemic and the response to it have revealed and reinforced the fundamental characteristics of geopolitics today. As a result, this crisis promises to be less of a turning point than a way station along the road that the world has been traveling for the past few decades.”

The accelerating developments Haass refers to include great-power discord, resurgent nationalism, and the decline of global cooperation, due in part to the waning of American leadership. America, Haass writes, continues to lose the power of its example: “The federal government’s slow, incoherent, and all too often ineffective response to the pandemic will reinforce the already widespread view that the United States has lost its way.”

This is one picture of the long-term impact of the pandemic: It will bring about more of the same, only faster. That may turn out to be true; it is usually a good bet that changes that were building yesterday will continue tomorrow. Historical turning points are rare;

otherwise, they wouldn’t be turning points. But acceleration effects are not necessarily the end of this story. The pandemic could also reverse prevailing patterns and trends.

This is where the second and third types of change—the effects of the societal response and evaluations of the crisis— become especially relevant.

Historically, as I mentioned at the outset, public-health responses to epidemics have strengthened governmental powers. After roughly a halfcentury when government has been in retreat in the United States, the response to the covid-19 pandemic may now be part of a turnaround. New York Times columnist Jamelle Bouie had a column in midMarch about the pandemic titled “The Era of Small Government Is Over,” only a few weeks after his conservative colleague Ross Douthat had a column titled “The Era of Limited Government Is Over.”

Bouie was writing about the need for government to “take responsibility for economic life on a scale not seen since the New Deal,” while Douthat was commenting about the rise of “state-power conservatives” in the Trump era. As the differences between those two accounts indicate, to say that government is on the rebound is not to say what kind of government it will be, or that even after voting for trillions in bailouts, Republicans in Congress won’t resume calls for austerity and privatization.

But the pandemic has not only strengthened the rationale for government; it has strengthened the rationale for progressive government. Some of the things we have done under duress—like covering the cost of coronavirus testing and treatment for the uninsured—we would have better done through a universal system coherently organized in advance. A pandemic highlights mutual

MAY/JUN 2020 THE AMERICAN PROSPECT 5

ThePost-CoronaWorld

interdependence: Your health depends on the health of others and on their being able to get health care if they get sick. It depends on the adoption of public-health measures that identity threats of infection before they reach you. And it depends on others being able to stay home from work when they get sick so they don’t pass on infections.

More clearly than any other event, the pandemic has exposed the irrationalities of our health system. Job-based health insurance is exhibit number one. Just when Americans not only need health care themselves but need others to have it, millions of people are losing their coverage when they lose their jobs.

The neglect of public health is exhibit number two. A

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private system that has gobbled up resources has left us unprotected against collective risks; on the eve of the pandemic, the Trump administration was calling for cuts in the budget of the Centers for Disease Control. The absence of paid sick leave is exhibit number three. You may never have thought you had any stake in paid sick leave for supermarket workers, but now your stake should be obvious. The idea that “we’re in this together” isn’t just a slogan; it’s an epidemiological fact.

Reality has taken sides. Many of Trump’s supporters believed the president and conservative media when they told them the coronavirus was a hoax or a minor problem. Now many of them must know they were lied

to and those lies are costing lives.

Die-hard Trumpians will not change, but many others may be open to persuasion.

The whole experience has the potential to unleash rage; the question is against whom that rage will be directed. Trump and the Republicans are trying to direct it against the Chinese and, as always, against liberals and Democrats. But Americans are now in the position of a people left unprepared by their government in the face of a military attack. Trump put them in that position.

Public rage about the pandemic is also likely to increase when it becomes apparent that the powerful and well-connected are getting bailed out and given new tax breaks, while millions of

ordinary people have been left to fend for themselves.

This, too, is explosive.

Not every pandemic leaves a deep imprint; the 1918 flu pandemic killed more Americans than died in World War I, but it had little effect on American society. We should not assume covid-19 will change America, and we should be wary of predicting an outcome that corresponds to what we wanted all along. But failing to seize a moment that confirms the logic of social solidarity would also be a mistake. The covid19 pandemic could reinforce and accelerate the ugly tendencies of our time. It will be a moment for genuine progress only if we persuade our fellow citizens about the lessons to draw from it.

GABRIELE HOLTERMANN-GORDEN / SIPA USA / VIA AP IMAGES GOTPAP / VIA AP IMAGES

The coronavirus has the potential to unleash rage; the question is against whom that rage will be directed.

The Uncertain Future for Workers

It will take all their current militance, plus a government that restores their rights and curtails a depression, for workers to survive—and, just maybe, prevail.

By Harold Meyerson WHAT THE FUTURE HOLDS FOR

American workers—and how those workers might shape that future—lies shrouded in uncertainty. We don’t know when it will be safe for “nonessential” businesses to reopen. We don’t know how many businesses will go bust, or how many will bring back just a fraction of their workforce, perhaps at half-time or half-pay. We don’t know how many retail transactions will remain online, and how many retail jobs that will destroy. We don’t know how prolonged will be the vicious circle of “uns” and “unders”—unemployment and underemployment leading to underconsumption leading to underproduction leading to still more unemployment.

High unemployment seldom leads to labor’s advances— except that it surely did in the era of labor’s greatest advances, the Great Depression. Might the dynamic in our own day be similar—a rendezvous of heightened worker militancy with a sympathetic public and friendly presidency and Congress? As I write, there have been at least 150 reported instances of workers walking off the job demanding safer conditions.

The combination of being hailed as essential and treated as disposable has been consciousness-raising for millions of frontline workers. It’s been consciousness-raising, too, for the media, for the government,

and for upper-middle-class professionals, for whom these workers—health care aides, farmworkers, packing-plant workers, supermarket employees, drivers, transit workers, warehouse workers, hands-on public employees, and many others—have been politically invisible for decades. Public sympathy has also swelled for the “nonessential” retail, hospitality, and other workers who can’t work at home and have been abruptly laid off.

Moreover, the economic earthquake the pandemic has triggered comes at a time of heightened public awareness of the injustice of our stratospheric levels of economic inequality. Might all this potential energy for social and economic reform yield actions that effectively overcome the damper that depressions put on worker uprisings?

Again, we don’t know yet.

We do know that misery needs company if it’s to be transformed into effective action for change. With the self-isolation and social distancing imposed by the coronavirus, however, company has been hard to come by. When workers can’t huddle with co-workers, welcome organizers into their homes, or go to mass meetings, the hurdles erected by our deficient labor laws, hostile employers, and public officials become even higher. Despite the successes of digital union organizing among the largely young employees

of media outlets, nonprofits, and universities, the stirrings of remote organizing for the broader workforce are at best a precursor to real organizing.

HOW, THEN, CAN WORKERS SURVIVE

what may be another Great Depression and come out of it, as in the 1930s, with expanded power, greater rights, higher pay, and more certain benefits? Their militance and a heightened level of public sympathy will be necessary but insufficient conditions for progress. To restore small-d workplace democracy, the key player will have to be capital‑D Democratic governments at the national, state, and local levels, compelled to do the right thing in part by whatever power established workers’ movements retain and new such movements can muster.

The necessary complement to such action will be three groups of measures required to allay the advent of another Great Depression.

First, the most important immediate need for American workers is to have the government directly appropriate funds to employers to keep their workers on payroll, with full pay and retaining whatever benefits they had. Legislation mandating such action has been introduced by senators encompassing the full ideological spectrum of the Senate’s Democratic Caucus (its authors include Vermont’s Bernie Sanders and Alabama’s Doug Jones),

by House Progressive Caucus leader Pramila Jayapal of Washington, and, in a somewhat less generous version, by Missouri Republican Sen. Josh Hawley.

Their bills would also provide payments to employers who have laid off or furloughed their workers, provided they restore them to paid-employee status.

It is a measure of the comparative powerlessness of American workers, and the distinctly American absence of national solidarity, that such legislation was adopted with little if any controversy in most European nations, even the Tory-run United Kingdom, but not in the United States. The one U.S. industry where keeping employees on payroll did become public policy was the airlines, and that involved an explicit quid pro quo that illustrates how Democrats and unions can together combat economic catastrophe. The Republican Senate and administration clearly wanted to bail out the companies, most of whose leaders have long been prominent in Republican-donor ranks. The airline industry is exceptional, though, in the high percentage of its employees—pilots, flight attendants, and mechanics— who are unionized, and their unions made clear to the Democratic House that a bailout had to include direct funding for their members. Moreover, one of the most powerful and politically active unions in the country—the Service Employees International Union—had succeeded in recent years in organizing service workers (such as wheelchair attendants) in East Coast airports, which, as Steven Greenhouse has reported, may have constituted the largest successful unionization of privatesector workers in many years.

At seiu’s prodding, House Democrats therefore got an additional $3 billion set-aside in the appropriation for airport workers, union or (primarily) not, across the country. By the

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ThePost-CoronaWorld

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Worker protests (like this one in front of a Whole Foods in Brooklyn, New York) are necessary but insufficient for real progress.

programs that create livingwage jobs. (Hawaii’s Commission on the Status of Women has crafted a “feminist economic recovery plan” that lays out some particulars.) Absent such policies, particularly in times of high unemployment, family caregivers—disproportionately women—will tend to these tasks at home, either uncompensated or barely compensated, depressing the nation’s purchasing power and economic vibrancy.

The third element to keep the nation from careening into Depression levels of unemployment is federal funding for state and local governments.

One reason recovery from the Great Recession took so long was that the federal stimulus funds were more than offset by the funding cuts at lower levels

of government. In late 2009, I calculated that the value of the Obama stimulus for fiscal year 2009-2010 (some was to be allotted in subsequent years) was $571 billion. But the budget cuts and tax hikes of states and localities—funds taken out of the economy—came to roughly $325 billion. That means the net government stimulus was just $246 billion, or 0.8 percent of gdp—a level lower than that of many nations the U.S. was then chastising for insufficient stimulus. The balance of the Obama stimulus was appropriated for the years 2011 to 2019, adding a small bump each year while continued cuts in state and local governments’ spending at least through 2014 clearly exceeded the federal outlay. Both the Obama

administration and congressional Democrats wanted to enact more stimulus spending in those later years, but the Republicans who took control of the House in the 2010 election blocked any such measures—as they threaten to again today.

If Democrats can win these three battles—for federal payments to keep workers on payrolls, for an infrastructure and care-profession stimulus, and for assistance to state and local governments—Depression levels of unemployment will likely be avoided. Absent those victories, however, improvements in workers’ lot will likely come to a standstill.

In one illustration of how this dynamic might play out, this April the Democratic majority

GABRIELE HOLTERMANN-GORDEN / SIPA USA / VIA AP IMAGES

end of April, of the $29 billion in airline grants and loans that the government had delivered, $12.4 billion had gone directly for workers’ paychecks.

Second, complementing any federal legislation to keep workers employed, we need a massive program of direct public employment. Periodically, the Trump administration makes noises about a large-scale infrastructure program, but it has always insisted that states and localities pick up 90 percent of the tab—a nonstarter in the best of times and a complete absurdity at a time when states and localities are slashing budgets. Such a program requires a multitrillion-dollar federal commitment—which is to say, Democratic control of the White House and both houses of Congress.

A President Biden would thereby be enabled not merely to launch a huge infrastructure investment paying union-level wages, but to direct it primarily to Green New Deal projects—a political mega-twofer that could win support from both construction unions and climate activists, today the two most diametrically opposed elements of the Democrats’ political universe. At a time when the domestic consumption of fuel by cars, trucks, and airplanes fell by 31 percent from mid-March to mid-April, the alliance that those unions have struck with the oil industry may come to strike them as increasingly questionable when other forms of power entail less risk. An oversupply of sunlight can cause sunburn; an oversupply of oil can tank the industry.

But the nation’s needs and the composition of its workforce have changed since the 1930s.

Just as important as a national infrastructure program is a national caring program, in which government directs massive funding to child care, elder care, and public-health

in the Virginia legislature passed, and the Democratic governor signed, a measure that postponed an increase in Virginia’s minimum wage.

Earlier this year, those same Democrats, who’d finally wrested control of the legislature from Republicans last November, had proudly increased that minimum wage for the first time in decades.

Facing the prospect of recordhigh unemployment, and small businesses not certain they could afford to reopen, and of once full-time workers returning on a part-time basis, however, they opted to delay the wage hikes for at least one year. That’s the kind of conundrum Democrats will confront if unemployment goes through the roof and stays there.

THE NEW DEAL, OF COURSE, CON-

sisted of more than public works and public employment to allay joblessness. Its two other defining achievements were the creation of a skimpy but nonetheless unprecedented social safety net and laws enabling workers to build powerful unions.

The emergence of worker power in the 1930s was both cause and effect of New Deal reforms. During the New Deal, the direct gains in worker power began with the factory occupations and then general strikes (in San Francisco and Minneapolis) in 1934, which were certainly a factor in the enactment of the National Labor Relations Act one year later. The occupations and strikes, all led by radicals, were themselves preceded by the emergency enactment, during Roosevelt’s first hundred days, of the National Industrial Recovery Act, which included a section that prefigured the nlra’s legalization of collective bargaining.

One can imagine a similar dual track to enhanced worker clout emerging in 2021 should the Democrats win power in Washington. Outbreaks of worker militance are already in

The decisive mover for labor’s cause isn’t just labor. It’s also the government. ample evidence today, beginning with the teachers strikes of 2018-2019; the concomitant strikes of hotel and supermarket workers; and, even during the current shutdown, the walkouts of frontline workers across a range of occupations.

At the state and local level in recent years, workers have won a number of victories improving their conditions of work, such as increases to the state or local minimum wage and the enactment of workplace wage and hour standards for workers (such as domestic and gig workers) left out of federal coverage.

But federal law—the now wholly useless National Labor Relations Act, violated with impunity by American employers for the past four decades—preempts states’ ability to enhance worker power, to enable them to build organizations of their own. seiu’s Fight for $15 and a Union has raised the wages of millions of workers by winning state and local legislated wage hikes but has failed to generate a single new member for the union, since federal law makes that all but impossible.

Is there any way that states can devise an end run that increases worker power? In an April Prospect article, labor historian Nelson Lichtenstein proposed that state governments can require the formation of worker safety councils at all businesses with at least 25 employees. After democratically selecting their leaders and procedures (a process the state

would organize and oversee), the councils would have equal voice with management on the current question of when to return to work, and the power to monitor safety conditions after their return. Lichtenstein hopes such councils could be “prefigurative” of actual unions—whose formation would require not just militant union organizing, however, but a sea change of law and practice at the federal level.

That might come to pass. Given the widespread awareness of the nation’s towering economic inequality, and a narrower awareness of how the de-unionization of the once-industrial Midwest has played a major role in the defection of the white working class to Republican ranks and Donald Trump’s column, every leading Democratic presidential contender over the past year included major labor law reforms in their platforms.

Their policy pledges went well beyond the union-ratificationby-card-check proposal of the late lamented and doomed labor reform bill of 2009. They also included proposals for instituting sectoral bargaining, invalidating state “right to work” laws, and in some cases, establishing regular worker council meetings with management, permitting unions to boycott companies doing business with companies being struck, and even requiring corporations to divide their boards between shareholder representatives and the elected representatives of their employees.

There is no one magic

solution to the rebirth of worker power, but the great surge in union membership in the 1930s didn’t come with the sit-down occupations and general strikes of 1934, but in the wake of the 1935 federal legislation legalizing collective bargaining. The union surge that followed still required sit-downs and physical battles with management thugs, still required the leadership of radicals, still required the active support of surrounding communities and broad public support as well—but it is difficult even to imagine that surge had the federal government not made unionization a legal possibility.

Today, labor again has a cadre of radicals (by no means a majority of labor’s leadership, but a cadre should suffice), active support from many surrounding communities (the natural outgrowth of some unions’ strategy of partnering with community groups to win community as well as workplace demands), and a high level of public support— according to the Gallup Poll, currently the highest in 50 years. But as in the 1930s, they need new federal legislation to actually create self-sustaining worker organizations that can effectively win power and gains for their members, whether at the level of the workplace, the enterprise, the sector, or the region; whether their members are full-time workers or part-timers, mislabeled “independent contractors” or gig workers, or employed by franchises or sub- or sub-sub-contractors.

The decisive mover for labor’s cause isn’t just labor, then. It’s also the government. It’s the Democrats, warts and all, the great cross-class party that once again must tilt decisively toward workers—that labor and progressives must lean on to make that tilt—lest the nation devolve even more fully into oligarchic rule.

MAY/JUN 2020 THE AMERICAN PROSPECT 9

ThePost-CoronaWorld

Made in America: The PostCorona Economy We Need A national plan is the key to our recovery, our public health, our security, and our planetary survival.

By Robert Kuttner AMERICA NEEDS A RECONSTRUC-

tion strategy that goes well beyond emergency relief measures. This is a moment for a broad public initiative that links modernization of infrastructure, reclamation of domestic industry, and investment in climate transition, at a scale well into the trillions of dollars.

The economy, coming out of the corona depression, will need these public investments both to augment a feeble privatesector recovery and to bring the U.S. economy into a new, postneoliberal, greener era.

Without this national strategy, the U.S. will slip behind China, surviving as a secondclass power facing a first-class climate catastrophe. We will become even more a society divided into globalist billionaires and nation-bound lowwage workers. As the crisis revealed, we are not the richest country in the world. The world’s richest country would figure out how to make a cloth mask. The cure for America’s ills must go far beyond recovering from the corona depression—but only if we seize the moment.

The subservience to ultrafree-market ideology combined with a willful blind spot about the rise of mercantilist China, under presidents of both parties (who were all-too-hawkish when it came to Soviet Russia) is explained only by the huge profits made by U.S. corporations from the current arrangement.

Trump has broken with this consensus at the level of nativist

10 WWW.PROSPECT.ORG MAY/JUN 2020

rhetoric and scattershot tariffs.

But he has no strategic trade, diplomatic, or industrial policies that would alter the status quo.

We need a managed form of globalization as well as a managed economy at home.

The resonance of the New Deal is not accidental, since progressive economic nationalism was precisely the strategy of the Roosevelt administration—national economic goals, explicit planning, government support of science and technology, public capital, and a rejection of deflationary financial globalism. This continued well into the post-fdr Cold War era because of national-security concerns about the ussr as a geopolitical rival. Today, our geo-economic rival is China, and national economic security should be no less of a driver of policy.

The contrast between the response to the corona pandemic and the World War ii mobilization is staggering. In 1941 and 1942, factories making cars, trucks, and other domestic products converted to production of planes, ships, tanks, and artillery, in a matter of months.

Private citizens planted victory gardens and participated in scrap drives, as people today are sewing makeshift masks. But nobody pretended during wwii that these volunteer efforts were anything but a modest complement to a massive government-led mobilization.

Unlike 1941, there is no leadership from the White House.

We’ve lost so much domestic production capacity and knowhow—muscle memory of how

to manufacture—that only a World War ii–scale mobilization can begin to recover that loss.

Beyond Better Supply Chains The pandemic has focused public consciousness on a term few Americans had heard of—supply chains. Urgently needed medical supplies, from N95 respirator masks to ventilators, are made mostly offshore, primarily in China. Our vulnerability to far-flung offshore supply chains was flagrantly revealed when government tried to ramp up adequate domestic production, and failed.

In our supply-chain education, we are reminded that a chain is only as strong as its weakest link. “The structure is often less like a tree than a diamond,” says Yossi Sheffi, director of mit’s Center for Transportation and Logistics. The supplychain fragility is compounded by hyper-concentration. Half of the U.S. supply of swabs needed in coronavirus testing, Sheffi points out, are produced by a single company, Copan, based in Northern Italy, which was shut down for several weeks.

In the context of the pandemic, people have proposed various remedies, from palliative to fundamental: Use the Defense Production Act to compel domestic production of vital medical supplies. Rebuild the Strategic National Stockpile. Diversify sources of supply.

Require disclosure of several tiers of subcontractors, to prevent bottlenecks before they occur. Enforce antitrust laws

to reverse consolidation of the big pharmaceutical companies.

Have government, or a government-sponsored nonprofit, manufacture unprofitable generic drugs. Use mandatory licensing to take back production from China.

But even if these measures were taken, preventable shortages of vital medical and pharmaceutical supplies are, to use a fancy word, a synecdoche—a small part that reveals something about a larger whole. The entire U.S. economy has become overreliant on a trading system that benefits, well, traders, at the expense of the broader society. If all we did was to make our medical supply chains more resilient and reliable, this would be a crisis wasted.

America has also become dangerously vulnerable, for example, on the military front.

The rise of “dual use” technologies with both military and commercial applications has led armies of lobbyists to successfully petition for loopholes in export controls, and allowed hedge funds and private equity companies to circumvent national-security concerns.

Meanwhile, China’s own targeted industrial policies coerce U.S. companies to share dualuse technologies, or simply steal them. When China makes a deal for production facilities with a U.S. company, say, Boeing or ge, the U.S. company must agree to produce mainly for re-export to the West, so as not to compete with domestic producers that the Chinese government is incubating to capture global market

share. Plus, the U.S. company must share sensitive, proprietary technology with Chinese “partners,” whose goal is soon to surpass and supplant the U.S. rival.

The results of this scheme can be seen in a 2018 Department of Defense report on military supply-chain vulnerabilities, which found that “China is the single or sole supplier for a number of specialty chemicals used in munitions and missiles … In many cases, there are no substitutes readily available.” Other examples of foreign reliance included items as basic as circuit boards, night vision systems, batteries, and space sensors.

Would China really play that kind of hardball? In 2010, the Japanese, in a dispute over fishing rights and territorial waters, seized a Chinese fishing trawler.

China, which dominates the world supply of rare earth materials used in batteries and small electronic devices, told the Japanese government to expect that exports would cease. China was willing to weaponize supply chains, and Japan meekly returned the trawler.

U.S. loss of dual-use technology is also driven by Wall Street. The Defense Advanced Research Projects Agency (darpa) acts as a public-sector investment bank to underwrite development of technologies needed by the military, often with commercial applications as well. One such area is robotics. darpa provided the seed capital for the successful company that became iRobot.

The Pentagon needed robots for battlefield uses in Iraq like disarming of bombs and battlefield reconnaissance. iRobot also invented the popular home robot vacuum cleaner known as Roomba. In 2015, a hedge fund operator named Willem Mesdag, a former Goldman Sachs partner, invested heavily in iRobot, and successfully pressured the company to give up its

Manufacturing not only provides good jobs, but large domestic factories anchor entire communities.

military business and focus on home uses. In line with classic hedge fund tactics, Mesdag and his allies moved production to China. So technology financed by the Pentagon—by all of us, the taxpayers—has now relocated to China.

This story is far from a oneoff. It is the general pattern.

Those rare earth materials that China threatened to withhold from Japan use a technology devised by gm engineers using Defense Department grants.

Then the leading U.S. spin-off company that developed rare earth magnet applications in the 1980s and 1990s, Indianabased Magnequench, was purchased by Chinese interests in 1995, with the aid of a Wall Street investment banker, Archibald Cox Jr. The entire enterprise, including the jobs, technology, and manufacturing know-how, was moved to China.

The General Case for Reviving Domestic Manufacturing Even if China were not bent on becoming the world’s economic leader through massive state investments such

as Made in China 2025 and the Belt and Road Initiative (which will export infrastructure projects to some 80 countries), there would be a strong case for reclaiming U.S. production capacity. But China’s rise provides the exclamation point. China’s reliance on state capital allows its economy to target long-term dominance in one emerging technology after another, while America’s reliance on distorted market signals from Wall Street causes our industry to fall behind. As China becomes infrastructure provider to the global South, all this has geopolitical as well as geo-economic implications.

After the first wave of offshoring, Berkeley economists Stephen Cohen and John Zysman wrote a prophetic book in 1987 titled Manufacturing Matters. They pointed out that manufacturing not only provided good jobs; large manufacturing plants anchored entire regional economies. Today’s manufacturing, moreover, was the admission ticket into the advanced technologies of the future. Engineers innovate by

being close to the shop floor.

If you lose production of, say, machine tools, or semiconductors, or solar panels, or telecom, and a mercantilist rival such as China becomes not only the dominant manufacturer but the global technological leader, then it is all but impossible to get back into the game absent government intervention.

In the decades since Cohen and Zysman wrote their book, the U.S. trade balance has gone from a slight surplus of $16 billion in 1975 to a deficit of $578 billion in 2019. In advanced technology products, we’ve gone from rough balance to a deficit of $132 billion. We have lost the know-how to make a shocking assortment of products.

Lobbyists have petitioned the U.S. Trade Representative that America simply cannot make such goods as nylons, bridal gowns, and even Bibles, the oldest mass-produced product in the Western world.

The post-corona economic mobilization needs to restore domestic manufacturing generally. Just as darpa plays the role of public investment banker for

MAY/JUN 2020 THE AMERICAN PROSPECT 11

ThePost-CoronaWorld dual-use technologies, government can underwrite industrial leadership as it did during World War ii, this time to prevent Beijing’s Made in China 2025 program from dominating emerging technologies. If Wall Street continues to sell out the national interest, government should take an equity stake, placing public servants on corporate boards, as the Reconstruction Finance Corporation sometimes did during the Great Depression and World War ii.

We should complement public members on corporate boards with worker representatives.

Our unofficial ideology of laissez-faire ostensibly rejects the idea that nations should promote “national champions” such as Siemens or Huawei or Airbus. This is for the market to decide. But there is a compelling case that, as long as government moves heaven and earth to ensure the solvency of Boeing, a basket case due to disastrous management blunders like the 737 max, it should get a controlling interest in the exchange.

Boeing could hardly do worse as a government corporation than it did as a Wall Street-obsessed private-sector company.

The fact that so many corporations have no better uses for trillions of dollars of capital than stock buybacks and dividends suggests that “the market” doesn’t perceive productive investment opportunities in the private sector. But there is no shortage of them in the economy. That’s all the more reason for public capital to step into the vacuum.

From a Managed Economy to a Green Economy This strategy goes hand in hand with a long-overdue program for modernizing infrastructure and converting to a resilient, renewable economy. The American Society of Civil Engineers puts the shortfall in basic infrastructure at $4.5 trillion.

