The coronavirus has all but ground the US economy to a halt. The list of states and cities that have closed nonessential businesses and urged citizens to stay home is growing by the day. Essential workers remain in place, and some people are able to work from home, but millions of jobs — at bars, hotels, restaurants, gyms, theaters, salons, shops — are simply evaporating.
Late last week, Goldman Sachs predicted that jobless claims in the US will spike to 2 million in the second quarter, which it calls “the largest increase in initial jobless claims and the highest level on record.” The Economic Policy Institute projects that 14 million jobs will be lost by the summer.
All those people with shaky or vanished jobs still have families to feed, mortgages coming due, utility bills, student debt payments, credit card payments, car payments, prescription and medical bills, and children or older relatives to care for. Already, millions of people are uncertain where they will live or how they will pay bills in the months ahead.
The result is a huge, rapid, ongoing loss of purchasing power in the US economy. The same Goldman Sachs report projected a 6 percent drop in US GDP in Q1 and a 24 percent drop in Q2, which is utterly unprecedented in a major modern economy outside of wartime.
The US appears to be heading into the mother of all demand recessions. On top of that, widespread social distancing has just begun. Some estimates say at best it could last three months; at worst — if distancing proves difficult to maintain, if the Trump administration botches the ramp-up of testing and tracing, if a vaccine takes longer than expected — it could last, on and off, for well over a year, stifling any recovery.
Even Republicans seem to have been terrified into action. Two short-term relief packages, with measures like limited paid sick leave and family leave for some classes of workers, have been passed through Congress. Another, reported to total $2 trillion, has just reached tentative bipartisan agreement. But no one believes that will be the end of the help the economy needs. Democrats are predicting at least two more stimulus bills; there will be much more to do.
For the past few days, I’ve been talking to economists and wonks, reading various proposals, trying to wrap my head around what a good economic response to the virus would look like. But there’s a slightly surreal atmosphere to the discussion, because the crucial period for stimulus will be the next six months or so, and for the next six months, the country will be run by Donald Trump and his administration.
Trump does not think in terms of structural reforms. His instincts are to reward friends and punish enemies; he has signaled a desire to bail out airlines, casinos, hotels, and the oil and gas industry, for starters. And in this, as in all things, congressional Republicans back him completely. Democrats in Congress rejected the first version of the Senate’s phase three stimulus bill because it would have heaped half a trillion dollars on businesses with virtually no strings attached and no commensurate effort to help workers.
With Democrats in control of the House and Republicans in control of the Senate, both parties have veto power. It will ultimately be a game of chicken, who blinks before allowing the economy to suffer more. Whatever emerges from that process is unlikely to look like any progressive wonk’s dream.
Nevertheless, it is at least worth discussing what a proper economic response would include. We’ll start with a few principles — broad guidelines that should govern the overall effort — and then look at what constitutes effective short-term recovery and long-term stimulus.
Big, lasting, and better: Principles for a good economic response
Given the dire social and economic circumstances, there are three principles that should be in legislators’ minds as they address the impacts of the virus on the economy.
1. Make it big.
Looking back, most economists agree that the 2009 stimulus was too small. Obama’s staff designed it before they knew how bad the recession was going to be, and by 2010, the Tea Party revolution had put Republicans in control of Congress, where they promptly stonewalled all further stimulus. The consequence was a painfully slow recovery that left structural problems like wage stagnation and economic inequality largely unaffected, serving as a drag on all Obama’s other efforts.
One lesson of the 2009 stimulus, worth repeating again and again, is that the risks for policymakers facing recessions are highly asymmetric.
The risk of overspending is that it could theoretically generate high interest rates or inflation — but both interest rates and inflation have been persistently low for years, a “new normal” that shows no signs of changing.
On the other hand, “the risks of doing too little fiscal stimulus are huge,” writes Josh Bivens of the Economic Policy Institute, “potentially years of elevated joblessness and economic suffering.”
Today’s lawmakers should learn that lesson. Economist J.W. Mason has run the numbers and estimates that the economic shortfall in the US over the next couple of years could be as much as $3 trillion. That is the immediate gap that must be filled by federal spending and the right ballpark for an initial stimulus. And it may need to be repeated over the coming years.
There is almost no chance of overheating the economy; the pressing danger is an economy with a persistent demand shortfall.
