“S.ay it loud, say it proudly: we are all Keynesians now. ” This reef Among the public spending attributed to independent marketer Milton Friedman is also a good description of U.S. Senators and White House officials negotiating the third stimulus package amid record unemployment claims totaling 3.2 million and little chance of one early recovery.
At more than $ 2 trillion, the bill proposed earlier this week is the single biggest impulse in U.S. history. Republicans in the White House and Senate are clearly not the deficit hawks they claim to be. You shouldn’t be either. The deep economic problems in the United States, exacerbated by the spread of the corona virus worldwide, have made it clear that major deficits are not only inevitable but also necessary.
A handful of conservative politicians even take unexpected political positions: Take Mitt Romney is pushing for money transfers or Chuck Grassley defends a generous expansion of unemployment insurance. But be careful: your positions do not pave the way for a political realignment in favor of progressives. Instead, the provisions in this package – industrial bailouts, monetary aid, expanded unemployment insurance, and emergency relief for educational institutions – represent an effort to get the economy back to what it was a few months ago. The big assumption here is that things were good back then. It wasn’t you.
Decades of economic crisis have led to stagnating wages, falling economic mobility and a weakening of the bargaining power of the working population. This crisis, like the previous financial crisis in 2008, has a more direct, immediate and serious impact on those working people who have lived in precarious economic conditions.
COVID-19 increased the size of an economy that got out of hand dramatically: one in which the rules were manipulated at the expense of the workers. Republican leadership is investing money in the economy to return to a status quo with concentrated corporate power, widespread inequality, and few rights for working people. The fiercely competitive successes of the Senate Democrats in this bill are an attempt to prevent the incentive to further exacerbate the shortcomings in our economy: to protect the few collective agreements that working people have, to limit the ability of companies to save bailouts and to enrich their shareholders use increasing cash payments to working Americans.
This struggle made something less unstable for many Americans today. Tomorrow is still uncertain. There is a difference between relieving the economic burden on the working class and gaining the power of the working class in the economy. Relief is a break from harm. Power underpins our ability to change our own lives. A progressive incentive bridges short-term relief measures such as expanding unemployment insurance with investments in long-term protection of workers, access to care and a Green New Deal-style incentive.
For example, the Senate stimulus package now protects existing collective agreements for unionized workers in companies that receive federal loans. A transformative approach would extend bargaining power to all employees of companies that receive loans. Or it would prescribe that the employees of these companies have a seat on the company boards. We haven’t dramatically updated our federal labor laws since the FDR era. This failure is one of the reasons why the recent economic recovery has benefited those at the top.
The Senate bill includes $ 377 billion in aid to small businesses to keep them afloat and keep people on their payroll. That is the right thing. However, it is about places where the “right” is a hope and not a guarantee. The past is a prologue: in 2008 the German government saved the banks with little control. 2008 banks could be airlines in 2020. According to Bloomberg News, the largest US airlines have spent 96 percent of free cash flow on buying back their own shares in the past decade. American Airlines led the package and bought back more than $ 12.5 billion of its shares. That $ 12.5 billion could have paid the annual salaries of 400,000 people who handle luggage, push wheelchairs, and keep airports clean.
While there are some conditions for industrial bailouts, history will repeat itself without a more robust competition policy, financial regulation, and corporate governance reshaping in the United States.
The progressive impact of this crisis is that the economy is heavily influenced by government measures. Markets alone cannot solve all economic problems, especially if people can’t even physically access them. The difference between the convenient Keynesian conservative approach to stimulation and an advanced vision is that the government’s role does not end when the stock market dictates.
The economic response to this crisis must primarily meet the immediate, urgent needs of people and small businesses whose lives have changed forever. But it must also recognize the unstable system and the rules and power imbalances that have exacerbated this crisis. Responding to this crisis provides an opportunity to rewrite the rules of the economy and steer power in the right direction to put working families, small businesses, and our economy on a solid foundation so that we don’t just imagine the fairest , but they can also create a just and secure economic system that works for everyone.