The sponsors of the 2009

12 WWW.PROSPECT.ORG MAY/JUN 2020

Forget “timely targeted, and temporary.” Green investment should be planned, public, and permanent. recovery guiltily described the goals for stimulus as “timely, targeted, and temporary.” The new green-investment initiative needs to be planned, public, and permanent.

The collapse of jobs in the crisis presents a perfect moment to establish this green stimulus. It’s not for nothing that the Golden Gate Bridge and Hoover Dam were built during the Depression. So too can we convert idle resources to the infrastructure needs of today.

To the extent that taxpayer dollars and public debt are used to create public improvements, they should also provide domestic jobs. Trade norms that brand this approach as illegitimate favoritism need to be discarded in favor of national renewal.

We can still work out arrangements with trading areas such as the eu that share our views of a mixed economy. Nations like China, which flagrantly violate human rights, labor rights, and the intellectual-property rights of their supposed partners, can be subjected to offsetting tariffs and regulations. No U.S.-based company, for example, should be allowed to follow coercive Chinese rules of technology transfer.

In order to pursue a national public-investment and greentransition strategy, we also need to wrest economic policy from failed economic thinking. One word that gets thrown around far too casually is “efficiency.” As public discussion has focused on supply-chain vulnerability, it has become a cliché

to concede that “we focused too much on efficiency at the expense of resiliency,” as former World Trade Organization Director General Pascal Lamy told a recent conference sponsored by the oecd and the Open Markets Institute.

But the entire concept of efficiency is debased. As I pointed out in my 1996 book, Everything for Sale, there are three different kinds of efficiency— the efficiency of Adam Smith, based on supply and demand; the efficiency of Keynes, which countermands Smith when the entire economy is depressed; and the efficiency of Joseph Schumpeter, in which innovation is the source of dynamic growth over time. China, in its race to innovate and grow, ignores market price signals, as did the U.S. in wwii.

Further, the standard account of efficiency omits the multitrillion-dollar cost of catastrophes wrought by mistaken or corrupt market pricing, such as the crashes of 1929 and 2008, as well as climate change. It assumes no corruption, no market power, and no feedback loops between concentrated economic and political power to make the rules.

So the usual efficiency story is not just in need of trimming for the sake of resilience; it’s preposterous, and contradicted by history. It’s time to overthrow it—as we thought we had done once and for all after the Great Depression, Keynes, and Bretton Woods.

The postwar era facilitated benign economic nationalism for the U.S., Europe, and much of the global South. If Europe’s recovery program included nationalized banks and publicly owned companies, that was fine. If preference was given to domestic suppliers in order to create jobs, that was fine, too.

And if U.S. investment in Cold War technologies such as jet aviation, biotech, and computer networks had commercial spillovers, also fine. But somewhere along the way, diplomats addled

by Chicago economists and suborned by Wall Street lobbyists abandoned that original Third Way in favor of an absurd quest for perfect markets.

In the meantime, with no sense of contradiction, they made an exception for Chinese mercantilism, as long as bankers and corporations were cut in on the action. We need to reject that crusade, and modernize a 21stcentury version of the postwar social contract that allows plenty of space for national policy.

We could be quickly moving to electric power based entirely on renewables. But current market pricing signals too much purchasing of carbon-based fuels. Only by using regulations and subsidies can government quickly wean the economy from carbon in favor of an energy future that is not only cleaner but more cost-effective and more secure.

Markets often price things wrong. That’s why we have governments and democratic planning.

We need a national strategy to reclaim U.S. leadership in both the whole range of advanced manufacturing and green transition. Not incidentally, all of this creates technical learning and increases the local supply industry and good domestic jobs. The strategy is all of a piece. And, yes, it does violate orthodox (and discredited) myths about free markets and free trade. That’s also long overdue.

After the Crisis, Big Business Could Get Even Bigger The pandemic and its response thus far are perfectly designed to concentrate corporate power. But we don’t have to accept that.

By David Dayen

GR AEME SLOAN / SIPA USA / VIA AP IMAGES

IN 2017, 13,024 U.S. COMPANIES

merged, a record number. In the first six months of 2018, $2.5 trillion in merger deals were announced worldwide, a record value. New business formation is half of what it was in the 1970s.

In October 2018, researchers Gustavo Grullon, Yelena Larkin, and Roni Michaely identified increased market concentration in 75 percent of all industries over the past two decades.

But this period could soon look like a golden age of competition if the coronavirus crisis continues its heartbreaking trajectory.

We effectively stopped enforcing antitrust laws in the early 1980s, and markets predictably consolidated as a result, with drastic consequences for worker wages, innovation, entrepreneurship, inequality, and democracy itself. But those 40 years have not seen an accelerant like the Corona Depression could provide, handing over even more power to a select few.

Banks and financiers, already riding a wave of deregulation to record profits before the pandemic, will be primary beneficiaries. The entire retail sector is at risk, putting even more economic activity at the whim of a few executives. Alreadydominant platforms could find themselves in position to dominate like never before. And the post-corona economy could further transform who grows our food, who heals our ailments, and who tells us what’s happening in the world.

This doesn’t have to be the end of the story, however. Laws on the books intended to protect citizens from monopolies still exist, needing only sufficient political will to snap into action.

Our economy is poised to suffer the greatest shock of our lifetimes. But policymakers still set policy, and we all have the opportunity to affect who acts in our name. The extraordinary nature of this crisis, and the commu-

damaging, because of its disproportionate nature. The cares Act and follow-up legislation bifurcated relief between smaller and larger businesses.

Collectively, both bills send about $700 billion to the smallbusiness sector. But larger businesses have access to Federal Reserve credit facilities with about six and a half times as much in funding.

Plenty of outrage has been

The Justice Department can choose to protect citizens from monopolies.

nity it is building in the struggle in real time, could provide the necessary spark for a movement that demands democracy work for all of us. But it will take massive organizing and leadership to climb out of the deep hole the crisis will create.

MONTHS OF LOCKDOWNS WILL PRO-

duce economic carnage, and Congress’s current response could prove even more

expended on midsized restaurant chains and franchises and publicly traded companies grabbing forgivable small-business loans. But the Paycheck Protection Program’s forgivable loans are capped at $10 million, a minuscule fraction of what firms are liable to receive from the Fed. The first come, first served nature of the ppp pitted desperate businesses against one another, distracting from

the bailout’s real beneficiaries.

Furthermore, if the ppp had enough funding to meet demand, nobody would care about “undeserving” recipients at the margins. In its current form, the effort to save small businesses will simply not save very many. Only 5.7 percent of small businesses got aid in the first round of ppp loans; even fewer dollars are available for round two. Moreover, these loans are intended only to keep small businesses’ payrolls afloat for two months; few expect the economy to turn around completely in that time.

To the extent there was any real winner in the ppp, it was the banks, which earned $10 billion in ppp round one, and are in line for another $10 billion in round two, merely for substituting as processors for an overmatched Small Business Administration (see Alexander Sammon’s story in this issue). For small businesses, this temporary, underweight relief will not stop a rash of closures, destroying the fabric of local communities and ushering in the depressing uniformity of surviving chain stores. Though we mostly think of that in terms of local restaurants and the corner dry cleaner, countless niche manufacturers and exporters, startups, and service providers will be crushed, across every economic sector. Industries that managed to retain competition will see the low end vanish.

The Fed’s $4.5 trillion money cannon, by contrast, is robust enough to accommodate whoever needs to be nursed back

MAY/JUN 2020 THE AMERICAN PROSPECT 13

to health. Where you stand in America and in its pandemic response depends on where you already stood. Individuals desperate for survival aid must endure rickety systems and fend off private debt collectors; small businesses must fight one another for scarce funds; state and local governments are advised to give bankruptcy a spin. But the largest corporations in America enjoy concierge service, let inside the velvet rope and handed fistfuls of cash.

The Fed has set up a “Main Street” lending program, where your idea of Main Street must include companies with up to 10,000 employees. There are primary and secondary credit facilities ready to purchase virtually any manner of corporate debt, including exchange-traded funds exposed to the riskiest junk bonds. The Term AssetBacked Securities Loan Facility (talf) will slurp up securitized consumer and business loans, backed by auto payments, student debt, credit card arrears, corporate bonds, you name it. There’s a municipal-debt program that’s curiously more muted than the corporate facilities. It’s a short-term loan that localities will have to pay back, in contrast with the Fed taking underwater securities off bank and hedge fund books. And less than half of the money cannon has been loaded; the Fed’s balance sheet is expected to swell past $9 trillion, if you count the surge in liquidity for a host of credit markets.

Before one dollar was spent, the money cannon nailed its target: owners of capital. The Dow Jones Industrial Average rose nearly 6,000 points between March 23, the day before the Senate reached a deal on the cares Act that blessed the money cannon, and April 29. The mere announcement of corporate debt and junk bond purchases similarly served to reinflate asset prices, protecting the investor class. Bloomberg

14 WWW.PROSPECT.ORG MAY/JUN 2020

reported in early April on Citigroup enjoying a $100 million windfall from a single trade of commercial real estate loans.

Revenue-less Carnival Cruise Line was ready to tap hedge fund loan sharks for survival cash until the Fed opened the spigot on junk bond markets; Carnival raised $6 billion in cheaper loans within days.

Anything that helps traders also helps banks, already the recipients of deregulatory

in foreclosure profiteering and Hollywood producing—an unmatched combination of corporate sleaze—can as Treasury Secretary waive any condition at his personal whim.

Moreover, the Fed didn’t extend conditions to its bond purchases, meaning the downstream corporate beneficiaries of the relief have no strings attached. It took a herculean effort just to get the Fed to commit in late April to release the

Amazon’s corporate headquarters in Seattle

actions throughout Donald Trump’s term in office. The Fed has obliged further, scaling back bank examinations and removing capital requirements.

This sets the stage for increased risk and asset bubble formation, a secondary shock that could come amidst the coronavirus recovery.

The airline and aviation bailouts have a few concrete conditions; the Treasury Department is seeking minor equity stakes, for example. Every other company in line for low-interest loans has effectively no restrictions on the cash. Congress established a few guardrails, from holds on buybacks and dividends to payroll maintenance to executive compensation caps. But Steve Mnuchin, a mediocrity who has dabbled

names of the recipients of its largesse. Whether it will ensure the cannon supports people outside of Wall Street or the executive suites is another matter. At the moment, there is really nothing stopping a company from using bailout funds to pad stock prices while canning workers, outsourcing production, busting unions, and seizing the opportunity of a crushed small-business sector to buy up rivals and market share on the cheap.

This disconnection—where capital owners and large corporations get superior service, and everyone else gets screwed— cannot help but fuel corporate power. With small retailers mostly shuttered, big-box stores like Costco, Walmart, and Target have surged, along with e-commerce leviathan Amazon.

While 26 million people lost jobs in the first month of the crisis, the retail monopolists hired 500,000. Google and Apple are taking on governing functions, building a global contact tracing system for the cellphones they control.

About 36,000 journalists have lost their jobs during the crisis as of late April, as the news media continues to shrink.

The dichotomy of empty grocery shelves and massive dumping and bulldozing in the fields is the consequence of a concentrated food supply chain that cannot easily switch from commercial to consumer markets.

The disaster will likely knock out even more small players and entrench industrial agriculture further. Hospital collapses and disproportionate shares of aid going to large for-profit chains like hca are likely to narrow provider networks.

Even unlikely winners from the pandemic may not stay that way. To Zoom is now a verb, after the company’s easy-touse multi-user video chat service became ubiquitous. But Facebook created a knockoff within weeks, and Google’s version is expanding as well. Both platforms can leverage billions of existing users to crush the nascent competition.

The victory for our leading oligarchs is near-total. According to the Institute for Policy Studies, from March 18 to April 10, a time when tens of millions of Americans lost their jobs, U.S. billionaires saw their wealth increase by 9.3 percent.

Since January 1, eight billionaires have added at least another $1 billion to their bankrolls.

With mass starvation at the low end of the business chain, and a bounty of available support at the top, the power structure in America is fated to transform. But the path to a corporate state is not foreordained.

IT MAY NOT BE IMMEDIATELY OBVI-

ous, but not every outcome of

TOBY SCOT T / SOPA IMAGES / SIPA USA / VIA AP IMAGES

ThePost-CoronaWorld

the coronavirus crisis automatically favors monopolization and financialization. In many respects, it has revealed the need for more modest, more redundant, more resilient economic structures.

Big banks failed to pump out ppp loans at the level of their community bank counterparts, a high-profile display of ineptitude while the nation watched.

Loans, especially commercial loans, are what most people think of when they think of a bank. The Federal Reserve, for better or worse, is designed to push capital to banks in a crisis for them to lend out to the real economy. If the Fed is now lending directly to companies, because large money center banks are poorly managed for rapid lending and even disinclined to lend, and if non-banks and online banks and even community banks are better at this core function, a smart regulator might ask: What purpose do big banks really serve? And if so, why are we loosening regulations so they can take further risks and threaten the economy through their unproductive casino-gambling side hustles?

One of the biggest concerns after the crisis lifts is that the private equity industry, loaded with trillions in undeployed funds, could achieve dominance. After all, firms would have their pick of struggling businesses, with discounted deals and cheap credit helping them along. But recent purchases are now vastly overvalued, and the highly leveraged business model magnifies such losses. The industry is holding a bunch of bankrupt companies, shrinking assets that they cannot unload. Top firms may not make it to the other side where the bargains await.

Industrial agriculture cannot turn the battleship around fast enough to get food into people’s hands, another highprofile signal of incompetence.

Maybe we’re all better off with smaller processors where any

Policymakers can disallow a nation of monopolies, prevent Wall Street control, safeguard citizens and promote their welfare. single failure doesn’t threaten food supply chains. Local farms have adapted much more quickly, with an emphasis on community support agriculture (csa) and online ordering and delivery. The entire disaster of concentrated supply chains begs for a more self-reliant solution based on diverse domestic manufacturing.

Even Big Tech, seen as likely to amass more power postcrisis, won’t emerge unscathed.

Google and Facebook are really advertising companies, and the ad market has cratered enough to make them unsteady.

Google’s revenue rose in the first quarter of 2020, but mainly due to frontloaded ad sales in January; there was a “significant and sudden slowdown” in March, which should continue. Apple’s hardware sales are almost sure to drop given the global downturn, and its huge manufacturing bet on China has proved hazardous.

Amazon is supposed to be tech’s big winner, given that it sells physical goods in socially distanced fashion. Indeed, it has seen outsized demand, both in e-commerce sales and cloud computing (many of those Zoom calls run off Amazon Web Services). But like many in the crisis, Amazon is finding itself too big to manage. Prime orders are taking as long as a month, and the company discontinued nonessential sales for weeks, destroying third-party businesses. This fallback in convenience and selection contrasts with every single retailer in America being forced by circumstance to get smart about

delivery, putting millions of companies in direct competition with Amazon. Many will fade away, but not all, and it’s always going to be quicker to get a box of tissues or pet food delivered from down the street than from an Amazon warehouse.

With local delivery surging, Amazon, incredibly, may lose the loyalty of its customers.

Most of these hazards can be papered over with more bailout funds and hollowed-out competition, and that could happen.

But that’s where policymakers, the wild card in our post-corona world, can check in. They can choose laissez-faire bailouts, bystanding as America becomes unrecognizable. Or they can choose to act, to disallow a nation of monopolies, prevent Wall Street control, safeguard citizens and promote their welfare.

This would mean stopping any company receiving bailout funds from using them to merge with a rival. When the carnage shakes out, the Federal Trade Commission and the antitrust division of the Justice Department should undertake a critical review of key markets, with the presumption that any market share over a certain threshold must necessitate a breakup.

Robust grants and loans to small business throughout the recovery, so we don’t get the monopolization in the first place, would be critical. New rules on banks now exposed as useless to the real economy are critical, to fill in the gaps where Dodd-Frank fell short and arrest the trend toward bigness and risk that comes with

over-financialization. And we should outright eliminate private equity and hedge funds, so they cannot roll up the economy ever again.

I recognize that the track record for economic policy interventions is virtually nonexistent in recent memory. But this crisis is bigger and the stakes higher than ever before. And early signs are relatively promising. House Antitrust Subcommittee Chair David Cicilline (d-ri) proposed a ban on mergers throughout the pandemic’s duration, and Sen. Elizabeth Warren (d-ma) and Rep. Alexandria Ocasio-Cortez (d-ny) joined him. Cicilline and members of his antitrust subcommittee are questioning Amazon for committing perjury, after a Wall Street Journal article found that the company scraped data from its third-party sellers to devise competing products under its house brand, at odds with its sworn testimony.

The gradual construction of an anti-monopoly movement, inside and outside Congress, fits this moment. There are enough headlines of bad behavior to spur public outcry. Many investigations are proceeding at the state and federal level. Regulators and politicians, stuck at home and cut off from lobbyists, do not have to act like inert puppets, only ambulatory when corporate America pulls their strings. They can use existing tools to block mergers, to end market manipulation, to really prevent a takeover of modern society.

In the New Deal era, public anger forced experimentation and action from government rather than neglect and decay. We have that forcing event again.

Paul Starr, Harold Meyerson, Robert Kuttner, and David Dayen discuss the possibilities of the post-coronavirus world in a special podcast. You can listen to it at prospect.org/ post-corona-podcast.

MAY/JUN 2020 THE AMERICAN PROSPECT 15

THEBidenCAMPAIGN

In mid-April, Bernie Sand-

ers bowed to the inevitable and endorsed Joe Biden. By then, the Democratic left was well into its quadrennial search for culprits. The party establishment had undercut Sanders from the start; primary voters, fixated on “electability,” were excessively risk-averse; the field consolidated in unprecedented fashion after Biden took South Carolina; Elizabeth Warren, after succumbing to sexism, declined to endorse her fellow progressive.

None of this could distract from the fact that Biden was as far from a revolutionary as could be imagined. Throughout his upand-down-and-up campaign, the former vice president offered a message of restoration, not transformation, playing on nostalgia for a president who had spent six of his eight years in office hindered by a ruthless, unified opposition. Perhaps most worrying, Biden portrayed the Trump presidency as an “aberrant moment,” rather than the culmination of the ongoing radicalization of the Republican Party amid skyrocketing inequality.

Trump’s catastrophic response to the pandemic has made a Biden win in November look more probable (assuming a relatively free and fair election, which is far from assured). Yet it also makes the Biden Continued on page 25

The Progressive Pursuit of a Bolder Biden The former vice president has the profile of a successful candidate; now he needs the agenda of a successful president.

By Jacob S. Hacker

16 WWW.PROSPECT.ORG MAY/JUN 2020

Dr. Jekyll, or Mr. Biden?

The presidential hopeful has a choice to make: restoring the corporate centrism of the past, or attacking the stunning inequities highlighted by the coronavirus crisis.

By David Dayen

HENNY R AY ABR AMS, POOL / AP PHOTO

People tell you who they

are, and these days, they tell you on a podcast. Joe Biden’s interview series Here’s the Deal has earned some mockery in left circles as “the verbal equivalent of someone falling down a rocky hill.” But beyond the fractured syntax and low production values, you get real-time insight into how the presumptive Democratic presidential nominee understands the political moment.

And what you hear is a man at war with himself. Biden mostly defers to his guests: activists, advisers, and here and there a possible future Cabinet member or vicepresidential nominee. But he also whipsaws back and forth between the message he delivered throughout his campaign, the one that earned him the nomination, and a new narrative, hastily developed amid the catastrophe of the past couple of months.

To Ron Klain, former Ebola czar and likely White House chief of staff, Biden says that crisis response “should not be political.” To potential center-left running mates Gretchen Whitmer and Amy Klobuchar, he praises their capacity for bipartisanship, which he laments has “become a dirty word in our politics lately.”

But as the episodes have worn on, another Biden has emerged. He’ll note that it’s hard for Republicans (not just Donald Trump) to make government work, when they “have no respect for government to begin with.”

He’s discussed the coronavirus tragedy as

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holding up a mirror to the nation’s inability to soothe hardships borne by the working classes. “People are getting their eyes open,” he tells anti-poverty crusader Rev. Dr. William J. Barber ii. “No matter how well off you are, you’re better off if everybody’s better off.”

To Washington Gov. Jay Inslee, he enthusiastically embraced a moon-shot green stimulus package; to Barber, a suite of basic economic and social rights for all Americans.

No political figure comes up more than Franklin Delano Roosevelt, whom Biden repeatedly lauds. The longest episode of the first six features presidential historian Jon Meacham, who gave what amounted to a lecture on fdr’s leadership. “American history from 1933 to 2016,” Meacham tells Biden, can be seen as “a figurative conversation between fdr and Reagan. You were on a field that was marked off by Reagan on one end and fdr on the other.”

How a Biden presidency will proceed, and succeed, depends upon his placement on that field. Does he stay on the 50-yard line, splitting the difference between antigovernment conservatism and progressive populism, and cutting bipartisan deals?

Or does he surge toward the end zone with “Roosevelt” written on it, transforming the nation through “bold, persistent experimentation” that fills in all the cracks the coronavirus exposed?

A good reporter is supposed to supply a definitive answer. But I’ve talked to a dozen people inside the campaign and out, those with the ear of the president and those being wooed by his team, and it’s too soon to know how this will break. Not even Biden knows yet. Judging by his personal record, you could envision his presidency as another round of triangulating disappointment. Hopes over the campaign’s widespread outreach to progressive leaders and adoption of liberal policy planks are tempered by the presence of Larry Summers at economic-policy meetings.

But listen to one particular call-andresponse with Rev. Barber about the transformative power of this moment, and your confidence in the outcome may waver. “This pandemic [is] almost like the Great Depression, which allowed Roosevelt to do things that he hadn’t imagined doing prior to the Great Depression,” Barber explains. “Exact-

18 WWW.PROSPECT.ORG MAY/JUN 2020

ly,” Biden replies. “If we cannot guarantee health care for everyone and have a universal form of health care, and basic living wages and basic sick leave, we are missing the lesson of this moment,” Barber thunders. Biden responds, “Exactly right, and that’s why I think we can do it.”

You could argue that this was a practiced politician humoring an idealist. But the evidence we have from crises as profound as we face today is that the idealists force the politicians to dream bigger and reach higher.

HISTORIAN CHRISTOPHER Shaw’s 2019

book Money, Power, and the People narrowly focuses on banking policy in the Progressive and New Deal eras. But its value lies in giving voice to the forgotten public anger of the times, and how this moved the political system. The book reinforces the promise of democratic responsiveness, particularly in moments where the public is so brazenly robbed in broad daylight.

Organized by farmer and labor groups, populists channeled their outrage by envisioning a better world. “There can never be a permanent and secure prosperity,” noted National Farmers Union President John A. Simpson in 1932, “until we have destroyed the money power of the country.” Labor leader David Levine echoed this sentiment: “The Nation must own the Banks or the Banks will own the Nation.”

Aggressive demands amid banking panics and the speculative crash of 1929—most prominently, total nationalization of the financial system, with government control of credit and currency—scrambled policymakers. Sen. Carter Glass, a reactionary conservative Democrat from Virginia who operated largely as a stand-in for financial interests throughout his career, proposed the separation of commercial and investment banks, ostensibly to prevent rampant speculation, but also as a counter-offer to more wide-reaching reforms. “He was aware that there were lots of other radical proposals out there,” Shaw explains in an interview. “Investment bankers were being blamed for the entire Depression.”

One resolution out of West Virginia literally called for the beheading of any banker whose institution failed.

The Banking Act of 1933, like the establishment of the Federal Reserve Act before it, was a triumph of what Shaw calls “banking politics,” the collective action of a hostile yet organized constituency. The bank lobby initially opposed the Glass proposal outright; they eventually succumbed to it, along with much bigger political lifts like federal deposit insurance and removal from the gold standard, opting for survival instead of being tossed to the pitchforks.

In other words, what we now know as Glass-Steagall (Henry Steagall, a Democrat from Alabama, was Glass’s House counterpart on the legislation) was a compromise measure, not the liberal wish-list item we think of today. Co-author Carter Glass was not a progressive hero but a Wall Street stooge, forced by circumstance into devising one of the most effective reforms in American financial history. Shaw credits the farmer and labor agitators, “this vibrant and rich force serving as a counterweight to the bankers,” for making the impossible possible.

This is a familiar trajectory in moments of crisis. From the Black Death to the Spanish f lu, pandemics have coincided with overthrown power systems and reduced inequality. The Depression didn’t reorder just the financial system but numerous elements of society. World wars and economic collapses leave mass public need in their wake, and the ensuing outcry can spur big changes to fill those needs, permanently.

Franklin Roosevelt’s interventions into

The evidence we have from crises is that the idealists force the politicians to dream bigger and reach higher.

PREVIOUS SPREAD: DODD, SANDERS, BILL CL ARK, SUMMERS, J. SCOT T APPLEWHITE / AP PHOTO

THEBidenCAMPAIGN

Desperation during the Depression triggered public anger that forced politicians to respond to their needs.

AP PHOTO

oligarchic power set the stage for a halfcentury of prosperity and security. But it was not obvious that this patrician would become a hero of the downtrodden. Roosevelt ran against Herbert Hoover in 1932 promising to balance the budget. But the state of the country, the 25 percent unemployment, the human desperation, weighed on his decision-making. “New conditions,” Roosevelt would say in 1933, “impose new requirements upon government and those who conduct government.”

THE CIRCUMSTANCES NOW exist for a potential replay of the New Deal dynamic: relentless economic carnage, a restive population given to rage, an overmatched Republican rapidly losing his grip on power, and a Democratic challenger with none of the attributes expected in a revolutionary.

Can Joe Biden rise to meet the moment as Franklin Roosevelt did?

A reasonable reading of Biden’s career, from his 1973 Senate swearing-in until the day of the first confirmed U.S. case of

covid-19, would suggest that he has quite a journey ahead of him. Throughout his Senate days, Biden would oddly insist that Delaware was on the Confederacy’s side in the Civil War. It’s not true, but it speaks to Biden’s conception of the place he represented for 36 years. He seemed to consider himself a Southern-state senator.

To some degree, this informs his old position on busing, his office’s press release in 1998 touting him as “one of the top five conservative Democrats,” and his repeated runs at Social Security benefits in the name of fiscal responsibility. It informs his 1990sera belief that Clintonian Third Way politics were the only path to Democratic success.