With interest rates now hovering near zero and financial markets willing to pay the feds to use their money, there has never been a better time for the US government to spend big. (See this Data for Progress op-ed on Democrats’ need to get over their pay-for-it obsession.)
2. Make it enduring.
One of the Obama team’s great mistakes was in thinking they would have more than one shot at stimulus — that if the first round didn’t work, Congress would recognize it and authorize more. They didn’t anticipate that Republicans would be craven enough to let the recession drag on in order to hurt Obama politically.
It’s now conventional wisdom that a given Congress only has so much energy, that the passage of any bill makes the passage of additional bills less likely. It is impossible to say whether there will be another round of stimulus after this phase three, even if more is obviously needed. Thus, legislators should be, to the extent possible, designing policy that will run on its own — and that doesn’t need regular congressional reauthorization.
Broadly, there are two ways to do that.
The first is to implement a permanent stimulus. Paul Krugman recently argued (before the present crisis) for a program whereby the US government would spend an amount roughly equivalent to 2 percent of US GDP on public goods like education and infrastructure every year — and not pay for it. The additional growth would pay for itself, and in years when it didn’t, a little deficit spending is fine (he argues) as long as inflation remains low.
“There’s a very good case for putting a sustained, productive program of stimulus in place as soon as possible,” he writes, “instead of scrambling to come up with short-term measures every time bad things happen.”
Along the same lines, there’s an ambitious new green stimulus proposal making the rounds, gathering signatures, that suggests a permanent green stimulus, to be spent primarily on the clean energy transition and environmental justice programs. It would begin at $2 trillion and then be automatically renewed each year at a level of 4 percent of GDP (about $850 billion) “until the economy is fully decarbonized and the unemployment rate is below 3.5%.”
The second way to make programs enduring is to include various switches and triggers, such that their spending levels are automatically adjusted over time.
One example is a program proposed by Claudia Sahm, previously an economist at the Federal Reserve, now director of macroeconomic policy at the Washington Center for Equitable Growth. The “Sahm rule” would create a system of direct payments to individuals that would be triggered by rising unemployment. “Evidence from recent stimulus programs indicates that large, automatic, and salient payments have the strongest stimulus benefits,” notes the Roosevelt Institute.
Similarly, other direct payments or subsidies could be set to decline in increments as GDP reaches various thresholds. Loans and loan guarantees to various industries could be tied to the unemployment rate. Grants to states and cities could be tied to markers of regional recovery. Assistance to local public transit systems could be tied to ridership numbers.
Passing anything is difficult for Congress; passing a stimulus bill is extremely difficult. If every program has to be reauthorized annually, most will end up getting cut. Insofar as possible, stimulus should be designed to continue on its own until the targeted problem is solved.
3. Make the economy better.
There’s no excuse for delaying direct aid to people who are hurting, but the fact is, the economy is currently on pause, in a kind of chrysalis. Before they try to bust it out of that cocoon, lawmakers should think about what kind of economy they want to see emerge.
“Coronavirus has basically turned off the global economy,” Jamie Henn, a climate activist and co-founder of 350.org, told me. “Let’s install a new operating system before we turn it back on.”
The economic pause has served to highlight some of the dangers the economy was perpetuating. As it drags on, air pollution falls. There’s evidence the economic shutdown in China reduced particulate pollution enough to substantially reduce mortality. And the shutdown in the US has already sent traffic and pollution plummeting in cities across the country, reducing deaths from traffic accidents and respiratory illnesses.
As the government considers stimulus going forward from this pause, it should see an opportunity to stimulate the growth of a cleaner, greener, more just economy. Workers should return to find jobs opened up in cleaner industries, with paid medical and family leave, better union protections, and a seat on corporate boards. (Yes, as I said, I am aware Republicans do not think this way.)
With those principles in mind, let’s look at some of the specifics of what might constitute a good, green stimulus bill (or series of stimulus bills).
Short term: Big and steady, focus on recovery
The Roosevelt Institute, a progressive think tank, has a plan for stimulus that leans hard on short-term measures (four of their five recommendations). Let’s walk through them.
1. Get immediate help to people hurting.
Mainly, this should take the form of direct cash payments, which are easier and more effective than other financial instruments. In a March 5 op-ed, Obama economic adviser Jason Furman proposed $1,000 for every adult and $500 for every child, but in a more recent interview with Vox’s Ezra Klein, he said, “now I’d double or triple that.” Sure enough, the Roosevelt Institute proposes $2,000 for each adult and $500 for each child. (Senate Republicans are pushing, unbelievably, to give poorer people less cash assistance.)
