The Greatest Risk

People Need Stimulus

COVID-19 cases are rising. Job growth is slowing. As CDC Director Robert Redfield describes it, this winter could be “the most difficult time in the public health history of this nation.”

Yet nearly nine months after the CARES Act’s passage, Americans continue to wait for new stimulus and fear the end-of-year expiration of vital benefits—from unemployment assistance to eviction bans. 

People need stimulus now. And the greatest risk—as a groundswell of economists argue—is doing too little and causing harm that lasts well beyond this crisis. 

“The risk of overdoing it is less than the risk of underdoing it,” Federal Reserve Chair Jerome Powell told Congress this week. “People are always worried about doing too much, and you look back in hindsight and say, ‘Well, we didn’t do too much. We might’ve done a little more and a little sooner.’”

In a Project Syndicate op-ed, Roosevelt Chief Economist Joseph Stiglitz explains why debt shouldn’t be a concern: “The US desperately needs large rescue programs . . .”

“The resulting debt from increased spending should not be viewed as a hindrance, given the enormous cost of doing too little. Besides, with interest rates near zero and likely to stay there for years to come, the costs of servicing new debt are exceedingly low.”

If this Congress (or the next) fails to act, President-elect Joe Biden still has a powerful option to provide relief and reduce racial inequities. “Executive action on student debt cancellation feels like one of the most accessible executive actions to stimulate the economy at the moment,” Roosevelt’s Suzanne Kahn tells Time magazine.

Employer Power and Employee Skills

With millions at risk of long-term unemployment, some policymakers and practitioners have prioritized workforce training to address what they describe as a “skills gap.” But as Roosevelt Fellow Suresh Naidu and labor economist Aaron Sojourner explore in a new report, that premise is flawed.

“Employers’ complaints about ‘skills gaps’ may be better explained by their power in the labor market (‘monopsony’) and resulting unwillingness to raise wages to increase supply. Just as monopolists look for more customers while reducing quantity and raising prices, monopsonists look for more and better workers while paying low wages and refusing to raise them.”

Next Thursday, December 10, join the authors for a webinar discussion about their research and findings. 

• Featured panelists: Amanda Cage (President & CEO, National Fund for Workforce Solutions; Member, WorkRise Leadership Board), Lenore Friedlaender (Assistant to the President, 32BJ SEIU), and Howard Rothschild (President, Realty Advisory Board on Labor Relations)
• Moderator: Elisabeth Jacobs (Acting Executive Director, WorkRise; Senior Fellow, Center on Labor, Human Services, and Population, Urban Institute)

Public Investment Reimagined

In a roundtable published by The American Prospect this week, Roosevelt experts reacted to Saule Omarova and Robert Hockett’s proposal for a National Investment Authority, which “would be charged with the critical task of devising and implementing an ongoing and comprehensive long-term development strategy for the United States.” Read more:

• How a New RFC Connects to a Green New Deal by Ilmi Granoff, Douglass D. Sims, and Roosevelt Director of Governance Studies Todd N. Tucker
• Nicky Mac: A ‘Public Option’ for Workers’ Capital by Roosevelt Fellow Lenore Palladino
• The New Economy Will Be Built by Movements by Isabel Estevez, Ben Beachy, and Roosevelt Director of Climate Policy Rhiana Gunn-Wright
• Why Muddle the Public Side of the Green New Deal? – Roosevelt Fellow Mark Paul

Catch Up

If you missed this week’s Roosevelt webinar, watch the full recording now:

Meeting the Moment: Bold Ideas to Transform the Economy

• Featured panelists: Roosevelt President & CEO Felicia Wong, Gunn-Wright, and Roosevelt Managing Director of Corporate Power Bharat Ramamurti
• Moderator: CNN legal analyst and Made to Fail host Elliot Williams

What We’re Reading

The Death of the Department Store and the American Middle Class – Vox

How Climate Change Could Spark the Next Home Mortgage Disaster [feat. GDI’s Lindsay Owens] – Politico

Up to 30 Million in US Have the Skills to Earn 70% More, Researchers Say – New York Times