The South is a more conservative place, and a self-styled Southern Democrat acts accordingly. Add to that the dominating influence of Delaware’s banking industry, and you understand how Biden could marry hawkish foreign policy, tough-on-crime rhetoric, and fiscal stinginess with support for financial deregulation, in particular, raising hurdles for poor people to access bankruptcy.

Despite leaving the clutches of Delaware politics when becoming vice president, Biden still cut bad deals with Mitch McConnell, one that kept nearly all of the Bush tax cuts intact. He ran in three presidential campaigns as a moderate, doing little to challenge or subvert party orthodoxy.

Yet Biden also started his political career on the New Castle County Council fighting oil polluters and suburban sprawl, while boosting public-housing construction. He won his Senate seat in 1972 on a platform of removing ground troops from Vietnam, protecting environmental wetlands, expanding cost-of-living increases for Social Security, raising taxes on millionaires and corporations, and supporting labor unions. Many of those planks are in his 2020 platform. And his moments of social progressivism, from writing the Violence Against Women Act to getting ahead of President Obama on same-sex marriage, should be part of his story as well.

The four decades after the McGovern defeat in 1972 saw a rightward drift within

MAY/JUN 2020 THE AMERICAN PROSPECT 19

THEBidenCAMPAIGN the Democratic Party, and Biden was all too willing to drift with it. But he also has the capacity to drift back, and reflect the party he wants to lead. “The wonk class is more liberal than it was five, ten, fifteen years ago,” notes Sean McElwee of Data for Progress, who has had discussions with the Biden campaign. “[Hillary] Clinton was very wonkish, she had pretty strong opinions about policy that Biden doesn’t have.”

Biden, if nothing else, is a mainstream Democrat. He has habitually positioned himself in the center of the caucus, wherever that center moves. In the neoliberal and neoconservative eras, he obliged. In a more progressive era, particularly a time of crisis that demands activist government, he can do the same.

As a 2020 candidate, Biden made halfsteps in this direction. While going beyond where he or even Barack Obama was in 2008, his health care, climate, and education policies were all underweighted by design, to set contrasts with the Sanders left. He rejected Medicare for All, free public colleges, student debt cancellation, and phasing out fossil fuel emissions by 2030.

By contrast, his labor proposals have earned

high marks, particularly for holding corporate executives personally liable for union busting. He’s proposed scaling up Germanstyle subsidized work sharing. He endorsed Social Security expansion. And he wants to roll back nearly all of the Trump tax cuts.

In the 2020 primaries, Biden downplayed his policy agenda, sticking to a core message of ridding the nation of the Trump cancer and returning to the halcyon days of bipartisan compromise. The effective close of the primaries after a series of Biden wins in March, however, coincided with a deadly pandemic that has claimed the lives of tens of thousands of Americans. And nothing in the country, or the Biden campaign, has been quite the same since.

BERNIE SANDERS dropped out of the presi-

dential race on April 8. Like every presidential nominee in recent memory except for Donald Trump, Biden reacted warmly.

“Senator Sanders and his supporters have changed the dialogue in America. Issues which had been given little attention—or little hope of ever passing—are now at the center of the political debate,” Biden said in a statement, highlighting topics like income

inequality, universal health care, free public college, student debt relief, and the climate emergency. “And while Bernie and I may not agree on how we might get there, we agree on the ultimate goal for these issues and many more.”

But Biden went beyond the usual celebratory elegy to a vanquished foe. He stressed the “enormous fear and pain and loss being felt all across the country.” After the principal work of ending the public-health crisis and ensuring people’s basic survival, Biden added: “We also need to take a hard look at what we need to fix and change in this country. Many of the biggest cracks in the social safety net have been laid bare … We will need to address these.”

We’ve all been seeing what Biden has, the kinds of spectacles that fuel populist fury.

Miles-long lines of cars snaking around food banks just a few weeks after lockdowns, a testament to the precarity large segments of the population live with. Shortages in groceries and hospitals revealing breakdowns in supply chains and just-in-time logistics.

States and the federal government fighting over basic medical supplies as pricegougers profit. Black Americans dying at

ELISE AMENDOL A / AP PHOTO

.Since the pandemic, Biden has sounded more Sanders-like, urging fixes to “cracks in the social safety net.”

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“The magnitude of the pandemic is so huge that there’s no way you can’t see these giant problems ... everybody’s a socialist during a pandemic.” much higher rates than white counterparts, reflecting their existing health risks and societal inequities. Rural families cut off from society because they lack access to broadband internet. The lack of national paid sick leave forcing newly “essential” workers, many making minimum wage, to choose between a paycheck and their health. Over 150 workplace strikes protesting hazardous conditions, and cartoonishly villainous retaliation against organizers.

Reports of banks stealing stimulus checks to pay off debts. Chain restaurants and Fortune 500 companies grabbing so-called “small business” loans. The investor class saved by guaranteed Federal Reserve support, leading to the stock market having its best April in decades amid the highest unemployment in nearly a century. Tonedeaf celebrities Instagramming about difficult quarantines in mansions or yachts, while millions struggle to find food.

A day before Biden’s speech, the Financial Times released an out-of-character editorial demanding “radical reforms” sufficient to “revers[e] the prevailing policy direction of the last four decades,” a shot at the neoliberal consensus. Serious discussions were being held about the end of globalization and the urgency of decoupling manufacturing away from China. There

was a broad sense that the virus was provoking a serious reckoning about the state of the nation.

“The magnitude of this pandemic is so huge that there’s no way you can’t see these giant problems,” says Alex Lawson, a progressive leader with Social Security Works.

And no tax-advantaged savings program or enterprise zone is likely to pull the nation from the tailspin. “The idea we can leave things to the miracle of the markets is just a fraud,” Lawson notes. “Everybody’s a socialist during a pandemic.”

Biden repeated these themes of how the crisis exposed the need for structural changes throughout April, broadening the critique to denounce corporate greed and worker deprivation. Maybe it was an extension of his party unification strategy. By this point, his campaign had spent several weeks in talks with Sanders officials, top progressive politicians like Rep. Alexandria Ocasio-Cortez (d-ny), and movement leaders, from established organizations like MoveOn and Planned Parenthood to younger groups like the Sunrise Movement and Indivisible. Three high-level staffers have led the talks: policy director Stef Feldman, and senior advisers Symone Sanders and Cristóbal Alex. All three had roots in climate policy, voting rights, and other progressive issues, and links to many of the figures they were courting.

Democratic campaign veterans have been impressed with the depth of the outreach.

Symone Sanders, who was national press secretary for Bernie Sanders’s presidential campaign in 2016, told me in an interview, “The approach is straightforward. This is where we are, tell us about your plans, and where do we align? … When it comes to working with organizations, they find they have more in common with the vice president than they think.”

The practical need for this flows from Biden’s underwhelming performance with voters under 45, and the imperative of bringing them into the fold in November.

There’s also a recognition that, even before the coronavirus, the policy energy within the party has been ceded to the left. Biden seems to understand that if he wants to lead the party as it’s constructed today, he

must bring in progressives, and give them real responsibility to help set the agenda.

Instead of pivoting to the center to capture the middle for the general election, the campaign has pivoted, if modestly, to the left. Biden endorsed lowering the Medicare eligibility age to 60 and forgiving student debt for lower-income graduates, as well as an immediate $10,000 forgiveness for everyone during the pandemic. He also endorsed Elizabeth Warren’s bankruptcy plan, after spending a decade in the Senate on the opposite side of the debate, and a variant of the Sanders/Warren plan for free public college (means-tested for families earning up to $125,000 a year).

Those minor shifts accompany much broader goals to respond to what the pandemic has laid bare. Biden and his advisers have proposed immediate boosts to Social Security, added worker protections, paid sick leave, and expanded (and possibly federalized) unemployment insurance. His recent proposal for Black America invests in minority-owned businesses and impoverished communities of color.

Three of Biden’s policy advisers stressed to me that manufacturing changes to increase domestic capacity and remove the hidden risk from broken supply chains were vital. “We can never again be in the position we are in right now,” said policy director Stef Feldman. “We need to do everything in government’s power to make sure of that, including addressing the supply chain.”

Some progressives are wary but recognize the opportunity. “We’ve sent them what we think they need to do for a second bite of the apple on climate,” said Julian Brave NoiseCat of Data for Progress. “A whole bunch of assumptions that felt fairly safe as trends in politics are being upended in weird ways.”

In an interview with Politico’s Michael Grunwald, Biden sounded like the firebreathing liberal he spent the campaign trying to oppose. He expressed support for trillions of dollars for green infrastructure, from mass transit to electric-vehicle charging stations, while condemning big banks for favoring bigger businesses with lending relief after “this is the second time we bailed their asses out.” He denounced corporate

MAY/JUN 2020 THE AMERICAN PROSPECT 21

THEBidenCAMPAIGN greed and reiterated the need for big change.

“I think there’s going to be a willingness to fix some of the institutional inequities that have existed for a long time … Milton Friedman isn’t running the show anymore.”

But that begs one crucial question—who is running the show?

IN LATE APRIL, BIDEN announced that Ted Kaufman would lead his transition team.

Kaufman, Biden’s longtime chief of staff, succeeded him in the Senate after he won the vice presidency in 2008. In a remarkable two-year run, aided by the fact that Kaufman would never face re-election in Delaware, Kaufman charged after the financial industry, seeking size caps on the largest banks, urging reform of high-frequency trading, and pressing Obama’s law enforcement team on why no bank executive was being indicted for the mountain of fraud perpetrated during the housing bubble. For many, the hopes of Biden’s capacity for bold policy ambitions on a national stage lie with Kaufman.

“The coronavirus has exposed many problems that the vice president and I have been concerned about for a long time, that he can help solve,” Kaufman told me in an interview. He was somewhat circumspect, ever mindful of what the political system and the makeup of Congress will bear. But what he did stress repeatedly was the need for the right personnel to turn promises into reality.

“If you have the Democrats on the sec that Biden will appoint, the sec will be a lot different place,” Kaufman said. “If you have the right Secretary, the Treasury Department will be a different place.”

This is particularly true with Biden, who can sound like a firebrand or a bipartisan conciliator depending on who he’s in the room with. He is a big-picture politician who leaves the details to associates. His penchant for delegating responsibilities and lack of a fixed ideology make decisions on personnel—who will have significant discretion to aggressively advance a president’s policies—that much more important.

Progressives have taken up the rallying cry of “personnel is policy,” as they did during Hillary Clinton’s nomination in 2016.

“The people who serve your presidential transition team will shape the future of your

22 WWW.PROSPECT.ORG MAY/JUN 2020

administration,” opens a letter to Biden that several progressive groups signed on to.

The letter asked Biden to reject corporate lobbyists and industry executives, instead opting for people with the public interest at heart. Biden’s campaign has talked about an executive branch that “looks like America,” but the groups urged an embrace of diversity in all its forms, including diversity of experience and perspective, outside the Beltway and the corporate boardroom. A separate letter from youth leaders highlights appointments as well.

Personnel “is the clearest way [Biden] can signal that there is no business as usual,” Alex Lawson says. “No Wall Street bankers in charge of Wall Street. No pharma bros in charge of pharma.”

On his podcast, Biden told Jon Meacham that he valued expertise, arguing that as president, you should be “willing to surround yourself with people with skills you don’t have.” But advisers stressed that Biden also puts a premium on life experience. “You need people in office who understand what happens to people when they lose their job,” Kaufman says.

But expertise, especially on economic issues, is never neutral. The campaign record, thus far, has been decidedly mixed.

Biden 2020 didn’t have much of a policy team, incredibly enough. But he was powered by a litany of special-interest backers in fundraising. Biden’s first campaign event was held at the home of David Cohen, a top Comcast executive. The skeleton staff he had featured Steve Ricchetti, who founded a lobbying firm for health care and other corporate clients, and Bruce Reed, literally the head of the Democratic Leadership Council, the primary Clintonite policy organization for two decades.

The first set of potential Cabinet selections floated by the Biden campaign included both Wall Street foe Warren and JPMorgan Chase ceo Jamie Dimon for Treasury Secretary (donors later added BlackRock ceo Larry Fink, one of the most powerful people on Wall Street). Mega-billionaire Mike Bloomberg, Morgan Stanley executive Tom Nides, and Bank of America Vice Chair Anne Finucane were also on the list, along with Ricchetti. The campaign later

called the list “fantasy football for politics” and disavowed it as “laughable speculation.”

To guide his vice-presidential selection, Biden chose longtime aide Cynthia Hogan, L.A. Mayor Eric Garcetti, centrist Delaware Congresswoman Lisa Blunt Rochester, and former Senate colleague Chris Dodd. The Dodd selection was an unfortunate reminder of a Mad Men era on Capitol Hill that is the last thing a presidential candidate accused of sexual assault needs. But Dodd was also partially responsible for denying Elizabeth Warren a shot at running the Consumer Financial Protection Bureau.

When Bernie Sanders endorsed Biden on April 13, the two campaigns promised joint “task forces,” with members of both staffs working on key policy issues like immigration, climate change, and economic justice.

A few weeks in, those task forces were not formed, as Biden’s campaign confirmed.

Instead, Biden explained on one of his Here’s the Deal podcasts, the main policy activity is happening through two daily briefings, one with public-health advisers and another with the economic team.

There are a few progressive voices on that economic team, including Biden’s former economic adviser Jared Bernstein, former Consumer Financial Protection Bureau Director

Biden’s lack of a fixed ideology makes personnel— who will have significant discretion to aggressively advance policies— that much more important.

TOM WILLIAMS/ROLL CALL VIA GET T Y IMAGES) (CQ ROLL CALL / VIA AP IMAGES

Former Biden chief of staff and senator Ted Kaufman (right) is leading the candidate’s presidential transition team.

Richard Cordray, and Heather Boushey of the Washington Center for Equitable Growth.

Kaufman’s elevation as transition director gives hope that more progressives will be seeded throughout the campaign.

But Biden’s team was tight-lipped about who else attended the briefings. Finally, word got out that Larry Summers, an avatar of Clinton-era triangulation and fealty to Wall Street who has been flitting around the corridors of Democratic power for nearly 30 years, was sitting in on the calls. The Prospect has learned that two Summers allies, co-author Natasha Sarin and Obama White House and Hamilton Project veteran Adam Looney, were also brought into the campaign.

No force has been more responsible for Democratic enthusiasm for financial deregulation, corporate outsourcing, climate neglect, fiscal austerity, and privatization of public assets than Summers. His miscalculations have had tragic consequences, from shutting down oversight of derivatives in the Clinton years to lowballing the Great Recession stimulus while giving priority to reflating bank assets over saving homeowners under Obama. Wherever Democrats took a wrong turn in the last three decades, Summers was at the wheel.

At best, you have a team of rivals: Summers and his protégés battling progressives on the inside. But Summers, a consummate bureaucratic infighter, knows how to charm powerful people, and ensure they support his positions. He looms larger than merely someone in the mix on conference calls, especially given his ties to those with experience in past White Houses.

The Summers news damages everything Biden has done to prove to progressives that his presidency will be transformative. Summers has already denounced the wealth tax in ways that suggest waning interest in progressive taxation in general: The rich were “smart enough to accumulate it in the first place,” he told one forum last year. The great labor proposal Biden has assembled will not survive contact with an economic team that values investors and financiers. Summers’s presence does not inspire confidence in the forthcoming agenda, unless you work in the financial industry, in which case you’re breathing a sigh of relief.

Progressive commentators have denounced Summers, and Justice Democrats and the Sunrise Movement have called on Biden to remove him from the economic-policy team, saying that “the trust of our genera-

tion” was at stake. Biden’s campaign insists that the policy staff is a “well-rounded informal network,” and that the candidate will have “the most progressive agenda of any president in generations.” But platforms matter less than the people tasked to carry them out. With signals in both directions, the case for Biden as a progressive president comes down to what he really wants to do with the job.

WHAT COMES ACROSS in discussions with

Biden staff and advisers is that he wants government to work. He took public transit to work every day for 40-plus years and he wants those trains to run on time, across the government. His pandemic response recommendations focus mostly on how to get the money out to families and small businesses quickly. In public comments, he beams with pride about shepherding the 2009 stimulus package and keeping it free of fraud. And he reserves his anger for Trump’s mismanagement of government, his lifelong avocation. Lack of oversight leads to robbery, and Biden seethes at that irresponsibility.

Amid this crisis, an emphasis on good government and competence could lead to transformations that in other contexts may be seen as radical. “The idea that our system

MAY/JUN 2020 THE AMERICAN PROSPECT 23

THEBidenCAMPAIGN has underperformed along so many critical dimensions is precisely the sort of things that he cares about,” says Jared Bernstein, who served as Biden’s chief economist when he was vice president. “This is the more granular retail politician side of Biden, he just really thinks that programs should work. He was always incensed by that.”

There’s a progressive critique that maintains that neoliberal policy prescriptions, though sometimes premised on making government more efficient, actually cause breakdowns in governmental capacity.

Outsourcing and privatization created the choppy response to the pandemic; underfunded priorities like state unemployment insurance systems and the Small Business Administration cannot keep up with sudden demand. Faith in free markets to serve every need falls aground amid the emptiness of the national stockpile for medical supplies, or the lack of health insurance for every American during a disease outbreak. Belief in self-regulation leaves workers unprotected from workplace hazards, and leaves regulators outgunned by corporate giants. So-called “fiscal responsibility” hollowed out the functions of government across all levels.

A Biden presidency that seeks to make government functional will simply have to take on these sacred cows. Wanting taxpayers to get their money’s worth out of government should mean ending costly privatization that has proven ineffective in the crisis. Meeting market failures like supply-chain chaos with a competent response should mean reinvigorating industrial policy. “We cannot depend on far-flung supply chains for important goods when they are vulnerable to supply shocks,” says Bernstein, who as Biden’s chief economist was often detailed to meetings to stand up for the manufacturing sector. Recognizing the importance of Keynesian spending in a crisis should mean rejecting the forces of austerity when they emerge. And if the point is to make the economy functional for everyone, you’re going to have to do a series of critical policy interventions.

We’re watching in real time what distracted, unmotivated, indifferent, and corrupted governance looks like, at the worst possible

24 WWW.PROSPECT.ORG MAY/JUN 2020

moment. If Biden wants to be defined by the opposite, he must fund government, allow it to act, and make it impenetrable to the inevitable attacks and attempts at capture from the business sector.

There’s no guarantee that a presidency predicated on government functionality becomes transformatively progressive. Bill Clinton charged his vice president with “reinventing government,” in line with ideological preferences toward outsourcing and some forms of deregulation. Obama frequently stated that he was only interested in “what works,” and then his economic advisers defined what works as the mild technocratic tweaks that restored the financial system after it collapsed.

But even the financial crash fails to compare to what the next man to take the oath of office will face, and what the street will demand. What is sometimes derided as the “professional left” has yet to find its voice in the crisis. But in catastrophe, leaders tend to sprout organically. Alex Lawson of Social Security Works finds historical precedent in retired physician Francis Townsend, who called for a monthly pension of $150 or more in a 1933 letter to the Long Beach PressTelegram. Within two years, thousands of “Townsend clubs” sprang up around the nation, and their namesake delivered a petition of support for old-age insurance to fdr, a miracle in the pre-internet age. Roosevelt got Congress to agree on a weaker version of the Townsend plan, which we now know as Social Security.

“The reason why that worked wasn’t that Townsend said, ‘I’m going to do this,’” Lawson maintains. “Things were so bad that something needed to happen. I just think it will be a very real, citizen-led populist push for big changes, not because we want to be fair to everybody, but because we have to do this.”

Regardless of the demands from the outside, the man who makes the decisions must determine whether to cede to them.

Biden is a bundle of contradictions on this front. He wants government to work but until recently did not espouse policies that would hit that mark. He has pivoted to the left but isn’t loyal to any one premise about how to govern, conforming his beliefs to

Amid the pandemic, an emphasis on good government and competence could lead to transformations that in other contexts may be seen as radical. whatever he finds politically necessary. He seems inspired by the pandemic to make big changes, but retains policy advisers who live to shoot such ambitions down.

And then there’s Joe Biden the man. fdr was barely 50 when he rose to the presidency, and altered his goals in response to the Depression. Biden will be 77, with a lifetime of narrow policy thinking that never signaled a reformation. It’s asking a lot of him to grow into a radical in office. And yet events may give him no choice.

The answer to this question—Dr. Jekyll or Mr. Biden—could determine whether he is seen as a hiccup on the road to authoritarian fascism, or the leader at the moment America changed course and decided to protect the least of its citizens. The presidential race is likely to be a referendum on Donald Trump’s handling of the public-health emergency and the subsequent economic depression; how Biden campaigns may only matter at the margins. A Biden presidency, however, would be a hinge point in history, and the choices he makes will have worldhistorical impact.

The public can and will make their demands known, and give politicians few avenues of escape. But in the end, it’s really up to one man, and the presidency he decides to create.

RICK BOWMER / AP PHOTO

Long queues at food banks mirror Depression-era breadlines, and demonstrate the challenges facing the next president.

Continued from page 16 agenda look more timid. covid-19 has laid bare the inequalities, insecurities, and collapse of effective governance caused by the long slide of the gop toward what Paul Pierson and I call “plutocratic populism,” a poisonous mix of upward redistribution and ethno-nationalist resentment. In its wake, we need more than ever a Democratic leader who is clear-eyed about the nature of the problem and the immense changes needed to tackle it.

In short, we need a stronger Biden candidacy. Can we get one? And what would it look like?

OF ALL THE COMFORTING half-truths that

progressives are now telling themselves, the most reassuring is that the pandemic handed Biden the nomination. It’s true that the crisis ended the contest, but Biden already enjoyed a nearly insurmountable lead. More

important, his advantages were clear to America’s smartest political analysis well before then.

Indeed, the most trenchant exploration of the party’s internecine battle was published when Sanders was leading the race: E.J. Dionne’s Code Red: How Progressives and Moderates Can Unite to Save Our Country. A past Prospect contributor and one of America’s best public intellectuals, Dionne has repeatedly displayed a keen sense of timing: His breakout book, Why Americans Hate Politics, appeared amid the 1991 recession, as Bill Clinton channeled backlash against George H.W. Bush into the closure of 12 years of gop rule.

Dionne’s latest book arrived this February at a similarly opportune moment—just in time to catch the fall of despairing progressives. Though admirably fair-minded, Code Red reminds readers that moderates like Biden have two formidable advantag-

es: They win elections, and they get things done. Moreover, Dionne points out, they tend to co-opt the ideas of progressives.

After reading his balanced discussion of the 2018 midterms and crowded 2020 field, it’s hard not to conclude that a candidate like Biden was likely to be the party’s standardbearer and that such a candidate would likely end up positioned well to the left of recent Democratic nominees.

These expectations are bearing out. As David Dayen writes in this issue, Biden— now the virtually certain nominee—has been reaching out to progressives and pivoting left on several important fronts. But, as Dionne’s analysis also makes clear, the challenges that Biden will face as president will fall far outside his comfort zone as a conciliator and dealmaker.

When Biden entered the race, he warned, “If we give Donald Trump eight years in the White House, he will forever and funda-

MAY/JUN 2020 THE AMERICAN PROSPECT 25

THEBidenCAMPAIGN mentally alter the character of this nation.”

That’s true, which is why the fight will be so ugly. But the converse isn’t: Defeating Trump will not defeat Trumpism. Trump is an outgrowth and intensifier of the longterm shift of the gop to the right, and the conditions that gave rise to his presidency (particularly America’s runaway inequality) will not disappear with him. Republicans have so radicalized over the last quartercentury that reform will be fiercely partisan before it has any chance of being bipartisan.

If Democrats are fortunate enough to hold effective power again, they will need to use it aggressively to create a fairer economy and more vibrant democracy—or risk losing both in the future.

BIDEN’S HISTORY IS complicated. On foreign policy, he’s hawkish but also multilateralist. On economic policy, he’s backed bad ideas (bankruptcy “reform,” financial deregulation, a balanced-budget amendment) but also displayed a strong pro-labor streak. Two of the nation’s best progressive economic thinkers, Jared Bernstein (who worked for Biden when he was vice president) and Larry Mishel, have praised Biden’s labor agenda and vouched for his commitment to economic reform.

In general, Biden does not seem particularly ideological—comfortably placing himself near the center of his party wherever it happens to be at the moment. He’s into process and people, not policy, which helps explain why his most successful policy foray to date was his able management of Obama’s economic recovery package.

His most powerful moments during the campaign also have a process-and-people feel—for instance, when he’s spoken about how government can be an ally of everyday Americans when leaders come together despite their differences.

But Biden’s familiar world of cross-partisan cooperation is gone, and it won’t come back absent a fundamental shift in the balance of partisan and economic power, as well as a serious rehabilitation of government capacity. Does Biden recognize this?

His overtures to Warren and Sanders—free public college for less-aff luent families; endorsement of Warren’s bankruptcy bill;

26 WWW.PROSPECT.ORG MAY/JUN 2020

opening up Medicare to Americans aged 60 and up—suggest he might. So too his most recent statements in response to the pandemic. At a virtual town hall in midApril, Biden’s opening remarks went explicitly beyond his prior restorationist rhetoric.

“When we get through this crisis, we’re going to have an enormous amount of work to do. Not just to rebuild our country, but to transform it,” Biden said, leaning in to the urgency of the moment. “To make the investments we’ve needed to make for so long for our workers. To create a more just and more fair economy, where everyone has the opportunity to build a middle-class life for their families. To make sure everyone in this country earns a living wage and is treated with dignity and respect they deserve.”

Finally, it’s worth noting that despite his long status as a front-runner, Biden has run his campaign until now with a skeletal policy staff, and he is rapidly bringing on expats from rival camps—including those of Warren and Sanders. There’s good reason to believe that many of them will argue the current crisis calls for a much more robust agenda of political and economic reform. Whether they’ll carry the day will depend, in part, on whether progressives outside the campaign—who mobilized behind Sanders and Warren and who have shown that their vision can inspire the next generation of activists and leaders—reinforce the case.

WHAT WOULD A successful marriage of moderate and progressive ideals look like?

At a minimum, it would cast the challenge appropriately. In Code Red, Dionne argues that progressivism’s biggest contribution has been a vision that goes beyond what may be immediately possible, a picture of a better society that seems out of reach until committed reformers bring it into focus.

