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There
once was a time when elections were mostly about the
economy. (Think James Carville and "It's the economy,
stupid!") Today the politicians don’t seem to care much about
the economy, despite the upcoming election.
But Congress ignores the economy at their peril,
because it has become a major preoccupation for the 12
million people who are still out of work – and their families.
That number will be growing as major segments of the economy – from
airlines to restaurants to entertainment and small businesses — all
shed jobs. And close down. Millions more face financial
uncertainty.
So
let’s set politics aside for a moment and look at the economic impact
of this latest political standoff. As I write this column, negotiations
seem to have come to a halt. Perhaps before the election, sensible
minds will have prevailed. But if not, both parties bear the blame for
this unconscionable void of concern and action when it comes to getting
the economy going.
Yes,
growth inspired by confidence requires a vaccine -– and it will
come. Until then our leaders need to provide a bridge to a better
future. That means economic plans to cover a gap of at least six months
before growth resumes at pre-pandemic levels. Agreement on helping the
economy is both a philosophical and very practical issue for our
leaders.
The
Philosophy of Stimulus
On a
philosophic level, economists debate whether government help should be
used to “bail out” shareholders of airlines, or small businesses
struggling to survive. The totally “free-market” view is that the
economy depends on “survival of the fittest.” That may be appealing in
theory – but our nation is too interdependent to simply let the weakest
sink into despair.
A
former Fed governor, Neel Kashkari, made that point clearly,
saying that. letting the economy fail is like letting a wildfire burn
until it burns itself out. It might clear the forest of deadwood, but
it will take down living trees and lots of helpless animals with
it. That kind of “benign neglect” is possible only if you are insulated
from the fires burning around you – as politicians in Washington are.
In
fact, the politicians are indeed insulated from the pain of the current
economy. They couldn’t agree on any kind of compromise for a new
stimulus bill – but two weeks ago they did manage to pass a “continuing
resolution” in a bi-partisan effort to keep the government open. That means they continue collecting
their salaries, continue receiving the best health insurance, and that
their retirement pensions will remain fully funded.
So
why can't they can’t get together – both sides – to work on behalf of
the ordinary Americans who pay their salaries – even while they don’t
do their jobs! Philosophy works well until you’re the one digging into
your retirement account or meager savings to pay the mortgage or feed
your family or heat your home.
The Economics
of Stimulus
There
are real economic objections to more stimulus for the economy.. Many
voice concern for the national debt. That concern would be more
persuasive if we hadn’t added $1 trillion a year to the national debt
in the midst of the greatest economic boom on record before the
pandemic started. Why draw the line now, when it is really necessary?
A
stimulus plan doesn’t have to bail out cities and states that have
over-promised and overspent for years, hiding shortfalls in underfunded
retirement plans and crumbling infrastructure. Similarly, we know there
is technology to sort out and direct individual payments to where they
will do the most good. If targeted ads can find you on the Internet,
targeted stimulus money can be directed appropriately to people in
need.
Time for Americans to
Speak Up
While
the politicians create the headlines, it’s all of us who bear the
ultimate responsibility. We elected them – both parties. You can find
the email of your elected representative at www.usa.gov/elected-officials. Both
parties need to hear from you now.
We vote, It's time to remind them they should pay more
attention to our opinions.
The
American economy is starting to resemble a Jenga tower, with blocks
“hollowed out” as it remains standing but teeters on the verge of
collapse. It’s time to stop playing games with our country’s economy.
And our citizens’ future. And that’s The Savage Truth.
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