2. Protect workers.
Mandate permanent paid medical and family leave (including for workers in the gig economy), extended and increased unemployment benefits, and protections from reprisal for individuals or unions blowing the whistle on companies that aren’t complying. Prohibit foreclosures and evictions and temporarily cover car and credit card loans. (These latter two measures are under discussion in current negotiations.)
3. Help states.
States are in an intense budget crunch, with tax revenue declining just as state responsibilities for emergency health care and social services are rising. Unlike the federal government, which can print money, states must balance their budgets. Very few of them have rainy-day funds large enough to cover the massive hole about to be blown in those budgets.
The federal government should take over all Medicaid payments, encourage states that haven’t expanded Medicaid to do so, purchase state debt through the Fed, and offer block grants to states for things like energy efficiency that can both save people money and employ a lot of people quickly. (Cities also need direct aid — the US Conference of Mayors has requested $250 billion for various local emergency priorities.)
Fed spending should also help prepare states for the inevitable next crisis. “It’s critical that the federal government also bolster technical assistance and training to state and local governments to improve disaster and emergency response across the board,” said Jeff Mauk, head of the National Caucus of Environmental Legislators, “to ensure all states are prepared for future climate disasters.”
4. Help small and medium businesses.
Tens of thousands of businesses are shuttering across the country, and many thousands more only have the resources to survive for a matter of weeks or months. If they all close for good, recovery will take much longer, as new businesses are formed and new workers hired. Corporate consolidation will get much worse. And in the end, much more will be required of the federal government.
“If firms are allowed to fail en masse — and their workers left to scatter in the wind,” writes Eric Levitz, “more-expensive and longer-term government income support will be required than if Uncle Sam spends what it takes to keep existing enterprises in the black.”
Democratic Sens. Chris Murphy, Jeff Merkley, and Chris Van Hollen have put forward a plan that would funnel $600 billion in grants (not loans) to small businesses, to cover payroll, rent, and health insurance, administered by the Treasury Department. Republicans led by Sen. Marco Rubio have put forward a smaller ($350 billion) plan, with more restrictions, to be run by the Small Business Administration. (That appears to be the one in the final bill.)
Much more will be needed, including ongoing low-cost loans, federal funding of local nonprofit business incubators, and perhaps even the feds becoming a “buyer of last resort” to put a floor beneath cratering demand.
As I said above, to the extent possible, these measures should be explicitly open-ended, set to automatically continue until economic indicators recover.
The public is fully in support of big short-term recovery measures, across parties and geographic regions.
So that’s the short-term recovery piece. Now let’s lift our eyes to the horizon.
Long term: Green and just, focus on renewal
Reed Hundt chaired the economic review for the Obama transition team and had a ringside seat as the 2009 stimulus was developed and passed. He wrote a book about it called A Crisis Wasted, arguing that the American Recovery and Reinvestment Act (ARRA) skimped on long-term investments in economic renewal. “We need short-term measures to cope and long-term investments for rehabilitation,” he wrote in a recent op-ed. The lack of the latter, he argues, is what made the last recovery so slow.
“I can’t be the only one to see — in economic terms, if not in health terms — history repeating itself,” he told me. The focus is again on short-term measures, with too little orienting against a long-term vision for a better economy.
“In the midst of a devastating public health crisis and the ongoing climate catastrophe, there’s no way to go back to ‘normal’,” says Thea Riofrancos, a political scientist at Providence College and a backer of the aforementioned green stimulus proposal. “Instead, we need public policy that centers workers and communities, protects the vulnerable, slashes emissions, and creates a more caring, equal society for all.”
The crisis has only just begun; between them, social distancing and the virus are likely to push the US economy deeper in a hole for months to come, maybe years. Once the country makes it through the crunch, people are able to leave their homes and go to work, and the economy begins growing again, substantial government assistance will still be needed for a long while. It is worth thinking about what kind of long-term trajectory that assistance should encourage.
There are plenty of areas where the US badly needs investment — including, obviously, health care capacity and preparedness — but in this section, I want to focus on the green stuff.
The key context is provided in this piece by Carbon Tracker’s Kingsmill Bond. Historically, disruptive new technologies tend to cap and begin reducing the market for incumbent technologies long before they reach anything like market parity. (“Horse demand famously peaked when cars were just 3 percent of their number,” he writes, “and gas lighting demand peaked when electric lighting was just 2 percent of supply.”)