Neither fdr nor lbj looked like progressive champions when they ran for or ascended to the presidency. They responded to tireless, visionary advocates within government like Robert Wagner and Adam Clayton Powell Jr., as well as the pressures of outside movements.

Dionne suggests a rough division of

labor: Progressives lay out the ends, moderates figure out how to pursue these goals in realistic ways, and progressives bring constant outside pressure on the political system to aim higher. He thinks that progressives have won the debate over structural change: It’s now clear that we need to restructure our economy fundamentally.

He also thinks that three of the progressive breakthroughs of the past decade—the convergence on Medicare expansion as the route to affordable health care for all; the idea that we need steeply higher taxes on the rich, perhaps through a wealth tax; and the Green New Deal—all fit within this division of labor, with progressives lighting the path for moderates who will find workable intermediate steps.

This is easier said than done. In my own work on health care, for example, I have argued for using the public option as a means for gradually expanding Medicare to a much larger share of Americans.

I’ve also emphasized that a public option must be designed to ensure that universality and cost control are baked in from the start. Biden has made the same sorts of arguments. Yet his public option, while a big step forward, fails to achieve universal coverage—a tragedy given the health insecurity revealed and intensified by the pandemic. It also lacks most of the necessary cost-containment measures. Presumably his advisers were wary of using the power of government to restrain prices or auto-enroll (and require income-based premiums from) those without alternative coverage. But without advocating for these measures, there’s no chance they’ll happen. Biden’s health plan doesn’t embody a division of labor so much as a difference in priorities: an unwillingness to take (modest) political risks to set the nation down the right path.

The one real weakness of Dionne’s prescriptions—and, coincidentally, of Biden’s, too—is the lack of serious attention to the politics of power-building. As a number of astute political scientists have shown (most notably, Alexander Hertel-Fernandez of Columbia University), the right has focused its institutional and policy choices on weakening the left. Republicans consistently and

Neither FDR nor LBJ looked like progressive champions when they ran for or ascended to the presidency. relentlessly pursue power-aggrandizing measures whenever they manage to obtain the slightest legislative majority—measures like weakening unions, manipulating elections, limiting access to voting, starving government coffers, stacking the courts in favor of business power, and injecting more money into politics.

What are the Democratic equivalents?

Historically, building union power, but recent Democrats in the White House have put this goal way down the list. Even big public policies have been designed in ways that undercut Democrats’ capacity to create supportive constituencies. The payroll tax cut in the 2009 recovery package, for example, was specifically designed to be unnoticed (it was), and the Affordable Care Act, for all its strengths, did much less to provide visible benefits to a substantial swath of Americans than it could have. If the next Democrat in the White House follows the same script, progressives will find themselves locked out of governance with weakened allies once again—this time perhaps for good.

THE PARTY’S MOST savvy thinker on the topic of power-building is surely Elizabeth Warren. Her “transition” plan to Medicare for All—really, a robust public option designed to create political momentum toward a universal Medicare program— emerged too late to protect her from moderate attacks and journalistic skepticism.

But while more ambitious than anything

Biden is likely to endorse, it was visionary in thinking through how initial steps could create momentum for future progress toward a system comparable to those of other wealthy democracies.

Similarly, Warren’s thinking about how to restructure corporate governance to ensure worker representation, her policies for building labor power, and her wealth tax all make explicit that discouraging large concentrations of economic power can provide huge tangible benefits to most Americans. What unites these proposals isn’t that they’re well thought out, though they are; it’s that they see policy primarily as a vehicle for changing the balance of power.

One of Warren’s favorite sayings is that “personnel is policy,” and given the divisions within the Democratic Party, that’s more true today than ever. Obama surrounded himself with many of the familiar faces within the party’s policy circles who had contributed to the neglect of labor, the dismissal of vital progressive goals like paid family leave, and the catastrophic deregulation of finance. Looking at federal economic policy, the political scientist Patrick O’Brien has shown that personnel choices—whether presidents have the latitude and willingness to bring in advisers and officials who break with the party’s past—are often more important than popular support or margins in Congress when it comes to creating lasting legacies. He tells the story of Obama asking Tim Geithner to draw up a plan for nationalizing the banks amid the financial crisis, and Geithner temporizing and deflecting the president until he dropped the request.

The current fixation on the former vp’s vp pick is understandable, but also woefully incomplete. It is the president’s close advisers and key Cabinet officials who are most crucial. In these pages, Bob Kuttner has produced a “do-not-reappoint list” that should be heeded by anyone who cares about progressive economic policy. For the “do-appoint list,” progressive groups should be insisting on the inclusion not just of people of color and women, but of people who understand that political and economic reform is a prerequisite for policy success.

Especially given the pressure on Biden to

name his top advisers early, the time for such advocacy is now.

Indeed, the debate over Biden’s running mate has highlighted a risk that Dionne’s book deftly engages: the confusion of descriptive and substantive representation. The central reality of American politics today is that Trump and his allies use racial, ethnic, and gender backlash to retain the loyalty of voters they are abandoning economically.

Democrats need to call this out, as Ian Haney López has argued in his recent book Merge Left: Fusing Race and Class, Winning Elections, and Saving America. But they also need to offer a program that shows what true populism really looks like. The long-term challenge for Democrats isn’t just to win back working-class whites. It’s also how to forge a coalition of upscale white professionals and less-affluent nonwhite voters on grounds that recognize the many ways in which the latter have been left out of the economic gains and policy aims of the former.

If the pandemic has had any salutary effects beyond making Trump’s defeat more likely, it is that it has highlighted the bonds that unite all Americans. These bonds will be tested by Trump and his allies in the weeks ahead. Already, they have tried to activate anti-urban sentiment and racism to repeat the polarizing path to victory of 2016. Yet Biden—second-in-command under the nation’s first black president and the candidate with the greatest symbolic affiliation with the white working class—is better poised than almost anyone to turn these strategies back on the president. To do so, he’ll need his two greatest assets: an ability to connect and empathize with Americans from every walk of life, and an understanding that government isn’t a swamp but a source of solidarity and prosperity. Yet he’ll also need something that comes much less naturally: a vision not just of how to win an election, but of how to remake a broken system.

Jacob S. Hacker is a professor of political science at Yale University and the co-author (with Paul Pierson) of the forthcoming Let Them Eat Tweets: How the Right Rules in an Age of Extreme Inequality (Liveright, July 2020).

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OUR CRISIS SUPPORT SYSTEMS

Everybody Hates the SBA How did one of the most addled government agencies end up as our last line of pandemic defense?

By Alexander Sammon Illustration by Jon Krause HARPREET CHIMA OWNS SUBWAYS. It’s a family business that started in 1993 with just one sandwich shop.

When things were booming, that total grew as high as five; now he has three, selling foot-long subs and chips and cookies throughout Stockton, California.

Once the coronavirus crisis began, Chima, like countless small-business owners across the country, saw his venture hit hard. He kept the restaurants open, but amid California’s shelter-in-place orders, sales plummeted: Within weeks they’d bottomed out at 50 percent off their normal figures. As March became April, Chima cut his staff’s hours by about 20 percent, straining to keep payroll as close to normal as possible. Despite a cash reserve, paying full rent to the sites’ three landlords was already out of reach. One agreed to halve his $2,000 monthly payment for three months. To the other two, whom he owed $2,500 and $5,500 per month, he paid half and one-fifth, respectively, and hoped for the best. He got next to no guidance from Subway’s corporate offices.

The massive public-health crisis came with other costs as well. While some franchises like McDonald’s were able to funnel operations through the drive-through window, Subways serve foot traffic by design. Already, his workers wore customary plastic gloves, but additional safety precautions were needed for them and for customers, and Chima ordered masks through his supplier. Weeks later, none had arrived. So he decided upon what seemed like the next-best thing: a protective barrier.

He went to every Home Depot in Stockton, all of which had sold out of plexiglass sheets. Finally, he found them

at a store two hours away, and nearly bought out their entire supply. “We put plexiglass across the whole countertop,” Chima described. “Our employees are like bank tellers now, it’s completely covered.”

In late March, Congress convened to figure out how to save the economy from existential peril. Its answer, the cares Act, signaled to small-business owners all over the country that they could trust the federal government to provide assistance that had been lacking elsewhere.

Their saving grace would be a federal agency that few had ever heard of: the Small Business Administration.

The sba exists in large part for crisis situations just like these. Its newly minted Paycheck Protection Program, or ppp, was meant to serve a dual purpose: For companies with fewer than 500 employees, it would provide bridge capital for business owners to ride out the shutdowns, while providing enough funds to shield their workers from layoffs. The loans would cover eight weeks of worker salaries and operations, and if businesses spent at least 75 percent on maintaining payroll, the loan would be forgiven. In the name of speed, private banks and lenders would disburse the money, and the sba would backstop.

In many ways, Chima was the perfect candidate. For many years, the sba has routinely underwritten the expansion of fast-food giants and chain restaurants by supplying franchisees, who pay fees back to their corporate parents, with cheap seed funding. Chima hadn’t used an sba loan in the past, but he kept fastidious payroll records, so it wasn’t hard to apply, and in Stockton, where rents aren’t as astronomical as in other parts of

MAY/JUN 2020 THE AMERICAN PROSPECT 29

OUR CRISIS SUPPORT SYSTEMS California, spending 75 percent of his loan on wages for his 21 employees was feasible. Bank of America, where Chima had his accounts, limited the program at the outset to small businesses with which it had a pre-existing relationship; Chima figured this gave him an in.

So, when the program opened for applications on April 3, Chima downloaded a form off the Bank of America website, uploaded payroll information and personal identification, and hit submit.

What he thought might have been the end of the story, or at least a two-month intermission, was just the beginning of a Homeric quest. Two days later, Chima received email confirmation that his application had been received. Then, for days, nothing. The bankers at his local branch had no insights; the sba website told him not to reach out to local branch employees.

Ten days on, an email alerted him that his application was incomplete. It didn’t specify what was missing, but there was now an updated version of the forms. So, quickly, he downloaded and re-uploaded them. He got that same email alert on the 17th. Again, he re-uploaded.

On the 18th, the same. A local community bank turned him away, on the grounds that he didn’t already have an account with them. He tried applying through PayPal, but ran into problems with their application as well; it refused his driver’s license as valid identification. He emailed them for help, too, and got no response. He also applied directly through the sba website for an Economic Injury Disaster Loan, and was awarded a paltry $10,000.

By April 17, the sba had already announced that the initial $349 billion appropriation for the ppp was gone.

So after weeks of waiting, and with May rent looming, Chima had received just $10,000 to stave off catastrophe.

He wasn’t an exception. “I’ve talked to four other smallbusiness owners and none of them have gotten anything so far,” he told me. One had received an eidl.

COUNTLESS STORIES HAVE emerged to this effect: small-business owners left out of a too-small program, hastily assembled by an overmatched administration, furnished by a too-greedy private banking sector. All of this has conspired to push mom and pop to the brink. Already there have been lawsuits; with each new revelation about the program’s well-fed recipients, outrage swells.

Who is to blame? And how did the sba, a government department that has been generously described as a backwater for almost its entire 70-year existence, end up as the last line of defense against a global economic crisis? One would think that an agency designed to cater to the needs of something so universally adored and essentially American would be as robust and well managed as any in the federal government. One would be wrong.

Understaffed, underfunded, habitually scorned, sleepy,

30 WWW.PROSPECT.ORG MAY/JUN 2020

For many years, the SBA has routinely underwritten the expansion of fastfood giants and chain restaurants by supplying franchisees with cheap seed funding. captive, and at times uncertain in its own methods, the sba became the most important unknown government agency, basically overnight.

The sba was founded in 1953, under President Eisenhower. It was cobbled together from spare parts of the recently dismantled Reconstruction Finance Corporation, an agency created by Herbert Hoover but expanded drastically by Franklin D. Roosevelt to become one of the essential bodies of the New Deal. At the height of the New Deal era, the rfc loaned money to state-chartered banks and small banks in rural areas that were not part of the Federal Reserve System. The rfc could make loans that the Fed and other lenders would not accept, expanding access to funding to crucially underserved and underdeveloped parts of the country. It even bought stock in flagging industries and helped them right the ship.

As the country prepared for World War ii, Congress gave Jesse Jones, the rfc’s head, practically limitless power in establishing weapons and defense manufacturing. At the same time, it created the Smaller War Plants Corporation (swpc), which made direct loans and encouraged banks to lend to small entrepreneurs, diversifying military contracting and preventing monopolistic dominance. As the rfc waned, Eisenhower, wary of the “military-industrial complex” from his time commanding the Army, looked to create a nondefense analogue to the swpc. “Eisenhower was an anti-monopolist, he very much understood small business, and believed the role of government was to keep industries from becoming too concentrated,” said Stacy Mitchell, co-director of the Institute for Local Self-Reliance. “Republicans wanted

to differentiate themselves from Democrats and decided to launch the sba as part of that thinking.”

The decision was met with trained disinterest from the small-business world. “The small-business community wanted protection and working antitrust laws,” said Brian Callaci, a labor economist and Postdoctoral Scholar at the Data & Society Research Institute. Antitrust was still relatively robust in the 1950s, and access to capital wasn’t as big a concern, Callaci explained. “No one really wanted the sba.”

But in an age when federal agencies were actually responsive and well organized, sba got off to a good start.

It provided useful and necessary funding for upstart small businesses, particularly to those frozen out of the traditional banking sector. It also lent to natural-disaster victims (an analogue of the Economic Injury Disaster Loans granted during the coronavirus crisis), assisted small business in obtaining government contracts, and provided management and technical assistance to startup entrepreneurs.

But before long, large corporations discovered the sba money pot, and began scheming to siphon funding for their own advancement. The automobile, oil, and hotel industries pestered the agency for access. But the chain restaurant industry was most successful in breaking through. Fast food in particular relied on franchising to circumvent some restrictions on monopoly behavior. Like Harpreet Chima, franchise owners were freestanding legal entities, but the parent company controlled them through restrictive and far-reaching contracts.

Franchises were initially considered, in the words of then-Administrator Eugene Foley, “distribution outlets

of large businesses.” But in 1966, the sba succumbed to lobbyist pressure from the International Franchise Association and changed its rules, which overnight set it on its current path toward corporate capture. The sba now actually gives special preference to aspiring franchisees, despite the fact that the failure rate of Subways and 7-Elevens is much higher than that of the average independent small business. In 2014, 43 percent of firsttime franchisees obtained financing from sba loans.

Once chain restaurants had picked the lock, the sba’s anti-monopoly convictions became etiolated even further.

In the late 1960s and early 1970s, President Richard Nixon turned to the sba as a way to advance a vision of minority capitalism, placating some civil rights activists in a marginal, pro-business manner. But that wasn’t the only reason for his embrace. One of Nixon’s biggest financial contributors was Ray Kroc, founder of McDonald’s, who saw in the sba an opportunity to underwrite the expansion of his burger empire. Companies like McDonald’s had more than enough money to furnish financing for their own upstarts, but as Kroc cunningly divined, a willing federal agency putting up the money itself would mollify his downside. That blueprint has caught on industry-wide.

From the outset, the agency was wary of loans in disadvantaged communities, an ominous echo of the Federal Housing Administration’s reluctance to forward housing credit in “redlined” cities. In 1966, the sba ruled that “we do not intend to provide start-up financing for a small grocery, beauty parlor, carry-out food shop … unless there is a clear indication that such a business will fill an economic void in the community.” The Minority Lending Program set up in the Nixon years never matched its promise: sba loans to African American business owners sunk from 38 percent of the sba’s minority-lending portfolio in 1980 to 9 percent in 2004; loans to Latinos were cut in half. (Loans to Asian small business, by contrast, skyrocketed during this period to about two-thirds of the entire program.) Now, according to sociologist Tamara K. Nopper, “the sba publicly promotes the idea that black economic progress has sufficiently been made.”

A critical change in sba policy accompanied (and perhaps caused) those minority-lending shifts. In the early 1980s, the sba decided to save money on staffing by switching from a direct lender to a guarantor of loans originated by private banks. It just so happened to save the agency from the firing squad of the Reagan Revolution, as private banks intervened to protect the generous guarantees, and the fees they were wringing out of the program. But it also led to black-business access to sba loans deteriorating, mirroring private banks’ disinterest in servicing minority communities.

Over the next 20 years,the sba limped along, brutally underendowed, a frequent target for elimination

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by Congress, showing up in the public consciousness only as a scandal generator. As part of George W. Bush’s contemptible Hurricane Katrina response effort, the administration deputized the sba’s Office of Disaster Assistance to disgorge more than $6 billion in loans to Gulf Coast disaster victims. Investigations later found that more than half of the loans were issued with shoddy paperwork, hundreds of millions of dollars went missing, and a significant percentage of borrowers fell into default without making a single payment. An alleged botched cover-up, according to journalist Keith Girard, “was a cynical, contrived campaign to clear a backlog of Katrina loans from the sba books—at any cost—simply to help the Bush administration save political face.”

For the beleaguered agency, scandals became commonplace. In 2008, Congress created three new disaster relief programs, designed to get needy businesses funds within 36 hours. The sba only piloted one of the programs, and it issued zero loans in seven years. A 2008 inspector general report found a quarter of sba loans involved improper payments; a 2010 audit by the Government Accountability Office found 61 of the top 100 small-business contractors were in reality large businesses. In 2018, a review of the preceding decade found a glut of objectionable lending: funding to 74 yacht clubs, plastic-surgery clinics, $280 million to private country clubs, $12.2 billion to highly capitalized venture capital firms, and more.

Perhaps most important, the agency had done little to inconvenience a rapid, accelerating, and uninterrupted consolidation of the American economy. Born as an antimonopoly tool, the sba became as ineffective as the rest of the federal government to prevent the Second Gilded Age. Despite that battery of indictments, despite enduring dysfunction, despite being so overlooked that President Trump initially appointed the first lady of professional wrestling Linda McMahon as its head, the sba, up through this March, still offered an essential service.

The vestiges of its mission can be seen in the professional development it gives to minority entrepreneurs, in the way it helps to a limited degree mitigate some of the obvious racial biases in the banking world. “It’s a relatively tiny sliver of the whole, but it’s critically important,” said Mitchell, of the Institute for Local Self-Reliance. “sba loans have heavily gone to small businesses, womenowned businesses, people of color, people who don’t quite meet the underwriting criteria but are close. Bottom line, this is an agency that does important stuff but doesn’t function as well as it should.”

And then, the coronavirus hit.

IN 2019, THE SBA GUARANTEED about $30 billion in loans, not even 5 percent of all small-business lending from banks and credit unions. In the $2.2 trillion cares

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Due to shutdown orders, small business, which accounts for an estimated 44 percent of gross domestic product, was facing an extinctionlevel event.

Act pandemic response package passed on March 27, it was suddenly tapped to disburse $349 billion in emergency Paycheck Protection Program funding, more than 11 times its annual loan book, in a matter of days. “It was good policy to tie this notion of a forgivable loan to you holding on to your employees, that was a good feature,” Sarah Bloom Raskin, former Treasury official and Fed governor, told the Prospect. “But the sba’s website is notoriously the most crashable website out there. Even prepandemic, businesses could barely rely on that website.”

The leader of this uncertain project would be Jovita Carranza, approved by the Senate in January 2020, just weeks before the crisis unfolded. Carranza had served as an adviser to Treasury Secretary Steve Mnuchin on the Opportunity Zones program in the Trump tax cuts, which within months had been revealed as a shallow and often openly corrupt ploy to help investors skirt the capital gains tax. At least she had experience at the agency, serving as the sba’s deputy administrator from 2006 to 2009.

Carranza’s initial few weeks in office followed the time-honored tradition of Republicans in government advocating for the demise of the very agencies they direct.

Her first proposed budget sported an 18 percent cut overall and a 36 percent cut to entrepreneurial development, despite the fact that the sba, for all its limitations, essentially costs taxpayers nothing. This attempted hit on the budget came while coronavirus clusters raged in Washington and New York state.

By the time shutdown orders crested in April, at least

PAUL SANCY / AP PHOTO

43 percent of businesses had temporarily closed, and employee counts fell to 40 percent of the level in January.

Small business, which accounts for an estimated 44 percent of gross domestic product, was facing an extinctionlevel event, and would need a herculean intervention to have any shot at salvation.

It wasn’t a foregone conclusion that the sba would head up this program. For many, it made more sense to have the Treasury, which is better staffed, more capable, and already in possession of the relevant documentation through the irs, to do such a task. But Congress tapped the sba, an agency with just 4,000 employees. If there’s any bureaucratic muscle left in the atrophied Trump administration, the sba isn’t it. ppp loans, furnished as an expansion of the administration’s usual 7(a) lending program, would offer either $10 million or 2.5 times a small business’s average monthly payroll, whichever was less, at an interest rate of 0.5 percent (a rate that doubled after banks groused). The loan would be forgiven entirely so long as at least 75 percent of it was spent on payroll, and all employees were retained, or rehired. There was also a separate program for Economic Injury Disaster Loans, with an advance of up to $10,000, also forgivable.

Even in a normal year, the sba is in no position to handle its own 7(a) lending. So it followed its familiar model: contracting lending out to private banks and financial firms (including upstart financial-technology companies, which earned new validation as vital lend-

ers despite sitting outside the regulatory perimeter). The agency didn’t release guidelines for the program until the night before it was supposed to begin. Some banks were so flummoxed by the vagaries of the rules that they didn’t open lending for days, a real problem for business owners reliant on their longstanding banks, since the program was first come, first served. When the money ran out, the loans closed.

The ppp loan application opened on April 3, and the mad dash began, although it was more maddening for some than others. The sba’s “E-Tran” system, which took in the loan applications for authorization, crashed repeatedly. The chair of the Independent Community Bankers of America claimed on April 7 that one-third of community banks were locked out of the system.

By April 16, less than two full weeks after the ppp’s kickoff, it was already out of money. In some sense, against all odds, that was a huge success. The sba was tasked primarily with getting money out as fast as possible. Despite widespread confusion, and given its limitations, two weeks wasn’t bad. The paucity of funding, which pitted businesses against one another, wasn’t the sba’s fault. “I think the program was relatively successful,” said Shaoul Sussman, legal fellow at the Institute for Local Self-Reliance and litigation clerk at Pearl Cohen.

But as recent history has shown, an inadequate bailout, in a moment of acute crisis, presided over by private financial entities with their own set of aims, breeds certain outrage. And even though money got out the door, the initial returns on where that money went were less rosy.

The first scandal wave came from the restaurant industry. That should have come as no surprise, given the sba’s unique subservience to fast food. But in many cases, it wasn’t franchisees, but the corporate headquarters directly, that reaped the benefits. Ruth’s Chris Steak House, applying as two separate legal entities, secured $20 million in loans, circumventing the $10 million cap. Shake Shack, which trades publicly on the New York Stock Exchange with a multibillion-dollar market cap, secured $10 million, and Potbelly sandwiches and Taco Cabana maxed out as well. None has fewer than 500 employees.

This was no accident, but a direct function of program design. Tucked deep in the 900-page bailout was a clause specifying that, while applicants were limited to businesses with fewer than 500 employees, large restaurant chains needed just fewer than 500 employees “per physical location” to be eligible. This enabled AutoNation, a Fortune 500 giant with $21 billion in revenues, to grab at least $77 million through 81 separate dealership locations.

As The New York Times reported, that loophole was lobbied for by the National Restaurant Association and

MAY/JUN 2020 THE AMERICAN PROSPECT 33

OUR CRISIS SUPPORT SYSTEMS the same International Franchise Association that captured the sba in the 1960s. Sen. Marco Rubio, head of the Small Business Committee, with help from Chuck Schumer, ferried it through. AutoNation, Shake Shack, Potbelly, Taco Cabana, and Ruth’s Chris were all later shamed into returning the loans.

In addition to franchises, over 200 publicly traded companies received ppp loans, despite having access to the capital markets for short-term assistance. This includes the two-decade-old tech veteran RealNetworks, traded on the nasdaq. Another surprising ppp recipient was the Los Angeles Lakers, whose top employee LeBron James has a net worth of about $480 million, about 104 times the $4.6 million loan they received. (The Lakers, too, gave back the money.)

The second wave of scandal came from the banks. Congressional statute held banks completely harmless for any fraudulent activity within the loan applications. All they had to do was comply with anti–money laundering rules by confirming the borrowers were living, breathing human beings. For this, banks garnered outsized fees for processing the applications, as fixed percentages of the loan amounts. Though the percentages dropped from 5 percent for smaller loans to 1 percent for the largest, it still made bigger loans more lucrative, far outstripping the meager cost of processing.

Lenders did not need to wait for sba confirmation of any sort, empowering them to do whatever they wanted.

Large banks—JPMorgan Chase, Bank of America, and Wells Fargo, among others—predictably favored their own customers, because they could use their existing anti–money laundering compliance to cover those loans.

They also, according to data and allegations in federal lawsuits, prioritized bigger loans to high-end clients, not only reaping bigger loan fees, but helping customers more likely to purchase other products.

More than 300,000 customers of JPMorgan’s business banking unit, which serves smaller firms, applied for loans; just 6 percent were approved. By comparison, some 5,500 high-dollar customers of the commercial banking business applied for funding, and nearly all of them got loans, according to the bank’s own data. The New York Times referred to that as “concierge service.”

Within days, Wells Fargo, Bank of America, JPMorgan Chase, and us Bank were sued over alleged loan shuffling to prioritize high-dollar applications.

Despite this high-profile nefariousness, small banks seemed to navigate the program much better than their larger counterparts. An Institute for Local Self-Reliance study found that “three times as many ppp loans were made per capita in the ten states with the most community banks … compared to the ten states with the fewest.” Smaller banks, invested in the communities in

34 WWW.PROSPECT.ORG MAY/JUN 2020

which they lend, just worked harder to make the program succeed. Of course, those loans wound up being quite a bit smaller. Nearly 45 percent of the money in the first round of ppp went to just 4 percent of the firms who received loans.

In a cruel twist of fate, the ppp’s structure has resulted in the sba presiding over a massive racial wealth transfer away from minority small-business owners. According to the Center for Responsible Lending, a galling 90 percent of women and minority business owners were shut out of the first round of the program, including 95 percent of black-owned businesses, 91 percent of Latino-owned businesses, and 91 percent of Native Hawaiian or Pacific Islander–owned businesses.

