What the Coronavirus Is Teaching Us

March 19, 2020

By Matt Hughes

Government can do things markets can’t or won’t.

The Roosevelt Rundown is an email series featuring the Roosevelt Institute’s top stories of the week.

The Lessons of COVID-19

Uniquely ill-equipped for the coronavirus pandemic after steep funding cuts, the US is learning anew why public investment and worker protections matter. “In the absence of paid sick leave, many infected workers already struggling to make ends meet will show up to work anyway. And in the absence of adequate health insurance, they will be reluctant to seek tests and treatment, lest they be hit with massive medical bills,” Roosevelt Chief Economist Joseph Stiglitz writes for Project Syndicate. As Omidyar Network Principal Joelle Gamble explains in The Nation, payroll tax cuts and other quick-“fix” efforts are inadequate for the task at hand. “If we treat the economic symptoms only through short-term stimulus without fixing the structural diseases in our economy, we’ll be just as susceptible in the future as we are today.”

EconCon 2020 is postponed: “The COVID-19 crisis is a health crisis that must be responded to and managed as effectively as possible by governments, organizations, and each of us as individuals—and we’re postponing this conference to do our part in that. But it is also exposing many of the deep flaws in our economy that we had been planning to work together to tackle at EconCon 2020.” Read more from EconCon’s organizers.
On the Hill: Congress is set to vote today on legislation that includes free virus testing, 14 days of paid sick leave, and federal funds for Medicaid, as reported in the New York Times. For reference, “one in four workers has no access [to paid sick leave], according to Labor Department data. That includes 6 percent of the highest earners and two-thirds of the lowest earners. Forty percent of workers in service jobs, like those in restaurants, shops or child care centers, have no paid sick time.” Read more from the NYT’s Claire Cain Miller.

The Greatest Mobilization Since WWII

Just as the coronavirus requires measured coordination at the national and international levels, so too does the climate crisis. As history shows, we have experience acting en masse against existential challenges: “[T]he New Deal and World War II mobilizations offer literal, instructive policy precedents for the job before us,” Roosevelt Climate Policy Director Rhiana Gunn-Wright, Roosevelt Fellow Bracken Hendricks, and Center for American Progress Senior Fellow Sam Ricketts write for Democracy. Read on.

More public spending is a feature, not a bug: As Roosevelt Fellow J.W. Mason writes for the same issue, a Green New Deal is essential to tackle the climate crisis. “But just as important from an economic perspective, it will pump needed dollars into our stagnant economy, boosting demand and raising wages. Just as World War II mobilization pulled the United States and other advanced countries out of the Depression, rapid decarbonization could pull us out of today’s secular stagnation.” Read more.

Wells Fargo and the Perils of Shareholder Primacy

Before the House Financial Services Committee, Wells Fargo CEO Charles Scharf and (former) board members testified about lax corporate governance and consumer abuses; for the blog, Roosevelt Director of Advocacy and Policy Katy Milani analyzes Wells Fargo’s recent 10-K filings and finds that the bank’s stock buyback and dividend expenditures jumped from $12.5 billion in 2016 to $30.2 billion in 2019. Moreover, CEO pay at Wells Fargo rose over 40 percent from 2016 to 2018, exceeding median worker pay 300-fold. Watch Rep. Jesús “Chuy” García (D-IL) cite Milani’s research during Wednesday’s hearing.

Another angle: Though Scharf is the third Wells Fargo CEO to testify about the scandals in the last 3.5 years, the bank has largely skirted full legal culpability. “. . . the DOJ basically caught a gang of thieves and let them scoot right back to their den with most of the loot. Worse still, criminal prosecutions—for a bank that openly admits it stole money from its own customers—are off the table for now,” Maria Bustillos writes for Slate. “Shareholders, all of them shielded from direct liability, also benefited, as millions of Wells Fargo’s own customers—and employees—were persistently fleeced and abused.” Read more.

How Women’s Access to Higher Education Changed America

“Amidst the primary debate chatter, you have probably heard arguments that the student debt crisis is undermining the higher education system’s ability to fuel economic mobility. But this Women’s History Month, it’s worth noting that the debt crisis is also undermining one of the most historically unique elements of American higher education: [I]ts role as a force for gender equity,” Suzanne Kahn—deputy director of the Great Democracy Initiative and a Roosevelt Institute expert on education initiatives—writes for TIME. “Early public investments in higher education made higher education accessible to women. That investment not only helped fill an intended social need by training thousands of teachers, but also helped foster social change in unanticipated ways.” Read on.

The Pillars of New Progressivism

In a piece on Sen. Elizabeth Warren’s presidential campaign exit, the New Yorker’s John Cassidy examines the former candidate’s policies and impact using the four pillars of new progressivism coined by Roosevelt President & CEO Felicia Wong: “To return to Wong’s terminology, Warren isn’t just a new structuralist. In advocating for policies like universal child care and the establishment of a post-office bank that would offer basic banking services cheaply, she is also a public provider,” Cassidy writes. “In proposing big public investments in green energy and conservation, she is an economic transformer, too. And in making one of her top priorities a comprehensive anti-corruption plan, which she claims would ‘end lobbying as we know it,’ she is an economic democratist.” Read on.