As he notes, fossil fuel industry growth has been slowing (to about 1 percent last year) as the world begins the shift to cleaner energy. Together, renewables and nuclear power now make up 12.8 percent of total global energy supply. Analysts agree that a structural shift is underway and that fossil fuels are going to peak and begin a permanent structural decline relatively soon.
What’s happening now is that the cyclical is colliding with the structural, which is to say, the cyclical downturn caused by the novel coronavirus seems to have moved forward the structural peak in fossil fuels. If they are smart [narrator: they were not], policymakers will treat this an opportunity to make sure the peak sticks, avoiding what is typical after downturns, a snapback that ends up increasing total emissions.
Policymakers did not see that coming in 2009, or if they did, they did little to prevent it. “After the global financial crisis of 2008, global CO2 emissions from fossil fuel combustion and cement production grew 5.9% in 2010, more than offsetting the 1.4% decrease in 2009,” writes the World Resources Institute’s Helen Mountford.
“In responding to this crisis, we must be careful not to exacerbate the ongoing climate crisis,” wrote a group of Democrats in a recent letter to congressional leadership. “We must strongly oppose misguided or surreptitious attempts to boost polluters at the expense of the public health.”
To avoid a post-recession surge of pollution, investments should be geared toward bolstering, and attracting private investment to, cleaner alternatives like renewable energy and electric vehicles. That is the approach Americans overwhelmingly support.
5 top priorities for policymakers thinking forward
Long-term economic development is obviously a capacious subject, but from the perspective of lawmakers bracing for crisis in 2020, thinking about the post-crisis economy of 2030 or 2050, here are a few guidelines worth following.
1. Attach strings to bailouts.
The hotel industry has asked Trump for $150 billion in bailout money. And it is not alone — there is a long line of needy industries forming, from cruise ships to retailers, casinos, and shale gas companies. Thus far, Trump and Republicans have pushed for a free-for-all of corporate giveaways based on cozy relationships with the White House or Congress, with no strings attached. That is ill-advised.
Decisions should be based on objective metrics of need and focused on the welfare of people, workers, not stocks. And substantial federal assistance for any industry or institution should come, as Bill McKibben argues in the New Yorker, with conditions — another key lesson of the 2009 stimulus.
For business bailouts, any grants or loans should be contingent on companies keeping employees on their payroll (as in Norway), offering paid sick leave, and eschewing stock buybacks and dividend payouts. The Roosevelt Institute notes that recipients could also be required to “adopt codetermination structures in which workers are represented on the board of the company; raise wages to a certain level ($15 as a floor is a necessary start); enact responsible scheduling policies; and remain neutral toward unionization efforts.”
For businesses in carbon-intensive sectors, government assistance should be contingent on measures to reduce greenhouse gases. For instance, in a letter to Congress, a coalition of environmental and workers’ rights groups asks that any airline bailout (the industry has asked for $50 billion) be tied to an industry commitment to reduce emissions by 2.5 percent a year, a demand that Democrats have included in their counterproposal.
Similarly, any help for the oil and gas industry should be contingent on verifiable reductions in emissions and/or investments in carbon-free alternatives. (Ironically, large oil and gas producers have lobbied against policy assistance, because they know a recession will wipe out smaller independent producers that they can then buy up. Sen. Jeff Merkley (D-OR) has introduced legislation that would prevent Trump from bailing out oil and gas. It’s probably the first time Merkley and fossil fuel giants have been on the same page.)
And some industry requests should simply be rejected. The American Petroleum Institute is taking advantage of the crisis to ask Trump to roll back environmental standards. There’s no reason to do that. The coal industry has produced a brazen wish list of its own, including reduced payments to miners with black lung and reduced royalty payments. It should receive exactly none of those things.
As journalist Mike Grunwald, who wrote the book on Obama’s stimulus, explains in Politico, any major post-recession stimulus involves triage, decisions about which companies and industries live and which die. There is no sense wasting money trying to revive an industry like coal that is already on its deathbed.
There is also talk of financial industry bailouts. The big banks have already received a $32 billion windfall from Trump’s tax cuts, and now his administration is likely to use the virus as an excuse to further loosen rules. That would be a bad idea. Instead, the goal should be to prepare for the next financial crisis, which is likely to be carbon-related.