Even before this program, the sba’s migration toward large, private banks to do its work was, in part, actively undermining its own mission. It was those very banks’ well-documented penchant for bias against women entrepreneurs and entrepreneurs of color that necessitated the sba in the first place. A provision in the ppp statute restricts the formerly incarcerated from accessing the loans, and that population is disproportionately black and brown. With community banks shrinking in minority communities, and large banks refusing to cover those same neighborhoods, the people most reliant on the sba quickly became the least likely to benefit from its newest and most essential lifeline.

Lastly, proving beyond a doubt that this was a Trumpadministered program, close affiliates and major donors to the campaign raked in ppp cash. Electric-truck startup Nikola Motor, currently in the midst of a merger with a public company that values it at $3 billion, received over $4 million; it’s run by Trevor Milton, a billionaire Trump donor. Indiana-based coal mining outfit Hallador Energy took $10 million after it had sacked 60 employees in March, though it made sure to retain former epa Administrator Scott Pruitt. The school Steve Mnuchin sends his kids to was among many elite private schools to grab some ppp money. Luxury hoteliers Monty Bennett and his son Archie Bennett became the single-largest recipients of small-business bailout money, pocketing over $59 million for their various holding companies that contain, among other properties, the Ritz-Carlton in St. Thomas. That father-son duo has given nearly half a million dollars to Trump since 2016. (After weeks of pressure, they finally gave back the money.) That’s far from an exhaustive list, but this magazine is only 64 pages long.

On April 23, Congress passed another stimulus bill, re-infusing the ppp with another $310 billion, and no additional oversight. When it reopened April 27, the sba’s “E-Tran” system crashed within ten minutes.

THE PPP’S MONEY ALREADY drained, Chima kept

The SBA’s future is as murky as the small-business community’s. But this crisis has proven its necessity.

applying. On April 18, he submitted applications to Lendio, an online lending service, and Ready Capital, a nonbank real estate finance company. “We’re just hoping one of these comes through for us,” he said. On April 21, Lendio sent him a notification that his application had been accepted, and he was in the line to receive money, if enough was allocated in the second wave. Three days later, Ready Capital informed him they were going to submit his application to the sba. That same day, PayPal, despite the online application seemingly refusing his id, sent a contract with loan terms, ready to sign. Then an email came from Bank of America saying he had been assigned an sba number, “which I believe means funding is secured,” he told me.

[Full disclosure: The Prospect also received a ppp loan in the second round of funding, also through PayPal.] Even with an additional round, uncertainty is the only thing not in short supply. One report found that only 5.7 percent of small businesses received a loan in the first round, though 70 percent of them applied. Plus, because 75 percent of the loan has to go to payroll to be forgiven, companies that spend excessively on rent would have trouble meeting that standard, sinking them into (admittedly low-interest) debt, with no guarantee on when their businesses would come back to life. High-rent areas include New York City and Seattle, epicenters of the crisis; they also happen to be heavily Democratic regions.

For those who somehow managed to secure the elusive funds, a new wave of confusion has crested. That’s because, for all the headline commitment to forgiveness, the program’s exact rules remain muddied and nebulous.

The 75 percent payroll stipulation has disincentivized

business owners from buying protective equipment for their workers, lest they spend too much on anything other than salary, and get disqualified from forgiveness. Fear of violating terms, or worse, committing bank fraud, remains high. Plus, eight weeks of payroll support, at this point, will not be enough to save almost anyone.

Demand will return slowly. A survey from the Society for Human Resource Management found that 52 percent of small-business owners expect to close up shop within six months.

Big businesses are returning loans and small businesses are afraid to spend them. It seems possible that the sba participated in another corruption-addled program and, against all odds, managed to overcome its extreme limitations to blunt the edge of the crisis. Did the sba save the day? Did it save itself?

In many ways, the sba’s future is as murky as the smallbusiness community’s. But this crisis has proven its necessity. If small business is indeed critical to the fabric of American life, massively expanding sba funding, and revoking decades of cuts to staffing, is an obvious choice.

Hilariously, after banks were hammered for favoring the wealthy and well-connected for ppp loans, President of the Consumer Bankers Association Richard Hunt groused that “the government should have given money directly to businesses,” marking the first time in recent memory that a beneficiary of privatization argued against privatization, and instead for government to publicly provide services itself. The government should take the Consumer Bankers Association up on the suggestion, and staff the sba the way that the Home Owners Loan Corporation was staffed during the New Deal, directly issuing loans out of a government office. The sba should have an active representative within the next president’s Cabinet.

The coming months will prove decisively whether the SBA did manage to save small business, but saving the atrophied sba from its own extinction should occur regardless of that outcome. Adding money for oversight to claw back fraudulent claims would help restore long-lost faith. And the sba’s Office of Advocacy, which encourages small-business perspectives in regulations across the federal government, could be wielded to fight the corporate concentration sure to result in the pandemic’s aftermath.

For a potential incoming administration, restoring the sba to its rfc roots could play an essential role in our economic recovery, directing resources where needed rather than hoping the free-market financial system will make unbiased decisions. A more imperial agency, with legitimate funding and staff, a remit beyond fast food, and a seat at the table, could meaningfully shape the post-crash economy. Finally, nearly seven decades after its founding, the small-business community might depend on it.

MAY/JUN 2020 THE AMERICAN PROSPECT 35

OUR CRISIS SUPPORT SYSTEMS

The Journey of the Jobless Congress boosted unemployment benefits.

Now the challenge lies in getting them out to the unemployed, through underfunded state-level programs.

By Kalena Thomhave LIKE MILLIONS OF AMERICANS, Rosie Sullivan’s introduc-

tion to the consequences of the coronavirus pandemic began with a series of shifting unknowns. The question “would she get laid off?” turned into “when would she get laid off?”

And after that, would she be able to apply for unemployment insurance? Then, would she ever receive the funds?

Before she lost her job, Sullivan was the assistant company manager for the national touring production of stomp, a theater show featuring a small band of percussionists and dancers. The company was one of the last theater tours still operating in mid-March. The group got off their plane in Baltimore to travel for a show on the night of March 14 and found out it was canceled while they were still in the airport.

Then, everything was canceled.

Sullivan lives in New York City, but after the tour’s cancellation she flew home to Michigan to stay with her parents. From her parents’ home, she applied for benefits through New York’s unemployment insurance (ui) program.

Waking up bright and early a few days after losing her job because she wanted to “just get it done,” Sullivan logged in to New York’s ui website and began filling out the application. After a few minutes on the page, the system forced her out, showing a notification that the application had timed out. ok, she thought. She just needed to be quicker. She wrote down all of her information so that she could quickly input it into the system. That didn’t work. She

36 WWW.PROSPECT.ORG MAY/JUN 2020

was getting kicked off the website after less than two minutes on a page.

The system wasn’t timing out, it was crashing, as a slew of laid-off workers, all with similar ideas to wake up early before the surge, tried to apply for benefits to keep themselves afloat.

As April ended, 30 million Americans have applied for ui since the coronavirus started shutting down cities and states in mid-March. The pandemic has not unfolded gradually like the Great Recession. In a matter of weeks, the unemployment rate has spiked like never before, as the need for social distancing spread, and the need for restaurant workers, landscapers, app developers, entertainers, dental hygienists, and myriad others collapsed.

Without stable sources of income, Americans turned to the program that they’re supposed to rely upon during times of crisis: unemployment insurance.

Sullivan’s frustrating experience on her home computer has likely been multiplied tens of thousands—maybe millions—of times. Across the country, state ui websites have crashed, and call lines have been inundated. Many jobless workers continue to try to access benefits. And those who get their claims in don’t necessarily get paid: Department of Labor data for March show that just 1.6 million new claimants received payments, out of 11.7 million initial claims. Other surveys and analyses reveal similar numbers.

As millions more layoffs pile up, the crisis has pushed long-standing issues with state ui programs into the spotlight: their systemic makeups, the cuts that some

state programs have suffered over the past decade, as well as the way the federal ui program itself is built. State systems are historically underfunded and wildly variant—access can depend on what state you happen to find yourself in. The experience of the Great Recession should have, but did not, trigger a reassessment of whether state ui systems needed wide-scale support to upgrade, or maybe federalization to ensure rapid response across the entire unemployed population. Now, millions have been left stranded and frustrated, amid the greatest flood of unemployment claims in U.S. history.

AFTER DAYS OF TRYING to get into the online system,

MARY ALTAFFER / AP PHOTO

Sullivan tried to call the New York Department of Labor.

But she was greeted with an automated directive to try at a different time due to the high call volume—and then an automatic hang-up.

Running out of options, she took to Twitter. Sullivan tweeted at the New York Labor Department. But what was most helpful were other claimants’ responses. One person gave her advice to call the phone lines incessantly.

Even though the calls would abruptly end, the claimant said, eventually you get put on hold.

So Sullivan gave it a shot, and after about two dozen

tries, she got hold music and eventually a live person.

Because she already had all the information compiled after so many other unsuccessful attempts, in a matter of minutes, she finally submitted her claim.

Sullivan’s experience, though frustrating, is not necessarily the norm. She was able to get through, and she did so after dozens of phone calls, not hundreds. She applied in the early stages of the unemployment crisis; so while she encountered an overload, the surge in layoffs hadn’t even been reported yet. The wave of unemployed workers now must contend with a system built for a very different time.

Created in 1935 in the wake of the Great Depression, ui is a federal-state partnership. States levy taxes on employers, and these taxes make up the state’s trust fund. The more ui claims levied against them, the more employers pay in taxes (though states aren’t counting covid-19 layoffs against employers). While employees don’t directly pay into the program, economists generally believe that employers pass some of these costs on to their workers.

The trust fund pays out benefits to jobless workers, typically 50 percent of their wages but sometimes more or less depending on the state. Workers must have lost their job through no fault of their own (meaning workers who’ve been fired or who quit their jobs aren’t eligible) and must

A mural in New York

MAY/JUN 2020 THE AMERICAN PROSPECT 37

OUR CRISIS SUPPORT SYSTEMS be actively looking for work. The federal government also taxes employers in order to fund the administrative costs of the program (though this funding has eroded, being based on the previous year’s unemployment rate—last year, we had record-low unemployment), as well as shore up federal benefits when state benefits run out.

Since the New Deal era, little of the basic structure of ui has changed. Yet 85 years ago, the labor market was quite different from what it’s like today. Most recognized workers—generally white men—worked at a single employer for their entire lives. Today, the agricultural and manufacturing-based economy has transformed into a service-based economy characterized by low-wage and often unstable employment. Women are a major part of the labor force, and have been for decades. Wages have stagnated over the past decades, meaning ui benefits have stagnated too if they’re 50 percent of a worker’s wage.

In many states, part-time workers looking for parttime work aren’t eligible for ui. As gig work expands, more workers are classified as independent contractors, populations who aren’t generally eligible for ui. Seasonal workers, and workers in the low-wage labor market, characterized by volatile schedules and frequent job change, may face challenges meeting eligibility rules that require workers to have been on the job for a certain amount of time or to have made a certain amount of money. In addition, many states have further tightened ui eligibility, cut benefit levels, and reduced the maximum duration workers can receive benefits.

In March, before the pandemic really started to take its toll, just 29 percent of unemployed workers nationally received unemployment benefits, and in some states, that number is as low as 10 percent. “That’s a system that’s barely functioning. The rules are too restrictive,” says Michael Leachman, senior director of state fiscal research at the Center on Budget and Policy Priorities.

With the passage of the Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security (cares) Act, the federal government has tried to shore up the traditional ui system. Congress is incentivizing states to waive some onerous requirements, such as the one-week waiting period before benefits can be issued, job search requirements, and counting layoffs against an employer’s ui tax rate. They’ve created new programs, giving unemployed workers an additional $600 each week until July 31 (an unprecedented increase that will give all workers previously making up to around $75,000 per year a full replacement rate on their salary), and extending ui benefits by 13 weeks. The government has also released administrative funding to states to improve their infrastructures and hire more workers to deal with the onslaught of claims.

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Little of the structure of unemployment insurance has changed since 1935. But the labor market is quite different today.

Importantly, given the arcane rules of ui eligibility, the cares Act also created Pandemic Unemployment Assistance (pua), specifically for workers who are left out of traditional ui. Independent contractors, self-employed workers, and workers with limited work history are eligible for pua if they are deemed ineligible for the regular state ui.

The purpose of ui as an insurance program, whether traditional, federally extended, or pua, is not just insurance for the worker, but also for the economy. During economic downturns, programs like ui and the Supplemental Nutrition Assistance Program (snap, commonly called food stamps) are meant to act as automatic stabilizers, covering more people when it’s needed and contracting when times are better. In this way, the funds paid out to workers stimulate the economy, because they’re quickly spent.

The last time the ui program saw a major surge was during the Great Recession. Between 2009 and 2013, Congress extended emergency unemployment benefits multiple times, up to 99 weeks in many states. When state ui trust funds ran out, states borrowed from the federal government. ui stimulated demand, saving jobs and closing one-fifth of gdp shortfall during the recession.

After the recession, states should have learned that they couldn’t disinvest in their ui programs in good times—they had to shore up their trust funds in order to prepare for the next crisis. But not all states took those lessons to heart. Just 30 states, Puerto Rico, and the District of Columbia were solvent at the beginning of the year, meaning there were enough funds in the state trust fund to pay out benefits for a year in a crisis. And this crisis will be much bigger than the last.

PART OF THE REASON FOR the systemic overload is that

states have been relying on decades-old mainframe computing systems. A 2010 survey of states by the National Association of State Workforce Agencies found that more than 90 percent of states used these legacy systems, and only one state had modernized both their benefits system and payroll tax collection system.

JULIA WEEKS / APSTK / VIA AP PHOTO

Congress expanded eligibility for jobless benefits in the CARES Act.

But that was 2010. A year earlier, as part of the federal stimulus package responding to the last economic crash, the federal government made funding available to states to update their systems, provided that they altered program requirements to ensure more workers received ui benefits. So did states modernize after the Great Recession, and after the federal government aimed to incentivize modernization?

Many states started, though only 16 have completely modernized their systems. And even so, most have still been overwhelmed by the surge of applications.

In 2017, a Department of Labor letter to states regarding supplemental funding opportunities read: “ui programs in many states operate using … obsolete systems [that] had difficulty ramping up to process recessionlevel workloads and modifying their systems to accommodate required programs changes … These difficulties delayed payments to eligible unemployed workers and frustrated potential beneficiaries.” The letter also recognizes “a scarcity of technical personnel with knowledge of older hardware and software languages.”

As has been widely reported and mocked, part of the issue lies in a coding language called cobol—“common business-oriented language.” Many state ui systems are programmed with cobol, developed in 1959. cobol is generally used on mainframes, which are large physical

computers located on-site in a business office, in contrast with the off-site cloud computing infrastructure used commonly today. But beyond government, cobol remains in use for a large proportion of the world’s major banks, insurance companies, airlines, and other private industries that consistently rely on mainframes. Indeed, 71 percent of Fortune 500 companies use mainframes, specifically ibm mainframes, on which cobol is often used. cobol was considered to be a dying language even decades ago. Most universities and coding programs no longer teach it. And so when cobol turns into “spaghetti code”—meaning source code that’s too convoluted to understand or maintain—there’s often no one around to fix it. cobol programmers are literally dying out; the New Jersey governor pleaded during a televised press conference in early April for cobol programmers to volunteer to help the state. In response to sudden needs, ibm (developer of the most commonly used mainframes) recently launched a training initiative to teach cobol.

Why did everyone stick with cobol? The systems work well enough when relatively few jobless workers rely on them. So they’ve rarely been improved and haven’t been optimized to scale. Change is risky for inherently conservative institutions like the banking system, and modernization is expensive. The latter is particularly important for state ui agencies.

The federal stimulus grants for ui modernization, which totaled $4.4 billion across 39 states, were extremely limited. Most states have balanced-budget requirements, and they can’t go into debt funding their own system modernization. In 2016—the last year grantees were announced by the Department of Labor—most states received less than $500,000 in funds.

Andrew Stettner, a senior fellow at the Century Foundation specializing in unemployment insurance, points out that for Medicaid and snap, the federal government paid 90 percent reimbursement over seven years for states to redesign their systems. “Nothing ever happened like that at [the Department of] Labor,” he says. The grants the federal government did provide for ui modernization “[weren’t] any kind of real, sustained investment. States really had to raise their own money to do these it modernization processes … [with] no federal matching for [them].”

Some states have been planning to migrate their systems away from mainframes for years, and yet were still caught unawares by the crush of applications due to the pandemic. New York, where Sullivan applied for benefits, recently announced a partnership with Google, Verizon, and management consulting firm Deloitte to update its application portal. Prior to that, it was asking claimants to find a fax machine to submit pay stubs to the ui office.

Yet inadequate systems make more than just applica-

MAY/JUN 2020 THE AMERICAN PROSPECT 39

OUR CRISIS SUPPORT SYSTEMS tion processes difficult. A number of quirks exacerbate the challenges of receiving benefits. In an effort to ease the burden on workers needing to recertify their claims, in Georgia a claimant’s employer must do so every week— transferring that burden to someone with much less stake in whether a worker gets their benefits. Claimants in Georgia have been missing weeks of benefits when their employers forget or don’t realize what they’re supposed to do. In other states, when a ui claimant forgets their personal identification number (pin), they can’t simply reset it online—they must successfully speak to a worker on the phone or even wait for it to be mailed to them.

In Sullivan’s case, she was successful submitting her claim and getting approved for ui, but the worker she spoke with said she had to enroll in direct deposit online.

She tried to, but the change would not process. She could only call the phone lines again and again, helplessly, as the state sent her benefits to her New York address on a prepaid debit card issued by KeyBank. Calling KeyBank’s help lines was also unsuccessful.

She eventually was able to change her direct deposit information, but $900 in ui benefits was still sitting on that KeyBank card in the mailbox of her apartment building in New York.

Luckily, Sullivan’s boyfriend went to her place and was able to access her mailbox—Sullivan’s roommate had mailed him a key. He then mailed Sullivan her debit card.

What if she didn’t have a friend in New York to get her mail for her? What if she wasn’t staying rent-free with her parents? What if she desperately needed that $900 to survive?

What are happy hypotheticals for Sullivan are very real questions for others.

OVER THE PAST DECADES, states have diverged in their approach to ui, as some have altered policies in order to please employers over workers. Back during the Great Recession, the majority of states exhausted their trust funds and had to borrow from the federal government.

As the country recovered, states needed to pay those loans back; after a short grace period, federal ui taxes on employers would increase to make up the gap. More conservative states instead covered the costs by slashing benefits and benefit duration to pay down the debt.

Modernization does not necessarily equal ui benefits in a jobless worker’s pocket. Florida’s Reemployment Assistance program—the state’s name for ui—was modernized in 2013 and specifically designed to keep benefit access low, according to a Politico report. The new system, designed by Deloitte, was riddled with glitches and errors even when it debuted seven years ago. (Deloitte delivered a similarly error-prone ui system to Massachusetts that same year.)

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By the end of April, less than 22 percent of UI claims in Florida had been paid, out of 702,000 applicants.

A Florida audit report from 2019 also documented known errors in the system.

Melissa Whitworth of Orlando, Florida, was working as an actress before the pandemic hit and has been struggling to apply for Reemployment Assistance for a month.

Seeking to avoid an overloaded system, Whitworth tried filing her claim on the website well after midnight.

Still, she was hit with error message after error message, which Whitworth reads to me because she saved screenshots, in case there’s something like a class action lawsuit. She wasn’t successful, and then the state took the site down for a few days in order to process existing claims.

In early April, Florida hastily unveiled a new, simplified website—essentially an electronic form—where users give basic information, and then state workers themselves input that information into the original website. Whitworth was successful in completing that form but is still waiting to hear from the state what else she needs to do.

In her circle of friends, the majority of whom are out of work, she doesn’t know anyone who has succeeded in filing a claim and getting benefits paid out. Indeed, according to reporting by Orlando’s wesh 2 News, every state in the country had their trust fund balance fall during the first two weeks in April—except for Florida.

In Florida, the trust fund actually increased, taking in more from employers in taxes than it paid out to unemployed workers.

On April 24, the state announced that less than 22 percent of ui claims had been paid, out of 702,000 applicants. And that only reflects those fortunate enough to get their claims into the system.

Even before the pandemic, Florida’s rules were so restrictive that, on average, just one in every ten jobless workers benefited from the program. “Here we are at a point where our system couldn’t handle [ui] claims under normal circumstances, much less the influx now,” says Cindy Huddleston, an attorney and senior policy analyst at the Florida Policy Institute in Orlando. The state has had to “suddenly go from zero to a hundred miles per hour overnight.”

ALEX MENENDEZ / AP PHOTO

Workers protest the inadequate unemployment system in Orlando, Florida.

In addition to flexibilities to ease access to ui, the federal government also loosened merit pay requirements for ui staff workers. This means that states can more easily outsource essential functions; instead of hiring more government staff in light of its abysmal 2 percent answer rate for workers calling the ui agency for assistance, Florida recently spent millions on contracts with private call centers.

The name of Florida’s program—Reemployment Assistance—offers a hint as to why the state is facing so many problems: Conservative lawmakers want people working more than they want people to have ui to meet their basic needs. Unsurprisingly, Florida has one of the lowest average benefits in the country at $252.87 per week, a mere 38 percent of average wages, and benefits are limited to just 12 weeks. Florida, too, has underinvested in its technology, forcing claimants like Whitworth to struggle to apply amid frequent website crashes. At one point, the state had to switch to paper applications, creating the opportunity for uncomfortable coverage of masked Floridians physically in line to get print applications during a pandemic.

(Note that before the pandemic, the state generally didn’t allow paper applications for anyone.) Following in Florida’s footsteps, last year the Alabama state legislature cut the maximum number of weeks of assistance from the standard 26 weeks to as few as 14, depending on the unemployment rate. The legislation, partly influenced by a desire to attract employers to the state, was heralded to save the state trust fund $45 million per year. The bill

passed during a time of record-low unemployment for the state. It went into effect in January.

The current crisis “shows the necessity of investing in adequate state services and properly equipping our state departments when times are good in order to prepare for situations like we’re seeing now,” says Dev Wakeley, policy analyst at Alabama Arise, a state policy advocacy group.

It’s easy to cut ui when unemployment rates are low and the idea of another recession is out of sight, out of mind.

Arkansas, Georgia, Idaho, Kansas, Michigan, Missouri, North Carolina, and South Carolina join Alabama and Florida on the list of states that have recently cut the standard benefit duration.

Much of the reasoning behind these moves is that unemployment benefits encourage workers to stay home instead of returning to the workforce. There is some small truth to this—the Federal Reserve Bank of San Francisco found that ui recipients stayed jobless an extra 1.6 weeks compared to non-beneficiaries—but even so, that’s not necessarily a bad thing.

“Having access to ui allows people to find the jobs that are best for them,” says David Cooper, senior economic analyst at the Economic Policy Institute. “Giving people that cushion is a way to strengthen workers’ bargaining power and keep them from taking more permanent hits to their earnings.” In other words, ui allows people to take the time they need to find a job that fully replaces their old one, with high wages and good worker protections, instead of taking the first low-paying job available.

Importantly, cutting benefits disproportionately hurts workers of color. Black workers consistently have higher unemployment rates than white workers, and the typical duration of an unemployment spell for this group is longer, too. On average, black workers receive unemployment for about 26 weeks—the standard maximum duration for benefits. For white workers, it’s 20 weeks.

It’s not just inadequate benefit amounts and antiquated rules that workers have to deal with, but also poor communication by the state departments themselves.

Combine a systemic overload with confusing directions that are often completely inaccessible for people who don’t speak English, people with disabilities, or the 17 percent of Americans who only access the internet on a mobile device. It’s difficult for people to apply for benefits if they don’t understand the eligibility rules.

The People’s Parity Project, a national advocacy group led by law students, scanned each state’s agency website in mid-March, during the early days of the pandemic and its concomitant layoffs, and before the federal government stepped in. The project found that many states gave inaccurate information regarding ui benefits—even those states with otherwise laudable ui programs. Massachusetts, which has one of the highest average benefits in the

MAY/JUN 2020 THE AMERICAN PROSPECT 41

OUR CRISIS SUPPORT SYSTEMS country, claimed on its website that workers who receive a 1099 tax form (for independent contractors) are ineligible for traditional benefits. This isn’t true—some workers are improperly (and illegally) classified as independent contractors and are otherwise eligible for ui. Yet these workers would have been discouraged from applying.

That language has since been removed from Massachusetts’s website.

Other states that had removed the one-week waiting period and the job search requirement to ease ui eligibility didn’t always clarify the new rules on their websites.

“Informing people of their rights is almost as important as the rights themselves,” says Sejal Singh, the project’s national policy director. “If [people] don’t know that they can apply for unemployment insurance, they’re not going to apply, and they’re not going to get access to this lifesaving benefit.”

MICHIGAN ALSO TIGHTENED UI after the Great Reces-

sion. The state, which even before 2008 had the highest unemployment rate in the country, was the first to cut the maximum weeks of ui, reducing 26 weeks to 20. The legislature also passed a law allowing wage garnishment of ui overpayments and another that allowed claimants to be booted off ui for failing or refusing a prospective employer’s drug test. The legislature declined to update the maximum weekly benefit or peg it to a certain percentage of median income. The maximum benefit has been eroding over time, stuck at $362 since 2002.

“Instead of making unemployment insurance more responsive to the economic hardship in the state, the legislature made it more punitive,” says Peter Ruark, senior policy analyst at the Michigan League for Public Policy. Changes centered the employer over the worker.

For example, the Michigan ui agency has an “employer ombudsman” to serve employers in the state. There’s no equivalent representation for workers.

Like Florida, Michigan modernized its program’s technology, and like Florida, it was tilted away from ui users. Michigan’s new system, replacing one that relied on cobol, created an algorithm that automatically flagged fraud, even going back years. It also automatically garnished wages and seized tax refunds of workers accused of fraud, some who had no idea they had been accused of ui fraud because they had not logged in to their ui account for years. The collected funds swelled the agency’s coffers, which was sometimes used for general state operations.

As with similar algorithms that automate weighty decisions about people’s lives, the algorithm wasn’t always right. In fact, it was inaccurate 93 percent of the time, a percentage that went undiscovered until affected people declared bankruptcy, lost their homes, or even committed suicide.

