Is A New Great Depression And A Political Transformation Coming?

The GOP approach to the poor and unemployed.

Many red states are rushing to "reopen" after shutdowns for the coronavirus in part to try to jump start their economies but perhaps also to avoid citizens from realizing that failed GOP policies starting at the White House and spreading downward made America so unprepared for the pandemic and left so many Americans vulnerable to a financial disaster as soon as they missed their first paycheck.  The GOP's reverse Robin Hood agenda that has sought to establish a new Gilded Age even as the social safety net was eroded could result in not only a depression but also calls for dramatic change in America's economies/social system that throws too many to the gutter while the wealthy hoard an ever growing portion of the nation's total wealth. The pandemic has also put on display the problem with America's private health insurance system that relies far too heavily on employer based insurance.  With 30 million Americans now unemployed, the ranks of the uninsured have skyrocketed with employees with no ability to extend coverage under COBRA for the simple reason that they have no income.  A column in the New York Times looks at the ongoing financial catastrophe for so many and speculates on what the political repercussions might be.  Here are excerpts:

After more than a month of coronavirus lockdowns, [Andrew] Yang’s prediction [of America's need for a universal basic income] looks quaintly optimistic. “That obviously happened not in four years, it happened in four weeks,” he told me. “And it wasn’t 30 percent, it was virtually 100 percent.”

Many of those stores will come back — some have already — but analysts predict that thousands won’t. Jobs lost to automation during this time — in warehouses and supermarkets, among other places — are especially unlikely to return. Americans, increasingly desperate in lockdown, are going to emerge from this period into a transformed and blighted world.

Yang used to believe that we were five or 10 years away from seeing some version of his signature policy enacted. “Now I believe this is very immediate and could happen this year,” he said. Representative Justin Amash, who’s exploring running for president as a libertarian, is calling for a U.B.I. for the next three months. The House speaker, Nancy Pelosi, recently said a guaranteed minimum income is “perhaps” worthy of attention. Last month Pope Francis spoke warmly of the idea.

Several candidates campaigned for the Democratic presidential nomination on what Senator Elizabeth Warren called “big structural change,” and lost. Yet in a hideous historical irony, the end of the primaries has coincided with a calamity that necessitates an enormous federal response.

Covid-19 has killed more Americans than died in the Vietnam War and led to unemployment numbers that are likely worse than those during the Great Depression. Implicit in Joe Biden’s campaign was a promise of a return to normalcy. That may have always been illusory, but now it’s been revealed as an impossibility.

As we approach this year’s election, we’re looking at an abyss. The question is what will fill it. Societal disaster can have horrific political consequences: Around the world, despots are using the pandemic as an excuse to grab ever more power. But the need to rebuild the country comes with opportunities.

At this point, even many Republicans acknowledge that the era of small government is over. (“Big-Government Conservatives Mount Takeover of G.O.P.,” said a recent Politico headline.) In such an environment, ambitious progressive ideas that once seemed implausible, at least in the short term, start to become more imaginable.

“I do think there’s an F.D.R. moment,” said Senator Edward Markey, Democrat of Massachusetts and co-author of the Green New Deal resolution, which calls for a huge new public works program to build environmentally sustainable infrastructure. “Like 1933 — which would be 2021 — we can see that it is now time to discuss universal child care, universal sick leave and a guaranteed income for everyone in our society.”

Unsurprisingly, mass unemployment — a particular catastrophe in a system in which most people’s health insurance is tied to their jobs — seems to have made Americans more supportive of New Deal-like policies. Figures from the left-leaning polling firm Data for Progress show that support for a Green New Deal has risen from 48 percent last May to 59 percent this spring. Backing for “Medicare for all” went from 47 percent in November to 53 percent in March, when coronavirus layoffs were just starting.

“People who were doing well at small businesses who have either lost their jobs or faced extraordinary hardship, and suddenly they are now having to confront the difficulties of being uninsured. They’re having to confront the challenges of the private health system.” Khanna sees a much broader awareness “of how uncertain economic life can be,” he said, which creates a bigger coalition for progressive ideas to improve the social safety net.

[Elizabeth] Warren and Khanna recently released a proposal for what they’re calling an “Essential Workers Bill of Rights,” which folds many longtime progressive labor priorities into a plan to address our current emergency. The proposal includes a mandate for free adequate personal protective equipment, hazard pay, universal paid sick leave and paid family leave, a crackdown on employers that misclassify full-time employees as independent contractors, and protections for union organizing.

That last part is important, because Warren believes we’re on the cusp of a new wave of labor mobilization. There have already been strikes, walkouts and other demonstrations across the country by workers forced to expose themselves to potential infection, including bus drivers, Amazon warehouse workers and employees at fast-food restaurants.

If so, it will echo what happened during the Great Depression. “This is what shocked everyone,” Warren said. “All of the economists thought the Great Depression in the 1930s would be the end of unions because so many people were unemployed and there was such a large labor supply, and unionization was going down during the 1920s. But that’s not what happened. In a time of great stress, more workers decided their only chance of survival was to come together and exercise their power through a union.”

Mass unemployment also makes some version of a Green New Deal seem like more of a near-term possibility, at least if Biden wins the presidency. During the primaries, Biden’s environmental proposals were generally more modest than his rivals’, but with the pandemic ravaging the economy he’s called for a trillion-dollar infrastructure program focused on green jobs.

The economy was always more fragile than the top-line numbers suggested; in some surveys a majority of Americans said they were living paycheck to paycheck before the coronavirus hit. But now the economy’s weakness is no longer a matter of debate.

Now, with so many of our assumptions about the way our country works collapsing around us, it’s progressives stepping forward with a set of answers they’ve been refining for years.

“We are going to be faced with a national rebuilding project at a scale that has never existed in our lifetimes,” said Yang. The biggest battle in politics now is over who will control that project, and whom it will prioritize.

If Republicans retain control of the U.S. Senate, it's a safe bet they will prioritize the wealthy as they have for the last quarter century.  If Democrats can win the White House and the Senate while holding the House of Representatives, then there is a chance that America;s broken economic system may see much needed improvements.