“The Covid-19 moment is a potential preview of what a climate-driven financial crisis could look like, because it’s being driven by an exogenous shock that could destabilize the financial system,” says Graham Steele of the Stanford Graduate School of Business. “There is a systemic-risk case for acting preemptively in the case of climate, rather than waiting for another crisis to materialize.”
Making the financial system more climate-resilient would involve some “macroprudential regulation,” i.e., rules designed to protect the stability of the system as a whole (in this case, from the threat of climate disruption). Steele suggests three rules in particular: “increased capital requirements on carbon investments to better price their risks; emissions limits on financial institutions’ lending, investment, and trading portfolios; and investment obligations to make vulnerable communities climate-resilient.” (For much more on this sort of policy, see this post by me and this one by Steele.)
These kinds of policies “would essentially remove the hidden subsidy financial regulators are currently providing for risky gray financing activities” in carbon-intensive projects, says Gregg Gelzinis of the Center for American Progress, “making green investments more financially attractive in relation.”
Any bailout of financial institutions should be conditioned on the implementation of reforms like these. It’s one of the top demands of the climate advocacy community right now. “If Wall Street takes our public dollars and funnels them into coal, oil, and gas,” says Henn, “they’re just setting up the next great global catastrophe.”
2. Invest in clean energy.
“It is very rare to be able to hit two birds with one stone,” says Michael Greenstone, head of the Energy Policy Institute at the University of Chicago, “yet clean energy stimulus spending can both help fill the serious demand shortfall and contribute to our massive underinvestment in research, development, and deployment.”
During the Obama administration, lots of work was done investigating stimulus focused on investments in clean energy, finding over and over again that it would boost the economy and reduce unemployment. Indeed, Obama’s stimulus bill was in part a $90 billion investment in clean energy, and, as Grunwald chronicles in his book The New New Deal, it was a spectacular success, sparking a decline in solar and wind prices that has since transformed the energy landscape.
The priority for lawmakers today should be to stabilize support for renewable energy, which is reeling from the crisis. Before the virus, wind and solar represented the fastest-growing source of jobs in the US. Now the wind industry reports that 35,000 of its 114,000 jobs in the US — almost a third — could be lost, which could “jeopardize $43 billion in investments and payments to rural communities.” The solar industry reports that it could lose up to half its jobs in sectors like residential solar. The energy storage industry reports that the impact of the virus “has been immediate and potentially devastating to our industry.”
Congress could begin by granting the industry’s top request, which is “an extension of start construction and safe harbor deadlines to ensure that renewable projects can qualify for renewable tax credits despite delays associated with supply chain disruptions.” And it asks that, at least in the short term, those credits be converted into cash grants, due to the shortage in tax equity driven by the recession.
The tax credits — for renewables, electric vehicles, carbon capture and use (CCU), electric heat pumps, and more — should also be extended (and expanded to cover energy storage). One way to extend all clean energy tax credits at a stroke would be to pass the Growing Renewable Energy and Efficiency Now (GREEN) Act. And if it wanted to get more ambitious, Congress could consider converting the credits to cash grants on a permanent basis.
There is still $40 billion in the Energy Department’s clean energy and advanced vehicle loan programs, which the administration has been sitting on, having made all of one loan in three years. Despite the hype about Solyndra, those programs have a solid record of success and should be revived.
Another obvious measure is the creation of a federal green bank to extend stable, low-cost loans that help finance low-carbon investments. Washington Gov. Jay Inslee suggested initially capitalizing such a bank at $90 billion, which sounds about right.
Fatih Birol, head of the International Energy Agency, recently wrote an op-ed pleading with all countries to put clean energy at the center of their post-coronavirus stimulus. The US could lead the way; the public is already on board.
3. Invest in infrastructure.
The US is notoriously behind on infrastructure spending, and everyone agrees it should play a big role in long-term stimulus.
Instead of plowing more money into highways, as it typically does, this time the US could fund clean infrastructure: long-distance power transmission lines, carbon capture facilities, universal broadband internet, and buildings, buildings, buildings. (Billionaire Mike Bloomberg has been advocating for this approach.)
One place to start would be the Transportation Department’s Better Utilizing Investments to Leverage Development (BUILD) program, which is behind on a backlog of projects meant to reduce emissions or increase climate resilience.
Other obvious targets include electric vehicle charging infrastructure, to prepare for and hasten the transition to electric vehicles, and energy storage infrastructure, to help integrate renewable energy into the power grid. Stanford’s Dan Reicher also suggests increased hydropower.