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“The system was and is a very modern system,” says Ruark. “It’s not just about old systems versus new systems. It’s about fair systems.”

After several lawsuits, a switch to human intervention for fraud cases, and a change in administration, the Michigan agency seems to be turning itself around. As the pandemic has spread, Michigan’s ui response has been one of the better ones in the nation. Democratic Gov. Gretchen Whitmer, who replaced Republican Rick Snyder in 2019, issued executive orders to restore the maximum benefit duration to 26 weeks, waive job search requirements, and expand eligibility, temporary changes that could only be made permanent by the state legislature. The state was also one of the first to begin issuing the extra $600 to weekly ui checks.

I spoke with three separate sources who specifically lauded the Michigan ui agency director’s response to the pandemic. Indeed, the new director, Steve Gray, used to be an advocate, heading up a University of Michigan Law School team that provided legal assistance to ui claimants affected by the false-fraud fiasco. With the new flexibilities that have been put in place, the state was “looking for areas in the law that are catching people that should be getting paid, but because of the way the law was structured, they’re not,” says Gray.

It’s not easy for every jobless worker to file for ui in Michigan—though there are success stories. Over the phone from Ludington, Michigan, Diane Smith tells me she isn’t sure her story is one that I’d be interested in hearing. “Fortunately for me, it went really smoothly … it wasn’t everything I’m hearing about, thankfully,” she says. Smith, a dental hygienist, was able to apply for benefits in about 25 to 30 minutes. She applied on March 17, a week before Michigan’s stay-at-home order was in place, so Smith may have missed a wave of claimants in the system.

Smith’s husband is self-employed and not eligible for traditional ui, so he’s applying for pua benefits. How that works is the state must determine that a claimant is ineligible for the regular ui program before approving their application for pua. Many states have been slow to set up these systems—it’s an entirely new program—though benefits are retroactive.

Smith’s story does not mean that all Michiganders are easily applying for benefits. There are still consistent reports of backlogs and delays even as the state is lauded for its response. But her story is a reminder that some people—millions of people—have been successful at accessing ui.

While we consider how millions of Americans are shut out of the ui program, we should also consider that the program is operating as it should be to some extent. Right now, the country needs a program that will put money

Altering the UI system to better support workers should be a high priority given the crisis, but also in order to prepare for the next crisis. in the pockets of Americans. Sure, the ui program needs improvements and needs to be modernized to support more workers. But for millions of Americans, ui is getting them money they need.

ALTERING THE UI SYSTEM to better support workers

should be a high priority given the crisis, but it should also be a high priority in order to prepare for the next crisis.

Improving the program is tricky because there is no consistent user base that can advocate for the program. Think about Social Security and Medicare, which have millions of seniors and public-interest groups like aarp concerned about shoring up the programs and defending them from possible cuts. ui’s base, by contrast, is wide-ranging and constantly shifting. There can be no coordinated effort of recipients agitating for the program because being on the program is temporary. Most of the workforce is a potential recipient, but ui is of no concern until the unthinkable happens. And the fact that ui doesn’t support independent contractors and gig workers certainly doesn’t help.

The program is complex, and there just aren’t as many people who are familiar with the murky details of ui like they are with more popular public-assistance programs.

For instance, one state policy organization I reached out to for this story told me they had no one on staff who could speak to how the state’s system works.

States should take up modernization efforts on their own—not just technologically, but policy-wise as well. It’s not 1935, and the ui program should reflect the realities of the current labor market. Obviously, the gig economy is a huge part of that. And many people rely on an array of ever-shifting low-wage and part-time work that also doesn’t meet the traditional eligibility requirements for ui. Sometimes, people may have to leave a job to take care of a sick family member. (Welcome to 2020.)

The federal government can standardize ui and offer

states incentives to build better programs. The current crisis may be opening a window to make improvements, particularly for independent contractors and gig workers.

“The pandemic [ui] programs [are] temporary, but hopefully [will lead] to a more permanent fix to some of these exclusions,” says Stettner with the Century Foundation.

Or the government could just federalize the program.

The need for a functional ui program nationwide is particularly important given its role as an automatic stabilizer during crises. ui is currently a mosaic of vastly different state programs, but the federal government could ensure that workers receive the benefits they need by taking control of the program and using the federal taxes already levied on employers to finance it. ui, after all, was created alongside Social Security, a federal program in which eligibility rules are the same for everyone.

The U.S. could also expand little-known provisions, like work sharing, in which employers reduce salaries across the board instead of laying people off, and the government steps in to pay the difference. This benefits workers, of course, but it helps employers too because they can keep their employees even during a crisis. It’s also less expensive for the government than paying full ui benefits to each worker.

Work sharing is currently supporting workers in Germany: Nearly half a million companies are deploying the tool, affecting about 20 percent of the German workforce.

In the U.S., only 27 states and the District of Columbia have work-sharing provisions on the books, and we can’t even be sure if employers are well versed in what work sharing is and what it can do for their businesses.

One has to wonder if many of these progressive policies or federalization can be enacted without a groundswell of worker advocacy. Right now, a significant portion of the population is currently receiving ui benefits, and many more are eligible and trying to access them. During the Great Depression, there was mass organizing and militant protests by unemployed workers. We didn’t see anything on that scale during the Great Recession, but as we all know, these are unprecedented times, and the scale of the crisis is perhaps bigger than we can now fathom.

“This is the point where workers get sick of waiting for their benefit and just decide that unemployment insurance doesn’t work,” says Michele Evermore, senior policy analyst at the National Employment Law Project.

“Or,” she says, “they come together and demand something better.”

Kalena Thomhave is a Michigan-based freelance writer on poverty and inequality, and a former Prospect writing fellow.

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The Many Varieties

America’s decentralized election system fails voters in

By Brittany Gibson This story was supported by the Pulitzer Center.

EVERY FOUR YEARS, STATES and territories begin their

own preparations for the presidential election, with their own procedures and their own staffs. Amid two years of formal announcement speeches, bus tours, debates, town halls, baby kissing, rallies, canvass kick-offs, and “get out the vote” events, more than 50 different election apparatuses kick into gear.

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During the primaries, voting can be run by the secretary of state, individual county election commissions within a state, or even state Democratic or Republican parties, if they’re hosting a caucus. The work is often dependent on volunteers to operate the polls, organizers to run election monitoring and assistance, election officials to tally results, and enough trust in the system for voters to participate.

Voting in the United States, viewed holistically, looks like an orchestra, composed of thousands of musicians, with different skill sets, different sheet music, different music

of Voter Suppression a common way.

stands, and limited direction from any one conductor.

“Whenever you talk to someone from another country and try to explain how our elections work ... they’re just kind of baffled,” said Dale Ho, director of the Voting Rights Project at the aclu, on Slate’s Amicus podcast with Dahlia Lithwick. “They look at us like, how can this possibly be?”

Despite this, most elections manage to produce a harmonious symphony—but not all of them. States are still running elections, ideally with their communities in mind, but election officials have limited resources that

often don’t prioritize communicating with voters on procedures. And those procedures have been complicated by a new wave of laws, ostensibly meant to increase voter security but usually motivated by discriminatory objectives to suppress the right to vote.

The United States’ decentralized election system means that these changes are implemented slowly, state by state or locality by locality. However, the coronavirus has added a new sense of urgency for change, as the pandemic poses a threat to usual in-person voting. The coronavirus is forcing rapid changes to the system in a

ILLUSTRATION BY CHRIS BUZELLI

MAY/JUN 2020 THE AMERICAN PROSPECT 45

OUR CRISIS SUPPORT SYSTEMS very short amount of time. And just as in any orchestra, one musician playing the wrong notes can taint the quality of the whole symphony.

THERE ARE ADVANTAGES to the American decentralized system. To interfere with national election results would mean hacking into thousands of election databases and facilities across the country, systems with widely different balloting: some on paper and some on screens, some read through a scanner and some tabulated manually, some sent in by mail and some cast in person. The Electoral College makes it easier to target presidential elections in a particular state, but a wholesale breach in election security is a difficult climb.

The patchwork system also allows for local and state-level officials to adapt to the needs of their constituents across the country. “The way that people cast a ballot on a reservation may be very different than how people cast a ballot for anything in an urban environment [or] a coastal environment,” explains Tori Wenger, a Skadden Fellow and voting rights specialist at the Legal Defense and Educational Fund, in an interview with the Prospect. “Your vulnerabilities on Election Day, just thinking of weather alone, can be very regional, and so having the versatility of communities being hopefully responsive to local voters’ needs is huge.”

However, the decentralized system faces new challenges in today’s elections, which in some ways have returned to an era that makes it harder for citizens to participate.

All of the core elements of our election machinery—registration procedures, voter id laws, absentee voting laws, poll worker trainings, and polling station operations—are left up to the states to decide. And the impact of these laws can often intersect with race and income, as did the harshest voter-suppression laws of America’s past. As a result, in every election, a voter in rural Georgia is likely to have a vastly different voting experience than a voter in an urban center in Oregon.

After hearing the Shelby County, Alabama v. Holder case in 2013, the Supreme Court rolled back the Department of Justice’s ability to prevent the implementation of any laws that carry an undue burden to voting access in states with a history of voter suppression. Under the 1965 Voting Rights Act, states could still pass whatever election legislation they wanted, but changes required federal “preclearance” after assessing the law’s effect on voters.

This is how Alabama’s legislature passed its voter id law before Shelby County in 2011. But it waited until the post-Shelby voting environment—24 hours after the Supreme Court decision, to be exact—to implement the rule, which requires an id to cast a ballot, and was followed

by Department of Motor Vehicles offices (where ids can be obtained) closing or reducing hours across the state, disproportionately in places with high black populations.

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All of the core elements of our election machinery— registration procedures, voter ID laws, absentee voting laws, poll worker trainings, and polling station operations—are left up to the states to decide.

Alabama’s voter id law, like many others across the country, was cleverly crafted. Technically, voter ids are free for all who don’t have access to an id in Alabama.

But you must have the right supporting documents—a birth certificate, which some voters may not have because they live in a rural area and weren’t born in a hospital, or they weren’t allowed to be born in a segregated hospital.

You would also have to make time to visit your local dmv office, which may now have reduced hours, or the one id truck that is responsible for helping give out free ids for the entire state (and is often parked in Birmingham).

Voter id laws don’t just create obstacles to voting in Alabama. They also create confusion. Ben Harris, chair of the Mobile County Democratic Executive Committee, explained that information on laws passed in Birmingham, even ones meant to help voters get to the polls, does not always make it to voters. And as is the case across the country, the burden to help potential voters to the ballot box falls on local groups like his. “If I could multiply by 1,000 percent the resources we have to get the vote out, I would. And it still wouldn’t be enough,” Harris says.

At this year’s Selma Jubilee, a celebration of the civil rights march that brought the Voting Rights Act to fruition, many demonstrators told the Prospect that they’ve experienced some form of voter suppression, whether it was finding out on Election Day that their polling location was moved or struggling to cast a ballot while at university. “It was frustrating,” Derica Green, 28, said of her struggles voting while away at college, “but it was minute compared to what my grandmother and everybody else went through.”

In South Carolina, a photo id is required, unless you are willing to sign an affidavit that you have an obstacle to getting an id. These voters get an impediment ballot.

They are also supposed to sign an affidavit stating their impediment on Election Day, and must hope that one of the poll workers is also a notary (without a notary, the proclamation is technically not an affidavit).

There is yet another ballot, a provisional ballot, for people who do have an id, but either lost it or forgot to

BILL CL ARK / AP PHOTO

Voter ID laws become even more challenging for those who vote by mail.

bring it to their polling station. For these voters, two days after a primary or three days after a general election, there are hearings where everyone who filled out a provisional ballot must show up to court and present their id to a judge to have their ballot counted. Many don’t know about these court dates, and even if they did, taking time off to prove identity days after taking time to vote is a burden, especially for low-income folks who only get guaranteed time off for voting, not the aftermath.

In Texas, the voter id law also causes confusion and controversy. Many types of id are accepted, from a driver’s license to a gun license. Curiously, student ids are not acceptable.

“When these laws are passed that introduce additional barriers to voting, it’s no secret that these laws are attempting to disenfranchise,” says Caren Short, senior staff attorney at the Southern Poverty Law Center.

Voter id laws at the polls are complemented by witness laws regarding absentee ballots. Some states require citizens to show id even when voting by mail. In Wisconsin, voters had to send in a digital copy of their ids to receive an absentee ballot in the mail—which could have been a challenge for anyone without a scanner at home during the state’s coronavirus shelter-in-place order. Some counties in Arizona have a similar requirement facilitated through an online portal. And in Arkansas, absentee ballots have to be returned with a copy of the voter’s id.

Eleven states require voters who return mail-in ballots to follow a signature checklist before their votes are counted in the election: The ballots need the voter’s signature, a witness signature, and that witness’s home address.

It’s logical to try to increase security on a ballot sent

in the mail because there’s increased risk with the ballot out of the voter’s and election officials’ sight, says Edward Foley, director of the election law program at Ohio State.

But these laws can in effect do more harm than good.

The only case of mass voter fraud since the 2016 election involved absentee ballots. In 2018’s North Carolina Ninth District congressional race, Republican candidate Mark Harris “hacked” absentee ballots through an elaborate scheme in which his team went around collecting ballots from voters while posing as election officials, and replaced the voters’ intentions with ballots they filled out themselves, without the voters’ knowledge. Those involved were then charged with fraud.

The witness signature law in North Carolina did not protect those voters. In reality, voter signature matching issues between someone’s original registration and their vote-by-mail ballot, along with witness signatures, have been found to disproportionately harm certain demographics of voters more than others.

A study from the aclu of Florida found vote-by-mail ballots in the 2012 and 2016 elections more likely to be tossed out from younger and ethnic-minority voters across the state, where only a matching voter signature is required. State election officials can reach out to voters to remedy any errors before an election, but that outreach doesn’t always take place, so it’s up to voters to track their own ballots.

In Georgia’s 2018 election, U.S. District Court Judge Leigh Martin May ruled that ballots with “mis-matched” voter signatures could not automatically be thrown out after the aclu, Georgia Muslim Voter Project, and Asian Americans Advancing Justice–Atlanta brought atten-

MAY/JUN 2020 THE AMERICAN PROSPECT 47

OUR CRISIS SUPPORT SYSTEMS tion to the high numbers of ballots being disregarded.

In Gwinnett County alone, 600 mail-in ballots were rejected because of a signature matching issue.

South Carolina requires both a voter signature and a witness signature. Absentee ballots are mailed in two different envelopes that must be mailed back, but that also come stuffed with other voting literature and brochures.

Voting rights activist Brenda C. Williams, who assists people in her community of Sumter with registration and voting, explained to the Prospect, “It comes with four to five pieces of paper … [and] if there’s one little piece of paper in the envelope with your ballot, your ballot will not be counted. Period.” That includes a quarter-sized “I Voted” sticker in one of the envelopes, which must be fished out for your vote to count.

Elections in South Carolina are run at an even more decentralized level, county by county. There, it’s up to a county election director whether or not to even reach out to voters to fix an erroneous ballot or simply toss it into an “Attention Envelope” to be destroyed 22 months later.

The Prospect found that in the 2020 presidential primary, some directors did reach out to voters, while others said this effort was not legally allowed. The law does not say anything about how to remedy a voter’s ballot.

“Navigating all of that as someone who works professionally in voting rights, [I know] you will never know the full code verbatim,” Wenger says. “You couldn’t ask one official out there, one secretary of state or poll worker, to rattle off all of those different pieces of the puzzle at each level in which we engage with elections, from dogcatcher up to president, we’re just not going to know all that. So [you’re] putting that burden on voters and then blaming them for not having it memorized or for not catching someone when they’re being given wrong information.”

It’s a fact of American democracy that some states have higher hurdles to jump than others before arriving at the ballot box, but these laws are set in place and implemented over time. Other changes can happen with one election official’s decision before Election Day or even during in-person voting, and these changes are not always effectively communicated to voters.

For instance, sometimes polling places are consolidated, moved, or completely closed down. This could be for many valid and legal reasons, but when the new information doesn’t make it from an election official’s office to a voter, it can be equally as disenfranchising as a legal obstacle.

Often the burden of sharing this information falls on national nonprofit organizations, like the aclu and Legal Defense and Educational Fund, or local grassroots groups. These groups track changes to polling places and disseminate the information to their networks to help voters get to the polls. Sometimes this means sharing

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“Even if you make great accommodations, what does it matter if voters can’t utilize them and exercise their right to vote?” information online, or leaving a volunteer outside of a closed-down polling station to direct voters to the new location, in the absence of government poll workers.

“Election administrators, elected officials, whoever, have often forfeited a lot of the work of communicating changes in the law or other things to nonprofits and advocates that don’t have the resources and shouldn’t have the obligation to let folks know about their fundamental right to vote,” Wenger says. “So often there just isn’t information updated on the [state election] websites. And if it’s not there, then where is it supposed to be? Who has the responsibility to make sure that voters in the easiest, clearest way to articulate know where they’re supposed to go on Election Day? It’s confusing and the ball is often dropped there because even if you make great accommodations, what does it matter if voters can’t utilize them and exercise their right to vote?”

DURING THE COVID-19 pandemic, the failure to commu-

nicate changes in the election systems becomes especially clear. Most states quickly postponed their spring elections, buying themselves time to coordinate alternatives to in-person voting and inform voters and poll workers about how to stay safe at the polls.

However, Wisconsin went ahead with its election as planned on April 7, despite severe poll worker shortages and pandemic hospitalization peaks still to come. Voting was relatively normal in most of the state, with the exception of personal protective equipment. But in Milwaukee, where the largest portion of black residents live, the city was reduced to five polling stations (down from the usual 180) and voters received calls on the day of the election that their polling locations were going to be closed.

This disenfranchised countless Wisconsin voters, causing some to miss the deadline for the absentee ballot alternative. Others simply couldn’t take the health risks of traveling to a consolidated polling site and waiting in line for hours to cast their ballot. “They know, if we are forced to go out and vote in this environment: Either we won’t go, which is clearly, clearly disenfranchising people from voting, or if we do go, we’re putting ourselves in mortal danger,” Lakesha Wilder of Milwaukee told the Prospect on Election Day. “So the gop, the Court who overturned our final decision to not hold this in-person election, completely screwed us. [As did] every single

Voters in Milwaukee wait in line during Wisconsin’s April 7 primary. At least 40 residents in Milwaukee who participated in the election have contracted COVID-19.

MORRY GASH / AP PHOTO

level of government.” Wilder was correct to be wary of the risks; on April 24, Milwaukee Health Commissioner Jeanette Kowalik announced that 40 residents had contracted the virus thus far as a result of the elections within the city.

What affected voters in Wisconsin in April will affect voters across the country in varying degrees, if the publichealth pandemic continues into November. And because of travel and social-distancing limitations, the normal nonprofit and grassroots support systems may not be available to pick up the government’s slack.

Election officials have known since 2016 that this year’s race would be accompanied by a unique cocktail of possible foreign-interference campaigns, increased fearmongering about voter fraud, and misinformation spread virally on social media. These ingredients remain with the addition of an actual viral public-health emergency. These existing problems, along with legal barriers to the ballot box, will be exacerbated by the stress that coronavirus has placed on the already-fragile election system. And preparations for the general election need to be made now, not in October.

AS OF APRIL, ABOUT ONE month into self-isolation

and state lockdowns, Congress has only approved an additional $400 million to assist state and local elections operations. This may sound like a lot to invest in democracy, but it’s just a fraction of the $2 billion elections experts at the Brennan Center for Justice calculate is necessary. Some advocates are also calling for a uniform guarantee on ballot access through vote-by-mail or

some other measure, as thus far, Congress’s allocation of funds does not address the many different levels of access to the ballot box.

“People are seeing how challenging it can be when every state has different processes for who can vote and how you can vote, and some states are quite accessible to all voters and the means of all people, and other states are quite restrictive and have suppressive systems,” Short says. “People are going to have some difficulty getting to the polls, and many people will want to vote by mail this year and a lot of states will not have that option.”

Some advocates are calling for Congress to require some uniformity in elections, at least for this year, Short adds.

The most aggressive legislation proposed to protect Americans’ right to vote in November came from Sen. Kamala Harris (d-ca) in mid-April. The former presidential candidate’s bill calls for $5 billion of funding to help ensure free and fair elections. Harris’s bill is also the first that recognizes the different battles to the ballot box that Americans face.

“Unfortunately, the barriers faced by voters who have historically experienced the greatest obstacles to voting are exacerbated by the coronavirus (covid-19) pandemic,” the bill reads. To respond to these barriers, Harris’s bill calls for expanded access to mail-in ballots and eliminating the “excuse requirement” to voting by mail that still exists in 14 states, while also supporting physical polling stations for those who cannot vote by mail because they may be disabled, visually impaired, or need assisted technology to privately mark their ballots.

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OUR CRISIS SUPPORT SYSTEMS

The VoteSafe Act of 2020 also recognizes the needs of voters who live on reservations and don’t have the same access to the Postal Service. It also highlights those who have language assistance needs, and the accommodations that are supposed to be made for this group per the Voting Rights Act. The bill is also the first to address the signature technicalities that cause votes to be tossed out, unlike the mailin-ballot bill Sens. Ron Wyden (d-or) and Amy Klobuchar (d-mn) co-sponsored one month earlier. Harris’s bill, if implemented into law, would cut the confusion on how (or if) election officials can help voters fix their ballots and makes remedying a signature defect a requirement. The VoteSafe Act also calls for ballot validity to be determined by two or more election officials and would give voters the opportunity to appeal the rejection of a ballot.

A BILL LIKE HARRIS’S WOULD be an energizing shock to the sometimes lethargic election management in the United States. Under the Trump administration, however, it’s highly unlikely that such a comprehensive federal law addressing ballot-access disparities would pass. Although President Trump, and many members of Congress, vote by mail in their home states, he leads the national conversation questioning the validity of vote-by-mail ballots.

Despite signing the cares Act and its $400 million

50 WWW.PROSPECT.ORG MAY/JUN 2020

appropriation for helping elections, Trump later told Fox & Friends how he felt about expanding access to voting: “They had levels of voting, that if you ever agreed to it, you’d never have a Republican elected in this country again. They had things in there about Election Days, and what you do, and all sorts of clawbacks, and they had things that were just totally crazy.”

Foley says that it’s not surprising that some elected officials do not want to expand access to the ballot box, because they fear it will cause them to lose power.

“James Madison taught us in The Federalist Papers that humans are not angels and power can corrupt,” Foley says. What is shocking to him, though, is how openly some politicians talk about wanting to keep power.

“They used to have to be really hidden and supposed to be embarrassed [but] they’ve become more open power grabs,” he adds.

Republicans have responded aggressively to attempts to expand access to the ballot box. In addition to Trump’s rhetoric, which often conflates voter fraud and security issues with equal access, most of the suppressive voter id laws and signature requirements have come from Republican officials as well.

Trump also tweeted, “Republicans should fight very hard when it comes to state wide mail-in voting. Democrats are clamoring for it.” The party has listened. Republicans in New Mexico blocked a proposed conversion of the

JULIO CORTEZ / AP PHOTO

A voter in Baltimore in 2020.

Voter-suppression laws have most harshly affected people of color.

While Republicans actively reduce access to the ballot, Democrats have not always taken steps to expand access. state’s June 2 primary to all vote-by-mail, and are fighting various attempts at expanding ballot access in Arizona, Georgia, Michigan, Nevada, Pennsylvania, Texas, and South Carolina. The Republican National Committee has committed $20 million to the nationwide legal campaign.

“We heard the president, we heard state elected officials in Georgia, both mention on the record that higher vote-by-mail turnout would be bad for them,” Short says.

“It means that our political system has become so politically polarized that one political party has determined that it benefits when fewer people turn out to vote and so it helps to suppress votes. And that is antithetical to our entire democratic system.”

While Republicans actively reduce access, Democrats have not always taken steps to expand access. Even in deep-blue New York, voters only gained access to early voting in 2019. New Jersey still doesn’t have online voter registration or same-day registration. And in the 2020 California primary, Los Angeles County completely changed its in-person poll stations from its former precinct locations to a new vote center model, with limited outreach to multilingual constituents and five times fewer polling stations overall. This caused long lines and barriers to access on Super Tuesday.

On the other hand, Utah runs elections with universal vote-by-mail access and still elected two Republican senators, Mitt Romney and Mike Lee, as well as Republican Gov. Gary Herbert.

Overall, five states—Oregon, Utah, Hawaii, Colorado, and Washington—have set up universal vote-by-mail procedures, and California is moving toward that. There is no evidence to suggest expanded voting access through more accessible vote-by-mail would help one party or another. But during a public-health pandemic, it is certain to help people vote—especially older people who are the most vulnerable to the coronavirus and the most reliable voting demographic in the country.

“You have to design political institutions recognizing that your incumbents are going to want to hold on to power and politicians are going to be motivated by false interests and political parties are going to organize themselves around their political interest and seek power … that risk has been there from the beginning of it,” Foley says.

It’s likely that the legislative battle over how to run

the November election will continue. But it’s important to note that even the most progressive legislation will not impact voters if they’re not told about these changes.

“A job isn’t complete when a bill is signed or a council votes on something,” Wenger says. “It’s when each and every voter has had a chance to vote and has been able to cast that ballot and know that it’s counted. I think sometimes that piece, that communication is not given the same kind of equal weight that it needs to be as a function of protecting and expanding the right to vote to all eligible voters.”

THIS ISN’T THE FIRST time this century that the U.S.

has been forced to engage in deep reflection on its decentralized election system, who controls it and how it can manipulated to win political power. Twenty years ago, the country was stupefied by the design of Florida’s generalelection ballots and how “hanging chads” could grind the rest of the system to a halt.

The national discourse translated into action after the 2000 election in the form of the Help America Vote Act, the last time the federal government passed legislation to implement some uniformity in voting across the nation.

It funded punch-card machine replacements and created the Election Assistance Commission.

However, a lot of the money went to buying fancy yet dubious electronic voting machines, with proprietary software or no paper trail. There’s been little investment in actually helping voters cast their ballots or training poll workers. And nothing has been offered to counteract the latest trend of legal obstacles confusing the civic system.

