The Economy of Tomorrow

May 8, 2020

Old ideas won’t solve this unprecedented crisis.

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

Post-Neoliberalism, Post-Pandemic

The Labor Department’s latest unemployment report confirms what over 33 million Americans have experienced firsthand in the last two months: We are in the worst economic crisis since the Great Depression. And the nation’s inadequate response to the shock of COVID-19 is no accident, as Roosevelt President & CEO Felicia Wong explains in Democracy: “Our response is rooted in a powerful set of political beliefs that have dominated American thinking over the last half century . . . The first is a fear of moral hazard—helping the poor too much. The second is an automatic preference for private-sector solutions. And the third is the idea that individual investment in human capital will lead to a more productive, better-compensated workforce.” The humane and resilient economy we need, she writes, is only possible if we discard those dogmas and recognize public, private, and social institutions—like unions—as equal decision-makers. If we’ve learned anything from the Great Recession, austerity will only hinder that process, as Roosevelt Director of Progressive Thought Mike Konczal argues on the latest episode of Pitchfork Economics.

  • Protect workers: Among the nation’s priorities should be ensuring that responses taken to date—including the CARES Act—actually help those most in need. On NPR’s All Things Considered, COVID-19 Congressional Oversight Commission member (and Roosevelt Managing Director of Corporate Power) Bharat Ramamurti explains how aid is falling short. “What we’ve seen is that more often than not, those corporate boards and CEOs [receiving federal funding] are going to . . . look out for their shareholders and their executives first and their workers last. So my concern is that taxpayers are going to be ensuring that big-time investors and executives don’t take any losses in the short term but that workers at these companies are not going to be able to stay on payroll, stay connected to their health insurance and be able to provide for their families.”
  • Guarantee jobs: “The current focus on stimulus is deeply flawed, reproducing inequality by cutting taxes for businesses and thereby conveying billions to the already wealthy,” Roosevelt Fellow Darrick Hamilton and Harvard University’s Daniel Carpenter write for Slate. “Government jobs programs, on the other hand, deliver the benefit directly to workers; are subject to less lobbying than corporate bailouts; and would extend a job guarantee, more stable finances, and meaningful work to millions of Americans.” Read on.
  • Revive the Reconstruction Finance Corporation: For the blog, Roosevelt Director of Governance Studies Todd Tucker outlines five reasons rebooting this New Deal-era institution could repair disrupted supply chains and broken markets and pave the way for a Green Reconstruction Corporation.

We Need a Green New Deal

A new paper from Roosevelt Chief Economist Joseph Stiglitz and climate economist Lord Nicholas Stern finds that a green COVID-19 stimulus could both boost economic growth and halt climate change. As Roosevelt Director of Climate Policy Rhiana Gunn-Wright tells Michelle Goldberg of the New York Times, though a Green New Deal is more necessary than ever, it’s far from inevitable: “We don’t make policy decisions based on just, ‘What is the best choice?’ It’s a political process. It’s not a science fair.” But as the coronavirus crisis has persisted, voters are increasingly more supportive of a Green New Deal, per new polling from Data for Progress.

The Case for Reparations

“The COVID-19 crisis only heightens the urgency of Black reparations. Long overdue, they are now more essential than ever,” Roosevelt Senior Fellow Sandy Darity and folklorist Kirsten Mullen write in a Newsweek op-ed. “The federal government can pay for reparations. The rapid enactment of the legislation of a $2.2 trillion economic rescue package proves Congress can find the needed money when motivated to do so. We know, now, the debt can be paid. We only need the will to do it.” Read on.

What We’re Reading

The Near-Certainty of a Black Depression – Vox

The COVID-19 Crisis Has Already Left Too Many Children Hungry in America – Brookings

The Small-Business Die-Off Is Here – The Atlantic

The False Prophets of Growth – The Week

Why the Covid-19 Economy Is Particularly Devastating to Millennials, in 14 Charts – Vox

The ‘Public’ in Public College Could Be Endangered – New York Times

The Pandemic Has Made Industrial Policy Palatable Even to Republicans – Bloomberg

America Needs a Rebirth of Public Service – The Atlantic