When it comes to buildings, the opportunities are endless. Greens have been advocating for years for a nationwide building retrofit program focused on energy efficiency and resilience, which could employ thousands of people in every area of the country. The federal government could start by extending subsidies or interest-free loans to home and building owners who undertake electrification and efficiency projects. “Successful retrofit programs, such as Mass Save in Massachusetts, have demonstrated that these undertakings can be an engine for economic growth and job creation while saving consumers and businesses big time on energy bills,” says Mark Paul, an economist at the College of Florida.
Constantine Samaras, an engineering professor at Carnegie Mellon, suggests starting with schools. “A large stimulus program could renovate every school in America — removing lead and asbestos, replacing windows, changing out heating and air conditioning systems, and making these essential buildings healthy and safe,” he says. “Every community would see a benefit, building support for continued stimulus.”
One last note on infrastructure: As WRI’s Dan Lashof suggests, all this new infrastructure should be built with new low-carbon forms of steel and concrete (and mass timber!), both to hold emissions down and to accelerate innovation in those crucial fields.
4. Save public transit (and other public agencies).
Across the country, public transit systems are getting crushed by social distancing. CityLab’s Laura Bliss reports:
Ridership across New York City’s MTA, the nation’s largest public transit system, fell by 60% on subways and as much as 90% on commuter trains. Washington, D.C.’s WMATA lost 100,000 riders in the course of a week. In San Francisco, rail ridership on BART was down a staggering 90% as of Tuesday, and the SFMTA’s buses and railcars had plummeted 35% by the end of last week. Intercity rail travel has also taken a huge hit: Bookings on Amtrak have plunged 50% since the outbreak. Public ferry boats have emptied out, from Seattle to Staten Island.
In the US, public transit is a scarce public good in an age when (as nature seems determined to teach us) we need more public goods, not fewer. “Transit is essential to combating climate change and transitioning to net-zero” emissions, Scott Goldstein, policy director at the advocacy group Transportation for America, told Bloomberg. “And if we do not support them today in crisis, they will not be there for us in the future.”
As Vox’s Matt Yglesias argues, Congress should act to ensure that transit systems emerge from this economic paralysis stronger than they entered. MTA has requested a $4 billion bailout, and in a letter to Congress, Goldstein’s group has requested almost $13 billion for the nation’s rail and bus systems. (Calstart, a nonprofit transit advocacy group, has its own set of transit stimulus requests.) In stimulus terms, it is a no-brainer.
In a post at Vice, Aaron Gordon explains the real funding difficulty facing transit systems today. It is not primarily capital costs, i.e., the costs of buying new trains or buses or building new routes. Rather, it is operating costs — fuel, labor, and electricity — that are rising even as traditional sources of funding (mainly fares) dry up in the face of the virus.
These are the systems we can expect to see entering financial crisis very soon, if not already, because of their high reliance on fares:— Yonah Freemark (@yfreemark) March 16, 2020
- SF BART
- NY MTA
- Chicago CTA
- Sound Transit
- LA Metrolink
- SD MTS
The 2009 stimulus ended up channeling several billion dollars to transit, but it was almost all in the form of capital subsidies, which led to many transit systems having an oversupply of hardware and undersupply of labor and money to run it. Gordon reports:
At that point, transit agencies pulled the only lever they had left to pull. They cut service. Some cities, like Cleveland and Milwaukee, have still not returned to the level of service they were providing before the recession. “Construction workers were getting hired,” [the nonprofit TransitCenter’s Ben] Fried summarized, “while bus drivers were getting fired.”
This time, the federal government shouldn’t make the same mistake. It should offer block grants to local and interstate transit systems based on population and capacity and allow transit agencies to decide how the money is spent.
Another note on transit: One easy way to secure a stimulus win-win-win is to electrify the nation’s commuter and school buses, which now primarily run on diesel, adding to noise and air pollution in urban areas. Here, the upfront capital costs of electric buses are the barrier; once they are overcome, operating costs are much cheaper. The drop in pollution also tends to benefit low-income communities, which are more likely to be located along transit routes and more likely to use transit.
“The city of Shenzhen in China electrified all of its 16,000 buses in eight years,” says Samaras. “New York City has 5,000 buses. Let’s start electrifying those and all the other buses right now.”