“I think there’s a big-picture question to ask, 20 years after Bush v. Gore: How much better is our democracy than it was 20 years ago?” Foley muses.

The legislation that came from Florida’s 2000 confusion does nothing to mend the problems in 2020’s election system. hava was not built to respond to a new wave of voter-suppression laws, increased political polarization, or Donald Trump’s rhetorical battle against civic participation. In many ways, it was fighting the last war.

After the 2020 election, will Congress again reflect on where states are failing to ensure that everyone’s votes are counted, the most basic element of our democracy?

It’s unknown whether we will have another Florida situation, but there will certainly be countless potential voters across several states excluded or tossed out of the democratic process, not through hanging chads but through new-style voter suppression.

“It’s a legitimate question and one that I would like to address, but not in an emergency,” Foley says. “I think we have to meet the emergency and then if we get through 2020 successfully, and I hope we do—then collectively we can say, ‘How did 2020 improve, or did it in this 20-year period?’”

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THE

Coronavirus and the Rise of the States In crises and wars, the national government’s authority invariably grows, while states’ power shrivels. This time, it’s the other way around.

By Gabrielle Gurley IN EARLY APRIL, AFTER the Trump administration

brushed aside New York Gov. Andrew Cuomo’s appeals for ventilators, Kate Brown, the governor of Oregon, shipped 140 of the breathing devices to help New York blunt covid-19. China chipped in with another 1,000.

Weeks later, Cuomo sent 400 ventilators to Massachusetts after its governor, Charlie Baker, came close to a public meltdown over federal interference with his efforts to buy medical supplies. And in Illinois, fearing that federal officials would cart off his state’s personal protective equipment order, Gov. J.B. Pritzker arranged a secret private “airlift” of medical supplies.

The coronavirus pandemic and President Trump’s failure to mount the barest semblance of a response set into motion a chilling, new dynamic: governors resorting to secrecy and subterfuge as they beg and barter their way around the world for medical supplies and equipment to treat the dying and at-risk. During national emergencies and disasters, Americans have long looked to the federal government to convene experts, deploy workers and materiel, dispense clear information—and provide the massive amounts of financial assistance to states, localities, and individuals, for the elemental reason that it is the only entity that can.

Instead, President Trump has refused to bring to bear

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the full power of the executive branch to combat the crisis through tools like the Defense Production Act. To the contrary, he has employed executive agencies like fema to bully states desperately seeking work-arounds to deal with shortages amid the president’s dereliction of duty.

In a complete reversal of what has long been the normal crisis or wartime dynamic, action and authority have devolved from the White House to the governor’s mansions during the covid-19 pandemic. It is the states that have emerged as the counterweight to Trumpian dysfunction, a development that has led Trump to rage against the very people confronting the daily doses of death and despair— and the fallout from his incompetence and indifference.

Reports of the death of federalism, it seems, have been greatly exaggerated.

“This is where the Constitution is showing its advantages in the independence of the states—otherwise you have a situation where the White House is dictating the tune for everybody all the way down,” says Robert Chesney, professor of law at the University of Texas School of Law. THE TRUMP ADMINISTRATION and Senate Republi-

cans appear strangely enamored of a bygone era when

MORRY GASH / AP PHOTO

Massachusetts Gov. Charlie Baker, fearful of federal confiscation, contacted the owners of the New England Patriots and secretly obtained one million N95 masks from China using the team’s jet.

the federal government didn’t do much but watch states squabble—a problem that was apparent to the nation’s founders soon after the Revolution. As the states debated a new order to replace the Articles of Confederation, Alexander Hamilton proposed investing authority in stronger executive administration for a simple reason: “A feeble Executive implies a feeble execution of the government,” he wrote in Federalist 70. “A feeble execution is but another phrase for a bad execution; and a government ill-executed, whatever it may be in theory, must be, in practice, a bad government.”

By that standard, the Trump administration, 243 years later, is the ne plus ultra of bad government, its inability and reluctance to rely on science and act accordingly having contributed to the deaths of tens of thousands of Americans. Trump’s failure to establish a national production and procurement program for protective equipment is bad enough; when compounded by his administration’s efforts to actually thwart the states from getting such equipment, it is almost incomprehensible.

“The man is emotionally and professionally not capable of handling a pandemic crisis of this order,” Terry McAuliffe, the former Virginia governor, told the Prospect. “He just doesn’t have it in him.”

Trump’s failure to fully utilize the Defense Production

Act to compel manufacturers to produce medical goods in short supply has led governors to blast the absence of a coordinated national strategy to fight the disease. “It’s one thing to say that the federal government has a plan that some states may disagree with,” says Justin Levitt, a professor of constitutional law at Loyola Law School in Los Angeles. “It’s an entirely different thing to say we have no idea what the federal plan is, we would just like there to be one, then we can figure out whether we agree with it.”

The Trump administration’s deficient response to the pandemic and its obstruction of state efforts to respond to it have both involved the Federal Emergency Management Agency (fema). The deficiencies are partly due to the agency’s weakening. In the wake of the 9/11 attacks, fema was transformed from an independent agency with Cabinet status into one part of the mammoth Department of Homeland Security, where counterterrorism and, since Trump’s ascent, immigration enforcement take priority over natural disasters. Two years ago, his administration transferred $10 million from the agency to fund ice detention operations. Last August, Trump pulled millions more from the agency’s disaster relief efforts to fund ice’s—and his—ongoing war on immigrants.

The agency’s normal purview has been single-state and

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OUR CRISIS SUPPORT SYSTEMS regional natural disasters, the responses to which characteristically last weeks, not months. It was the Department of Health and Human Services and the Centers for Disease Control and Prevention, not fema, that managed the H1N1 influenza outbreak in 2009. Pandemics and public-health crises more broadly are out of fema’s realm. “fema was not created to manage an event like this,” says Samantha Montano, a visiting professor of emergency management at the University of Nebraska Omaha.

“They did not have the resources, the staff, or the authority, really, to be in a position to manage a pandemic that is affecting the entire country.”

But as the pandemic crisis intensified in mid-March, the administration shifted responsibility for state-level coordination of the national response from hhs to fema.

The move forced the agency to scale up from more localized ways of operating in states and smaller regions to providing funding, health and safety personnel, and medical supplies to every state and territory—whereupon fema’s emergency management mission collided with Trump’s brawls with governors.

Almost immediately, fema ran into trouble “coordinating” the distribution of medical supplies to states, with the agency stepping into the role of an enforcer in a grand scheme to compel governors to genuflect to Trump.

In Maryland, Republican Gov. Larry Hogan and his wife Yumi Hogan managed to procure a $9 million shipment of 500,000 masks for state residents from her native South Korea. Hogan knew that federal officials had intercepted Massachusetts-bound shipments of masks at the Port of New York, forcing Gov. Charlie Baker to scramble for other sources, and Sen. Elizabeth Warren to fire off a letter of protest to fema. Lest such mischief befall Maryland, Hogan made sure that the plane carrying his state’s shipment landed at a state facility—the Baltimore-Washington International Airport, where the state police and the Maryland National Guard greeted it. The shipment is still being guarded at an unrevealed location.

In Colorado, Democratic Gov. Jared Polis suffered through a fraught episode designed to burnish a Republican’s reputation. After Sen. Cory Gardner, a Republican battling to keep his seat in November’s election, requested Trump’s assistance in securing ventilators, 100 of the precious devices were very publicly sent his way, enabling him to claim credit. When Polis ordered 500 such devices from a private vendor, however, he ended up with none, as fema swooped in and claimed them all. (In response to states’ objections, fema has said, “Priority rated [Defense Production Act] orders do not create a situation of ‘outbidding;’ rather, it puts the federal government requirement to the ‘front of the line’ for fulfillment ahead of other orders.”)

Trump similarly helped out Arizona Sen. Martha

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McSally, another Republican in need of an election year boost, by sending out 100 ventilators that she personally delivered to a Flagstaff medical center, enabling her to get the photo op and whatever acclaim came with it.

By doing Trump’s bidding, says Loyola Law’s Levitt, fema’s distinctive contribution has been “not just lack of guidance but active interference. It’s the injection of chaos without any real idea of how or where that chaos will manifest. The states had to step up.”

MOST POLLS SHOW THAT overwhelming majorities of Americans back their governors, while the president’s support hovers in his customary low-to-mid-40s percentiles. His public calls for rebellion in Virginia, Michigan, and Minnesota—not to mention his recommendations for injecting disinfectant—have drawn widespread condemnation and ridicule.

Some governors, by contrast, have never been so popular. Ohio’s Mike DeWine, the Republican governor and early social-distancing advocate, has seen a boost in his support, while Democrats Andrew Cuomo, Jay Inslee of Washington, Gretchen Whitmer of Michigan, and Gavin Newsom of California have won national attention through a combination of their own aggressive actions to curtail the pandemic, Trump’s attacks on them, and their pushback against his bullying.

In the absence of sane federal policy, moreover, these and other governors have begun working with their neighbors. To devise a regional blueprint to monitor health outcomes and reopen their economies with input from scientists and public-health officials, California, Oregon, and Washington established the Western States Pact in mid-April; Nevada and Colorado have also signed on. The hardest-hit Northeastern states, New York, New Jersey, Pennsylvania, Connecticut, Massachusetts, Rhode Island, and Delaware, followed suit, as did the Midwestern states of Illinois, Indiana, Kentucky, Ohio, Michigan, Minnesota, and Wisconsin.

States have established compacts before, on issues ranging from criminal justice to the environment and transportation. But there is likely no historical precedent for states “banding together in the face of inaction by the federal government,” according to constitutional law professor Annette Gordon-Reed of Harvard Law. “This situation is not like the drivers of the typical interstate compacts,” Gordon-Reed says. “This is different, as an acute health crisis in which time is of the essence and could have been ameliorated with a coordinated effort.”

In the midst of the pandemic, these ties foster better coordination and distribution of medical resources, personnel, and other needs. The groupings can also facilitate travel and transportation decision-making for states with strong commuting ties, such as Kentucky and Ohio, and

There is likely no historical precedent for states “banding together in the face of inaction by the federal government.”

New York, New Jersey, and Connecticut. They can also serve as mutual defense pacts against executive branch overreach. When the president tried to assert “total authority” over state reopenings, he retreated from the comments after sustained criticism—as he frequently does.

States also continue to benefit from a long-standing mutual-aid agreement, the Emergency Management Assistance Compact, or emac. The compact is activated during disasters after a gubernatorial declaration of emergency sets in motion the deployment of National Guard units and a roster of medical, public-health, and law enforcement mobilizations. Membership spans all 50 states, the District of Columbia, Puerto Rico, and several territories. In early April, California loaned 500 ventilators to New York, New Jersey, Illinois, Maryland, Delaware, Nevada, and the District of Columbia through the mechanism of the compact.

But emac has provided limited benefits during the pandemic. While a boon to states during natural disasters, it can’t provide that much when those disasters are nationwide, affecting all 50 states and the territories. At such times, supplies and personnel that can be deployed elsewhere are in short supply.

THE CORONAVIRUS PANDEMIC has not only widened the gap between the federal government and the states; it has also enlarged the rift between a number of states and their cities. Republican governors and legislatures accustomed to overturning local ordinances in blue cities are now wielding their preemption powers against local leaders who insist on aligning reopening decisions with public-health advice. When Republican Gov. Brian Kemp of Georgia decreed the reopening of businesses like hair salons, barbershops, and gyms, Democratic Mayors Keisha Lance Bottoms of Atlanta and Van Johnson of Savannah vociferously objected.

But reopening poses hazards in a wide range of localities, and Kemp also ran up against mayors in rural tourist towns who are not eager to see asymptomatic contagionbearing fellow citizens descend on areas that are illequipped to handle a rise in hospitalizations where such facilities can barely handle routine caseloads.

Kemp isn’t the only Republican governor to face pushback from conservative—indeed, Republican—mayors. By

the order (or lack thereof) of Gov. Kevin Stitt, Oklahoma was one of the handful of states that didn’t issue any mandates for sheltering in place or social distancing, and Stitt brought down the wrath of the Twitterverse on himself by flouting social distancing at a jam-packed restaurant. And not just the Twitterverse: Tulsa’s Republican Mayor G.T. Bynum took to the pages of The New York Times to explain his carefully considered reasons for issuing local stay-athome orders, while the Republican mayor of Oklahoma City, David Holt, issued social-distancing orders, too.

The loudest advocate for reopening business, and the loudest critic of Democratic governors who refuse to do so in the absence of data showing it’s safe, is, of course, Trump. He has endorsed noisy and, in some cases, armed protests against state shelter-in-place and social-distancing policies. For governors who base reopening decisions on science and public-health data, Trump’s demagoguery is doubly dangerous—mobilizing the potentially violent far right and threatening a second-wave return of covid-19.

Grim economic outlooks complicate the reopening calculus for states and localities that want to maintain strict social-distancing regimes. Though polling shows clear public opposition to lifting the lockdown and distancing policies until it’s proven to be safe, the government has yet to provide sufficient assistance to the record number of Americans currently without work, with survival needs that depend on income as well as health. Moreover, some Americans who’ve endured multiple months of stay-at-home orders are visibly resisting “flattening the curve” exhortations.

Beaches are filling up in warmer climes like Southern California, much to the dismay of Gov. Newsom, who still wants people to stay home.

Rather than a respite from infection and death before fall flu and election seasons, the country may see more infections in the places that insisted on being more social.

In a perverse way, new rounds of exposure and pandemic that defy all the promises made by the charlatan-in-chief may yet save the Republic by persuading the electorate to oust him in November. The pandemic has provided stark reminders of the essential work that federal, state, and local governments perform, or should perform—work that many voters forgot about after decades of antigovernment rhetoric.

These reminders might attenuate the risk “that people will lose faith in the capacity of the national government to handle national crises,” says Gordon-Reed. “There are people who wish that faith to die; but that attitude should not prevail.” During the pandemic, a number of states have stepped into the breach created by Trump’s malfeasance, but the need for a national government that America can rely on—and in which Americans can believe—is stronger than ever.

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Keynes and the Good Life Economics as practical wisdom

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Keynes, by David Low, 1934

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s the economy collapses and the death toll mounts from covid19, economists are bound to ask, “What would Keynes do?” As two new intellectual histories of the great British economist make clear, that question is about much more than technical issues of monetary and fiscal policy, the Keynesianism found in economic textbooks. The real Keynes was a philosopher in the most profound sense. His was a towering intellect in search of the good society—human well-being—on the trail of Aristotle. Keynes today would address not only a searing health crisis and economic turmoil; he would instruct us on how the crisis lays bare the rot of our decayed public institutions, and he would bid us to pursue

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His financial engineering is not why Keynes was the greatest public intellectual of his era, nor how we should distill his wisdom today. dazzling new solutions for our time.

Both James Crotty’s Keynes Against Capitalism and Zachary Carter’s The Price of Peace show brilliantly how Keynes was vastly more important to modern social thought and today’s politics than the “Keynesian models” of aggregate demand conventionally associated with Keynes today. Even in Keynes’s own time, when his magnum opus The General Theory of Employment, Interest and Money (1936) was still hot off the press, Keynes’s philosophical reflections on the social order were turned into a few mechanistic equations in disciple John Hicks’s is-lm model (1937). As a new economics student almost 50 years ago, I was entranced by the is-lm model:

The economic fate of nations could be determined by the levers of monetary and fiscal policy. Yet this model, accessible even to a first-year enthusiast, did not convey Keynes’s real messages and thinking; it diverted our attention from a far deeper and more consequential political agenda.

Keynes indeed emphasized monetary and fiscal policy as tools of recovery from the Great Depression of the 1930s. In the 1920s, he emphasized the need to break with the gold standard to enable war-ravaged Europe to surmount the chaos after World War I. And in the 1940s, he helped to lay the monetary and fiscal foundations for economic recovery after World War ii. He was an economic engineer of the greatest brilliance. Yet his financial engineering, dazzling as it was, is not why Keynes was the greatest public intellectual of his era, nor how we should distill his wisdom today. Keynes’s greater importance for us lies in the philosophical realm.

He was, I would argue, the unexcelled master of the moral virtue that the Ancient Greeks called phronesis, or practical wisdom. The Greeks were in search of the good life, or what they called eudaimonia. They believed that the good life could be achieved by cultivating moral virtues, in individual behavior and in politics as well. The leading moral virtues included practical wisdom, courage, moderation of wants, and justice, virtues that were to be pursued by each person in search of a good life, and through the collective life of the polis, or political community.

Moral virtues signified the ability to make rational choices for a good life instead of instinctive choices driven by greed and pleasure. The ability to choose the good over the merely pleasurable is what the Greeks called practical wisdom, the ability cultivated over time to judge the right action in the right circumstances, taking account of the specific context.

Keynes explained practical wisdom for economics in his remarkable tribute to Alfred Marshall, the preeminent Victorian-age economist at Cambridge University, who was

Keynes’s predecessor as Britain’s leading public intellectual on economic issues. Keynes eulogized Marshall in these terms: he study of economics does not T seem to require any specialised gifts of an unusually high order.

Is it not, intellectually regarded, a very easy subject compared with the higher branches of philosophy and pure science? Yet good, or even competent, economists are the rarest of birds. An easy subject, at which very few excel!

The paradox finds its explanation, perhaps, in that the master-economist must possess a rare combination of gifts. He must reach a high standard in several different directions and must combine talents not often found together.

He must be mathematician, historian, statesman, philosopher—in some degree. He must understand symbols and speak in words. He must contemplate the particular in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future. No part of man’s nature or his institutions must lie entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood; as aloof and incorruptible as an artist, yet sometimes as near the earth as a politician.

Every bit of this statement is remarkable, in its wit, eloquence, and wisdom—practical wisdom.

These words have lived with me as a practicing economist for decades, as a benchmark, a standard, a life goal.

I am sure that they have inspired countless others. His words epitomize phronesis: knowing how to act for the good life of society in the circumstances of the moment.

Therefore, trying to discern Keynes’s specific views—whether on trade, or money, or budget deficits, or public investments—almost surely misses the main point. Keynes did not give us a checklist of dos and don’ts other than general ones: Don’t waste human talents and physical resources

through wanton unemployment, avoidable wars, or breakdowns of social and trade relations; don’t abuse power; don’t mistake wealth for happiness; and don’t tolerate the wanton suffering of others in the belief that all will be fine in the long run or that suffering is ordained and unavoidable.

As the master of practical wisdom, Keynes honed solutions in the context in which crises arose.

His wisdom only gradually shifted the center of gravity of public opinion. Though vindicated by history, his insights threatened and still threaten elites. Yet for 30 long years, from 1914 to 1946, through challenges of two world wars and the Great Depression, nobody in public life was right more often, more deeply, more incisively, and more consistently than Keynes.

Zachary Carter’s brilliant book enables us to watch the unfolding of Keynes’s insights and the development of his practical wisdom, against the backdrop of history and Keynes’s personal life. Keynes’s early life was comfortable and optimistic—highly intelligent parents, the intellectual atmosphere of Cambridge University, a precocious childhood wherein Keynes’s genius was recognized early on, and the encouragement of those talents with other bright minds at Eton and Cambridge. As an undergraduate, Keynes fell under the influence of Britain’s leading moral philosopher of the day, G.E. Moore, from whom he imbibed the wondrous ideals of the good life and the cultivation of virtues that had been handed down in Western civilization from the Greeks. He fell into a circle of artists and future influencers who would provide the artistic and political leadership of Britain in the coming decades, and who would often serve as Keynes’s muses, guides, and patrons into the corridors of power.

Carter, a young and accomplished journalist, describes the fateful motorcycle ride that a young Keynes of 27 years took to London in July 1914 when beckoned to the British Treasury to brainstorm on the bank run that followed the start of World War I. Keynes dazzled the

THE PRICE OF PEACE: MONEY, DEMOCRACY, AND THE LIFE OF JOHN MAYNARD KEYNES

BY ZACHARY D. CARTER

Random House

KEYNES AGAINST CAPITALISM: HIS ECONOMIC CASE FOR LIBERAL SOCIALISM

BY JAMES CROTTY

Routledge

older assemblage with an ingenious approach to halt the run; and on that basis won his seat at the Treasury table to help Britain, then the center of global finance, to manage the complex finances of the war years.

The Great War gave Keynes three great and interlinked epiphanies that would define all of his subsequent thinking. The first involved the question of mobilizing industry for the war effort. Keynes realized that the economy must be viewed as a whole— as a macroeconomy—rather than as the mere assemblage of households, businesses, and markets. Britain had to shift resources to the war effort, and away from other activities. The system as a whole had to be managed, the core idea of the new macroeconomics. Indeed, the war planning in both the U.K. and U.S. gave rise to new “national accounts” data that would eventually become the gross domestic product, the measure of overall economic activity.

The second involved the linkages of money and finance to the real economy. Money, it might seem, is just a unit of account—pound sterling or dollars—for the trade of real goods. More money in circulation might change the sterling or dollar prices of goods and wages, but it was not so clear why a change of money would affect output and employment. And yet it did. Managing the macroeconomy was intimately linked to managing money and finance, in ways that Keynes brilliantly elaborated in the 1920s to 1940s, and that became the foundational ideas of modern macroeconomic policy.

The third idea was the most fundamental. Once Keynes realized that there was indeed a macroeconomy, one that could be managed for purposes of war or to maintain the peace, for promoting prosperity over penury, he intuited and reasoned deeply that the macroeconomy must be managed for the good. Economic policy must be guided by phronesis, practical wisdom for the social good. There was no reason to tolerate economic crises, still less to have them be the result of greed.

Economics was a matter of choice, not just for individual consumers, but for

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societies as a whole. Economics, in Keynes’s hands, returned to become a moral science, where Aristotle had placed it in The Politics, and where Adam Smith had put it in The Theory of Moral Sentiments in 1759, before placing economics in the cause of wealth in The Wealth of Nations in 1776.

Keynes believed ardently that scarcity—the “economic problem,” as he called it—was on the way to a definitive end. There was already a great distinction between wealth and wellbeing, argued Keynes, and he came down all his life on the side of wellbeing, not only in the value of leisure and learning and arts for all, but in the need to share the benefits of progress widely to ensure the well-being of all.

Carter wonderfully describes the well-known story of how Keynes became a leading public intellectual—perhaps the leading public dissenter—with his book The Economic Consequences of the Peace in 1919, which railed against the harsh terms of the Treaty of Versailles that ended World War I. Rather than expressing Woodrow Wilson’s idealistic Fourteen Points, the Versailles Treaty was the product of calculating, conniving, and often vindictive politicians who produced a riot of instability, recrimination, tangled war debts, burdensome reparations against Germany, and ruthless advances of European imperialism (most notably into the Middle East).

Keynes gave prophetic warning that the harsh and cynical treaty would cripple Europe’s economy and politics, and eventually give rise to an even worse conflagration in the future. He warned that harsh terms would cripple economic recovery and lead to calls for vengeance and thereby to a spiral of violence. A hundred years later, the brutal eloquence and piercing accuracy of Keynes’s words retain their sting. On the inter-allied war debts that had sprung up during the war, and which Keynes argued should be canceled in the mutual interest of the creditor nation, the U.S., and debtors alike, he warned:

On the one hand, Europe must depend in the long run on her own daily labor and not on the largesse of America; but, on the other

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hand, she will not pinch herself in order that the fruit of her daily labor may go elsewhere. In short, I do not believe that any of these tributes will continue to be paid, at the best, for more than a very few years. They do not square with human nature or agree with the spirit of the age.

Probably no few words in the economics canon have had more effect on my own career. I read these words as I advised Bolivia in 1985, and was encouraged and inspired by Keynes to argue (successfully in my case, as the way had been prepared by Keynes and history) for the deep cancellation of Bolivia’s debts. I reread them and quoted them again as I advised Poland in 1989 and urged Poland’s creditors to cancel most of the Soviet-era debts to give Poland a fresh start as a post-Soviet European democracy. Keynes’s wisdom and the lessons of history at least implicitly informed the creditors when they heeded Poland’s call for debt relief.

Keynes lost the battle over reparations, and went on to lose other policy battles in the 1920s and 1930s.

He proposed ingenious schemes for restoring financial stability in Europe in the 1920s, new ways to stabilize the price level rather than the price of gold only (as in the prevailing gold standard, which Keynes believed to be a dangerous anachronism), and new ways to use public investments financed by public deficits to restore full employment and output. The writings of the 1920s are scintillating: brilliant, eloquent, ingenious, humane. And yet they did not carry the day. Keynes described the truth well in 1931 when he described his role this way, as quoted

by Carter: “During the last 12 years I have had very little influence, if any, on policy. But in the role of a Cassandra, I have had a considerable success as a prophet.”

Keynes’s philosophy by the late 1920s was indeed a radical one, a point rightly emphasized by both Carter and Crotty, an emeritus economics professor at the University of Massachusetts at Amherst. It was becoming “socialist” in one overriding sense: It aimed for the well-being of

society as a whole. Keynes described his “liberal socialism” this way: [A] system where we can act as an

organized community for common purposes and to promote social and economic justice, whist respecting and protecting the individual—his freedom of choice, his faith, his mind and its expression, his enterprise and his property.

That is, of course, a rather wide berth for the definition of socialism.

Keynes was taken with three abiding truths. First, scarcity had diminished, so that there was enough to go around, the result of generations of technological advancement. Second, it was possible, and therefore morally required, to move resources within the macroeconomy to meet the needs of all. Third, markets alone would not do that, but must be accompanied by government planning and policies to ensure social stability, basic economic justice, and full employment.

Market forces if left alone could produce mass unemployment because of failures in finance, and to extreme inequalities of income that were injurious to the poor, destabilizing for politics, and perverse for long-term economic improvement.

Crotty emphasizes that Keynes championed specifically the socialization of investments and public-capital boards to manage society’s investments in industry and infrastructure.

Crotty quotes Keynes in Chapter 22 of the General Theory: “I conceive, therefore, that a somewhat comprehensive socialization of investment will prove the only means of securing an approximation to full employment.” Keynes stipulates that such a policy would involve “all manner of compromises and of devices by which public authority will cooperate with private initiative,” and that it is “not the ownership of the instrument of production which it is important for the State to assume.”

The state, rather, should determine “the aggregate amount of resources” devoted to investment and “the basic rate of reward to those who own them.”