For some more big thinking on transit, see “A Green New Deal for City and Suburban Transportation,” recently released by Data for Progress, the McHarg Center at the University of Pennsylvania, TransitCenter, and Transportation for America. It’s a plan that aims for, among other things, “putting the majority of Americans within walking distance of frequent, high-quality public transit by 2030.” (Incidentally, polling shows that large majorities of Americans support strengthening public transit.)
And there are other public agencies that need help. “Our local transit agencies, housing authorities, rural electric and agriculture co-ops, and other municipal services employ millions of people and, best of all, are already publicly owned,” says Billy Fleming of the McHarg Center. “Any package that does not allow those workers to keep their paychecks and benefits — and all of us to retain access to the vital services that make life possible in our communities — should be a nonstarter for members of Congress.”
5. Try more social democracy.
As long as I’m listing ideas this Congress is unlikely to adopt, I might as well finish with a few even more ambitious ideas for stabilizing against cyclical (or virus-driven) recessions. Needless to say, these would also make certain vested interests very angry.
One is a universal basic income (UBI), whereby the government would mail regular checks to every citizen — like the cash payments Congress is about to hand out, only ongoing. Iconoclastic former presidential candidate Andrew Yang helped push this idea into the mainstream discussion, making the extremely relevant point that it would prevent millions of people from suddenly losing all their income in an economic downturn. (For more on a UBI, see journalist Annie Lowrey’s recent book Give People Money, and for more on the ins and outs of giving people money, follow Vox’s Dylan Matthews.)
Two other ideas are endorsed by the leading thinker and writer in green socialism these days, Kate Aronoff. She advocates for nationalizing the oil and gas sector so that it can be steadily and predictably wound down, ensuring that affected workers and communities are protected.
And she advocates for a federal job guarantee. “The US government would permanently become the country’s employer of last resort,” she writes, “through a program that’s always in place but kicks into high gear during an economic downturn and then shrinks when people find work elsewhere in the public or private sector.” The government could employ people on a range of environmental construction and remediation projects.
Having a guaranteed job, like having a guaranteed income, would cushion every American against sudden and unpredictable crises, which are only likely to grow more common throughout the 21st century.
An opportunity for economic transformation and renewal, likely wasted
Congress has reportedly reached a deal on a phase three stimulus, which would offer a range of short-term payments and loans. It is likely to be far short of what is needed, especially as the crisis worsens. (And despite Trump’s delusional gestures to the contrary, the crisis will worsen.)
The political dynamic that has taken shape is, to say the very least, odd.
It is well known in political science that voters tend to blame the president’s party for whatever happens during an administration, whether or not the president has any power over it. They especially hold the governing party responsible for the economy, and especially in the runup to an election.
That’s why Republicans blocked Obama’s ongoing efforts at stimulus; they knew he, not they, would suffer voters’ wrath over the results. But this time, they are in charge. If Trump and the Republicans pass inadequate stimulus, it is Trump and the Republicans who will reap the electoral backlash when the economy continues to suffer.
In other words, it is in the GOP’s best interests to pass the biggest stimulus possible. Their electoral fortunes depend it. Voters don’t care about deficits as anything other than culture-war totems; they care how they and their communities are faring. Any realistic consultant would be telling Republicans to dump as much money on voters as possible.
Yet it is Democrats who are fighting for more and better stimulus, because unlike Republicans in 2009, they are not craven enough to allow a deepening recession in order to hurt their political opponent. In fact, the best plan for responding to the crisis is the one put forward by the furthest-left candidate, Bernie Sanders. (It contains much of what I covered above, and more.)
Meanwhile, Republicans are fighting for less effective stimulus, because they seem unable, at this stage in their accelerating devolution, to identify their own best interests or adapt to circumstances, even when it is their own goose about to be cooked.
Regardless, even if they were capable and willing, Republicans cannot make any long-term plans or short-term tactical sacrifices because they are inextricably tied to the mercurial and mercenary rule of Donald Trump, whose only guiding principle is vanity, whose only tricks are goosing the stock market and stoking his nativist base, and whose only plans are shaped by whatever he sees on Fox on a given morning. It is not a recipe for steady leadership in a crisis.
The principles and suggestions laid out above are unlikely to become policy as long as Republicans control the presidency and the Senate. But six months from now, different people could be in charge, facing an economy that is still in crisis and a planet that is still warming. They will need ideas that address both crises at once — all the ideas they can get.