Crotty is right to underscore Keynes’s emphasis on the government’s role in promoting the aggregate of domestic investment, and for public investments, for their own

SIPA USA / VIA AP

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merit and to stabilize aggregate investment spending. And yet it’s problematic to take Keynes’s recommendations as literal guideposts for current policy. Keynes was not wedded to the details of policy; he was intent on finding practical solutions to challenges of the day. He endorsed a wide range of measures, sometimes contradictory. He improvised.

He was often “as near the Earth as a politician.” He wooed liberals and he wooed Marxists (especially among students at Cambridge in the 1930s), as well as bankers. He endorsed expedients (including the famous and indelible image in the General Theory of burying containers of money to spur private businesses to dig them up—with a multiplier greater than one on employment and output).

Most importantly for us, Keynes would be the first to say now that the times have changed, again. The solutions of the 1930s cannot be taken as the solution for the 2020s. We are incomparably richer, and therefore incomparably more able to meet everyone’s basic economic needs.

The moral and practical case for economic justice is as powerful as ever.

Keynes would again bid us to think about the macroeconomy as a whole, society as a system, and therefore society-wide solutions for our common purposes. He would likely subscribe to “liberal socialism” today, in regard to economic and social justice while respecting the individual, but would no doubt call for new—and ingenious—solutions for our day.

Carter’s book is wonderful for taking Keynes’s story across the ocean after World War ii as it played out in the United States, which succeeded Britain as the apex of the global economy. Keynesian aggregate demand management would become a core pillar of U.S. economic policy. Paul Samuelson, James Tobin, and Robert Solow, the great macroeconomic titans of my early academic years, put Keynesian stabilization policies to work, and to work effectively, until Lyndon Johnson aimed both to fight the Vietnam War and build a Great Society at the same time in the second half of the 1960s, ending in a bout of inflation. Global turmoil followed, with the collapse of the dollar-based global monetary

Keynes (center) at Bretton Woods, 1944

system that Keynes had helped to launch at Bretton Woods in 1944, and with the oil price shocks of an ascendant opec. Since then, faith in Keynesian aggregate demand management has waxed and waned. It found an adherent in Barack Obama in 2009, who deployed Keynesian stimulus spending and backed an aggressive monetary expansion to fight the financial crisis of 2008.

Yet Crotty and Carter are on the mark that the U.S. “Keynesians” adopted the engineering part of Keynes without enough of the philosophical commitments. Paul Samuelson, the towering economist of his age, who wrote the “Foundations” of the new mathematical economics, married Keynesian aggregate demand management with a mostly free-market vision of economics, one in which a fully employed economy would proceed to allocate resources mostly on the basis of market forces. (One must be careful though in describing Samuelson as endorsing free markets. He certainly did, but provisionally and subtly.) What was underemphasized was the vision of common purpose, and social and economic justice. Keynesian economics became a mere set of tools, not a guiding philosophy, still less a practice of phronesis. Not only Republican presidents including Reagan and the Bushes, but also the Democratic presidents Clinton and Obama, abandoned the aims of social and economic justice in surrender to the demands of the rich and powerful, who championed the call for a new laissez-faire in order to enjoy tax cuts and deregulation while despoiling the environment.

The main U.S. proponent of the

“During the last 12 years I have had very little influence, if any, on policy. But in the role of a Cassandra, I have had a considerable success as a prophet.”

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original Keynesian moral vision was John Kenneth Galbraith, who was attacked harshly not only by the economic oligarchs but also by many “Keynesians” in academia.

Which brings me to our moment, the worst crisis since the Great Depression. We are facing not only a new virus but also a new kind of economic crisis. For the first time in modern economic history, we have deliberately shut down much of the economy to break the transmission of covid-19. We display the intellectual confusion of the moment by labeling as “stimulus” the legislation to pay workers and firms during this shutdown period. This is not stimulus, but income maintenance during a temporary society-wide quarantine.

What would Keynes recommend? He would surely advocate a strong role of government to deploy the tools of public health, including testing, tracing, and isolating infected individuals. He would have ingenious schemes for restarting the economy once the virus itself is defeated. Public investments would be a large part of the response. Most importantly, he would urge that we act as an “organized community for common purposes.” The covid-19 pandemic should rouse us, Keynes would insist, from the depths of our neoliberal fantasies. With tens of thousands of tragically and unnecessarily lost lives, with a for-profit health system that does not ensure basic public health, Keynes would bid us to launch a new era of economic and social justice, using the powers of government for our health, well-being, and economic needs, while respecting and protecting the individual. In this, Keynes would speak directly to both our hearts and heads, as he did to his own generation with such abiding and lasting wisdom, decency, and insight.

Jeffrey Sachs is University Professor at Columbia University and director of the Center for Sustainable Development. He directs the U.N. Sustainable Development Solutions Network on behalf of U.N. SecretaryGeneral António Guterres, and has been special adviser to three U.N. Secretaries-General.

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To Be Studied, or Pitied?

Two books try to understand the other America, and stumble along the way.

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t is easy to get lost in the frustration of navigating a demanding career as a well-educated professional. The absurd cost of college, the low-paying internships and adjunct positions that have to be navigated, and the outof-reach real estate prices in the few neighborhoods close to those jobs can erase any thoughts of privilege.

For much of America these problems are luxuries, because they come with expectations of something better, and a feeling that someone will listen to you. You might be on the lowest rung of a ladder, but you are on the “right” ladder, and with enough hard work and enough complaining, you can move higher or change things.

Go outside the handful of neighborhoods where professionals cluster, and their problems will immediately seem small. Go to Gary, Indiana, and see street after street of boarded-up homes, abandoned after factories closed. Those who couldn’t leave, almost all black, now live in perpetual decline. Go to Wheeling, West Virginia, and see empty lots of discarded needles, thrown away by people numbing their pain.

In these communities, people are not on the right ladder. Hard work isn’t going to move them higher.

Their complaints won’t be published in a New York Times op-ed, and won’t generate thoughtful discussion.

Instead they will often be dismissed as the lazy, dumb, racist, or angry ramblings of someone who doesn’t know their place.

You don’t have to go far to see people stuck on this ladder. You don’t have to leave the Acela corridor, you just have to get off the Acela. The pain and despair that fills so much of America fills large parts of Bridgeport, Baltimore, and New York City. Hunts Point in the Bronx, just miles from some of the country’s most elite colleges, has a shooting gallery on a bridge above the

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train tracks. Every few hours, a group of homeless addicts, done injecting themselves with heroin, laugh or throw garbage at the Acela passing yards beneath them.

Two new books, one by Anne Case and Angus Deaton, the other

by Nicholas Kristof and Sheryl WuDunn, focus on the pain of those stuck on the bad ladder. Each is an example of the two narrow ways well-intentioned elites deal with lesssuccessful people: As a thing to be studied, or a thing to be pitied. It is hard not to come away from reading both books and realize it is better to be studied than pitied.

Case and Deaton, both economics professors at Princeton, have rightfully received praise for their research into America’s pockets of socioeconomic depravity, so bad that people are dying at alarming rates of what they have called “deaths of despair.”

Their new book tries to further contextualize this epidemic sweeping through working-class America by rightfully placing it in the larger framework of a failed meritocratic system, showing that the deaths are a canary in the coal mine pointing to much deeper societal problems.

While this should be common sense to most people, Case and Deaton approach the problem by making the type of argument that can convince academics of its seriousness: with quantitative national data. And they bring the data. Lots of it.

The first part of the book illustrates the strength of that approach by placing our current problems in historical and economic context.

They show how our country’s industrial shift, like offshoring factories to whichever country has the least regard for human, labor, and environmental standards, has crushed one group of Americans while enriching another, producing a gap.

This gap spans across race, with

DEATHS OF DESPAIR AND THE FUTURE OF CAPITALISM

BY ANNE CASE AND ANGUS DEATON

Princeton University Press

TIGHTROPE: AMERICANS REACHING FOR HOPE

BY NICHOLAS D. KRISTOF AND SHERYL WUDUNN

Knopf

white, black, and Hispanic working classes all facing despair. While welleducated Americans benefit from free trade and more open borders, the rest of the country is either stagnating or declining.

For waking up academics and elites, especially their fellow economists who have aggressively supported offshoring, the book deserves to be applauded and awarded the awards academics give each other.

They have done a little bit of the Lord’s work, and certainly a lot of the dean’s work.

But the later sections would have benefited from some physical boots on the ground in places that are suffering. The pitfall of quantitative analysis from afar is that the people impacted individually lose their voice and collectively their agency. They risk becoming data to understand, not people to listen to and learn from, making it harder to understand why they might do things that better-educated readers and researchers wouldn’t.

Case and Deaton are good enough scholars to understand this potential pitfall, so they fill in the quantitative data with data from interviews. This helps them to realize being stuck on the wrong ladder doesn’t just result in people killing themselves or turning to drugs, but also in a lower quality of life, earnings, family stability, and community. They are also astute enough to see how things other than money and jobs matter, such as religion, place, and family.

This is a wonderful first step, but it can’t replicate spending years in a neighborhood where you are woken up nightly by sirens, or a desperate knock from a neighbor whose son just od’d, or the police investigating a killing out front. It is one thing to see the data turn south; it is another to see at a visceral level why someone might make what looks like a reckless choice. People in these communities deal daily with friends, relatives, and others who have lost their job, their home, their family, and have nobody to complain to.

While a good job is essential and a more robust health care and social safety net helpful, large parts of America have lost a sense of stability and

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purpose. The ladder they are on has one rung. That rung is shaky, and they know it. Their parents used to climb that ladder, moving from part-time jobs in high school to a factory job that enabled them to buy a home, marry their sweetheart, build a family, go to church, join a softball league, and then watch their children and grandchildren do the same thing. That ladder didn’t require college. It didn’t require getting into a résumé arms race with your neighbor, and certainly not a bunch of people 8,000 miles away.

Now that ladder is broken, and the people who left town, who went off to Princeton or Yale, climb a ladder that goes into the stratosphere. Many of them look down at the people they left behind and sneer, or laugh, or express pity, if they bother to look down at all. It is humiliating and strips people of their dignity.

A windfall of targeted programs and expanded empowerment zones and a greater social safety net, while helpful, won’t solve this problem.

The two ladders are the problem.

People who are on the “bad” ladder are not there only because they didn’t have the right opportunities. Many of them didn’t want to go to college.

It’s not their thing, it isn’t what they value. They have different priorities, ones that put a premium on faith, place, and family.

Understanding that is hard when you are in academia. Case and Deaton have a high hill to climb, and I deeply respect them for taking this trek—though I am not sure they have gotten to the top of the hill yet.

KRISTOF AND WUDUNN come from another elite institution, the editorial page of The New York Times. In their new book, Tightrope, they approach the problem of “deaths of despair” in classic op-ed page style. They want the reader to know they have empathy and that the reader should too.

They also want the reader to feel better about themselves after reading this book, so in grand absolving fashion, they offer up ten actionable ways “to help in the next 10 minutes.”

It feels like the equivalent of a yellow donation “wristband,” to allow you to do your part and then move

The pitfall of quantitative analysis from afar is that the people impacted become data to understand, not people to listen to and learn from.

on, complete with the obligatory endorsement by Bono.

The list includes some admirable advice, such as volunteering in a homeless shelter. And then there’s Tip 10: “As we were working on this book, our cherry orchard on the Kristof farm in Yamhill needed to be replaced, so after seeing the need for jobs in the area, we decided to plant the land with cider apples and wine grapes. Cider and pinot noir will employ more local people than other uses of the land, and we’ve already hired a couple of local people with troubled histories to clear the land.”

This isn’t a bad thing at all. We all could use more empathy, understanding, and be open to working with people “with troubled histories.” Maybe not just as the hired help, though.

Throughout the book there is a noblesse oblige attitude; not the old country club type, but an updated version steeped in well-to-do educated leftist language. Again, that isn’t a bad thing by itself, but here it too often comes with an uncomfortable savior vibe.

Kristof and WuDunn are hardworking journalists dedicated to their task, so they do put boots on the ground to get beyond the data, traveling to working-class communities in the U.S. for interviews, particularly Kristof’s Yamhill, Oregon, hometown, where his family farm is located.

Despite this hard work and genuine empathy, the authors can’t break out of their worldview. They can’t get beyond wanting to get people on the good ladder, and not dismantle the system of two ladders. They don’t emphasize devaluing the meritocracy, as Case and Deaton do, but rather take on the easier feel-good task of figuring out how to get talented young people on their preferred path.

Or to use their metaphor, have access to the escalator, so they can escape.

Their top two policy suggestions are about getting people started on that ladder early. Number one is “High-quality early childhood programs,” and two, “Universal highschool graduation.”

When they tell the story of Ann Curry (now a famous journalist), who overcomes her past by making it to

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the top, they write: “America holds itself back when so much talent is left on the table … a nudge can make all the difference … to make it easier for young people to achieve their potential.”

But potential here is so narrowly defined. It is about the résumé arms race, about getting gold stars in elementary school, valedictorian status in high school, then leaving your town behind for a good college and maybe even The New York Times.

In the end, Kristof and WuDunn hold up their ladder as the solution, not the problem. They insist that working-class kids leave behind their former lives, give up their worldview, and become educated. All with guidance, help, and enlightenment from America’s new noble class.

This book rises above this attitude at times, with glimmers that the authors recognize there is more to the story, that they and all of the wellintentioned nonprofits funded by billionaires are part of the problem.

Between the editorializing, it gives readers glimpses into how the other half live, allowing them to come to their own conclusion.

Yet in the end, it sits in a genre that is at worst condescending, and at the very worst a form of colonialism. The choices are: Climb my ladder, and if you don’t you will die an early death.

Believe what I believe, or you will sink further behind. Be what I am, for to be anything else is to be profane.

This intellectual colonialism from the educated elite strip-mines America of its talent, taking what they want and leaving behind towns filling with death and despair. Lots of Americans want to stop being told they are on the wrong ladder. They want to live in a country that doesn’t insist you have to live like the elites.

They want to stop being considered losers for not wanting to shape their life around building a résumé.

They want to be respected for what they believe and what they value, not studied or pitied.

Chris Arnade is a writer and photographer focusing on poverty in America. His book, Dignity: Seeking Respect in Back Row America, was published in 2019.

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Death in Venice and America Reflections on the fragility of culture in a time of pandemic

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n October, my husband, Art, and I, along with a dear friend, Jean, took a very long-delayed vacation to Venice. We had planned and canceled this trip several times previously because of unexpected work deadlines and family obligations.

Art and I had been to Venice on our honeymoon 35 years earlier, and the decaying peach and mango, with the occasional splash of faded turquoise, of the facades; the sound of footfalls on the cobbled streets and of wavelets lapping the stone walls of canals; as well as the play of light on the water at dusk had inhabited my dreams ever since. Although not particularly prone to morbid thoughts or to preparing “bucket lists,” we recognized that we, as well as Venice, were of a certain age, with “underlying conditions,” and we wanted to see it in all its glory one more time before we died.

On the long flight over the Atlantic and the Alps, I reread Death in Venice, Thomas Mann’s 1912 novella about a famous novelist in his fifties, Gustav von Aschenbach, suffering from writer’s block, who hesitates and then travels impulsively to Venice, where he becomes smitten with a beautiful 14-year-old boy, and soon succumbs to a cholera epidemic sweeping Venice.

Mann’s story is about passion, desire, decay, and death.

While Aschenbach bears little obvious resemblance to any of the three of us, the reasoning for his reluctance to travel felt uncannily familiar: too much occupied by the duties imposed on him by his ego … too overburdened with the duty of production, too little interested in distracting himself to be a faithful lover of that gay outside world, he had contented himself wholly with that knowledge of the Earth’s surface that can be gained by anyone without having to abandon his circle … I noted this to be quite an accurate description of how Art and I have lived our culturally rich, but very local, lives.

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I chuckled to myself about how the internet had facilitated the realization of those instinctual proclivities even while jet travel had made the world ever smaller and more accessible.

The moment we landed in Venice and began our delightful week of unabashed touristing, whatever inchoate identification I had had with Aschenbach was largely forgotten.

Only a few weeks before the arrival of the devastating and record-setting acqua alta and only months before covid-19 roared into the Veneto, leaving a horrifying trail of what my medical training led me to call “morbidity and mortality,” Venice presented its most alluring, seductive, and benign face to us. Venice, apart from the ethnicity of the crowds of tourists, now mostly Chinese rather than German and British, looked much the same as it had decades ago.

The years had not altered the images that had continued to inhabit my memories and my dreams. The afternoon light reflecting off the palazzi along the Grand Canal, the Renaissance paintings, the stone churches, the sounds and even the smells, so disturbing to Aschenbach, were a feast for our senses. We wandered the streets, visited the Scuola Grande di San Rocco, lingered over the Bellinis, Titians, and Veroneses in the Accademia, and sat entranced, drinking perfectly roasted espresso, in a café in one of the small piazzas as a street musician played a Bach fugue on a glass harmonica. We felt that, rumors to the contrary notwithstanding, Venice was not crumbling but was intact and still stood as a living testament to the endurance of a unique artistic and architectural sensibility.

There were two, what seemed at the time minor, moments of ironic personal connection for me with the story of Gustav von Aschenbach, which came and went, hardly noted.

On the evening of our arrival, as we

were walking across the Piazza San Marco, pushing our way through the throngs of camera-laden tourists, my wallet was deftly removed from my handbag, much as Aschenbach had been scammed by the Charon-like rogue gondolier who conveyed him from his arrival at the train station to the Lido, answering his question about the fare with the enigmatic and sinister: “You will pay!” But thanks to the miracles of modern technology, my credit and bank cards were readily canceled with a brief online visit to Bank of America and I was left with no lingering unease or conscious anxious association to the final voyage across the Styx.

And then, on the fourth day of our visit, Art was stricken with a gastric flu–like illness through which he soldiered on bravely, not wanting to miss any opportunities to see the sights or impede our enjoyment of this special vacation. But on the last afternoon, he had such gi discomfort and overwhelming fatigue that we abandoned our plans to visit the Ghetto and went back to the hotel early to rest. Not having eaten any rotten strawberries, as Aschenbach had, or indulged any worry that he might have contracted cholera, Art peacefully slept it off while Jean and I went out for dinner. But I wondered, fleetingly, whether the wellpublicized ecological devastation of the city and its surrounds by the vast numbers of tourists who visit annually and the massive cruise ships dumping waste into the majestic Grand Canal might have polluted the drinking water, not with cholera vibrios but the more familiar 21st-century pathogens: E. coli or norovirus.

Aschenbach’s first day in Venice is marked by a profound sense of unease about the quality of the air he is breathing. He feels feverish, worries about the polluted and unwholesome atmosphere, and he decides to leave the city immediately. As we all remember, perhaps from high school English class, his coup de foudre for the beautiful young boy, Tadzio, causes him to change his mind again quickly and return to the hotel. But rumors of the presence of a mysterious malady, mentioned and then denied, hang in the fetid air, which

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IPA /ABACA /SIPA USA / VIA AP IMAGES

Midday on a Wednesday in Venice as the city goes into seclusion in response to the disastrous spread of the novel coronavirus within Italy, March 11, 2020

is tainted with “a sickly sweet smell reminiscent of distress and wounds and suspicious cleanliness.” Notices begin to appear posted around the city suggesting that visitors avoid eating shellfish “due to certain gastric conditions to be expected in this season.” He notes that most of the other German tourists are beginning to leave the hotel. The local newspapers “reported rumors and fluctuating numbers, printed official announcements and questioned their veracity.” Fake news, Venetian style?

The disease that sickened and killed Aschenbach in Venice in 1911 was, like covid-19, seen as a mysterious product of an exotic culture. The cholera vibrio had escaped its original oriental habitats due to increased world travel and globalization of trade and had begun to infect Europe through the Mediterranean and through that extraordinary portal, Venice, that had long been the link between East and West, Asia and

Europe. Born in the sultry swamps of the Ganges delta, ascended with the mephitic odor of that unrestrained and unfit wasteland, that wilderness avoided by men, in the bamboo thickets of which the tiger is crouching, the epidemic had spread to Hindustan, to China, to Afghanistan and Persia and even to Moscow. But while Europe was fearing the specter might make its entrance over land, it had appeared in several Mediterranean ports, spread by Syrian traders, had arrived in Toulon, Malaga, Palermo, and Naples, also in Calabria and Apulia. The North seemed to have been spared. But in May of that year, the horrible vibrios were discovered in the emaciated and blackened bodies of a sailor and of a greengrocer.

The deaths were kept secret. But after a week it had been ten, twenty or thirty victims, and in different quarters.

An Austrian man had died in his hometown under unambiguous circumstances, after he had vacationed

The disease that sickened and killed Gustav von Aschenbach in Death in Venice was, like COVID-19, seen as a mysterious product of an exotic culture.

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for a few days in Venice and so the first rumors of the malady appeared in German newspapers.

As in the case of covid-19, rumors abounded about the terrifying pathogenic organism, the cholera vibrio, in early 20th-century Venice. Public “messaging” was evasive. The extent of the danger was minimized. As always in epidemics, certain alien populations were accused of having imported the disease. In the case of the Venetian plague of cholera, it was Jews and Gypsies. Elsewhere in Europe and America, other populations were blamed, including Filipinos and South Asians. Thomas Mann and his wife had visited Venice during this time and survived. But Aschenbach died possibly due to contamination by the water in which his strawberries were washed. Venice survived that catastrophe and went on to enchant subsequent generations of tourists, college students, wanderers, and artists.

We in the U.S. were told on January 22 of covid-19 that “we have it totally under control. It’s one person coming in from China. It’s going to be just fine,” much like the postings about shellfish in Venice, a minor inconvenience. Today, the message from Donald Trump is more dire but no less boastful. But Venice, as we know it, the timeless embodiment of grace, beauty, sensuality, decay, and fragility, may not survive the ravages of the rising waters and the emergence of the novel virus.

We Americans have been warned by scientists, writers, and artists of the coming threats to our way of life for some time and, Trump’s statements to the contrary, we have been warned specifically about the likelihood of emergent pathogens that we could not contain or treat. It is not just Venetians who have awakened to a new reality. After covid-19, America may look like a crumbling and decayed museum of modern culture, similar to Venice’s citywide museum of the Renaissance, which is sinking under the tides of time.

Stephanie Engel is a psychiatrist in private practice in Cambridge, Massachusetts. She is also a consultant in the field of global mental health.

MAY/JUN 2020 THE AMERICAN PROSPECT 63

Parting shot

NIGHTLY CORONAVIRUS PRESS BRIEFING

TRUMP APPEARS WITH LUTHER, HIS EMPATHY TRANSLATOR* But sort of I have been brutalized for the last four years. I used to do well, before I decided to run for politics. But I guess I’m doing OK, because, to the best of my knowledge, I’m the President of the United States, despite the things that are said.

Press Conference, April 13

The “Ratings” of my News Conferences etc. are so high, Bachelor finale, Monday Night Football type numbers.

Twitter, March 29

No, I’m not concerned at all. No, we’ve done a great job with it.

Press Conference, March 7

I don’t take responsibility at all.

Press Conference, March 13

And then I see the disinfectant, where it knocks it out in one minute. And is there a way we can do something like that, by injection inside or almost a cleaning, because you see it gets in the lungs and it does a tremendous number on the lungs.

Press Conference, April 23

This is going to be a trying, no that’s not a strong enough word, this is going to be a wrenching couple of months for many Americans.

Be assured that I know what life is like for people not lucky enough to live in the White House, and we are doing everything in our power to bring this dark chapter to a close.

It is clear that people will be harmed by the inevitable downturn that the pandemic has caused. Rest assured, we will make sure that folks have the resources they need to be comfortable during the inevitable high unemployment that is coming.

I want to apologize to each and every American for the mistakes I, and my administration, have made.

For the love of God, don’t drink bleach.

—Jandos Rothstein

*With apologies to Key and Peele

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When we go back to school,

we won’t be going back to this.

Photo: Marmaduke St. John / Alamy Stock Photo

By Randi Weingarten, President AMERICAN FEDERATION OF TEACHERS e must reimagine what it will look like when students and staff return to school buildings.

Many Americans are working during the pandemic, either in essential frontline jobs or from home. For more to be able to return to work, their children must safely return to school.

When we return to school buildings, we must be better prepared than we were when the pandemic’s virulence forced their closures. The Centers for Disease Control and Prevention created a plan for how and when to reopen public places, but the Trump administration has prevented its release.

The American Federation of Teachers has developed the needed guidance. The AFT’s “Plan to Safely Reopen America’s Schools and Communities” provides a detailed road map grounded in scientific evidence and public health protocols that charts a path to safely and responsibly reopening school buildings and other institutions that are crucial to the wellbeing and economic vitality of our communities.

The AFT’s plan calls for communities throughout the United States to:

1. Maintain physical distancing until the number of new cases declines for at least 14 consecutive days. Reducing the number of new cases is a prerequisite for transitioning to reopening plans on a community-by-community basis.

2. Put in place the infrastructure and resources to test, trace and isolate new cases. Transitioning from community-focused physical distancing and stay-in-place orders to case-specific interventions requires ramping up the capacity to test, trace and isolate each and every new case.

3. Deploy the public health tools in public schools that prevent the virus’ spread, and align them with education strategies that meet the needs of students. Safety measures in schools could include screening students and staff, handwashing upon entry, daily sanitizing of schools, smaller class sizes and staggered scheduling.

4. Involve workers, unions, parents and communities in all planning.

Each workplace and community faces unique

challenges related to COVID-19. To ensure that reopening plans address those challenges, broad worker and community involvement is necessary.

They must be engaged, educated and empowered.

5. Invest in recovery. Federal aid to states, cities and towns is essential to help combat the coronavirus; to safeguard public education, healthcare and public safety services we rely on; to get people back to work; and to reopen the economy. States cannot go bankrupt—they, cities, towns and public schools and colleges are key to the country’s recovery and need the funds in the aid package House Speaker Nancy Pelosi is putting together.

America’s public schools have always been centers of their communities. This crisis provides an opportunity to reimagine our public schools so they can serve as models for how the country can both prioritize health and safety, and ensure broadly shared opportunity in America’s economic recovery.

Read more at aft.org/reopen.

Follow AFT President Randi Weingarten: www.twitter.com/RWeingarten

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