The New Great Depression Is Coming. Will There Be a New New Deal?
After the coronavirus, political transformation may be inevitable.
Until very recently, Andrew Yang thought that the need for a universal basic income would be a big issue in the 2024 election, as “many of the trends that I campaigned on were going to become completely clear to more and more Americans” over the next four years. He was arguing, for example, that between now and then, “30 percent of our stores and malls were going to close because of Amazon.”
After more than a month of coronavirus lockdowns, Yang’s prediction 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.
“I’ve had people in my district, Silicon Valley, tech professionals who’ve lost their jobs,” Representative Ro Khanna, Democrat of California, told me. “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.
After the Sept. 11 attacks, American culture lionized soldiers, firefighters and police officers. The political corollaries of this worship could be negative; it was part of an atmosphere of militarization at home and abroad, where dissent was repeatedly shut down in the name of “supporting the troops.” But looking back, you can see how quickly national priorities changed, and how the stories America told itself about its heroes shaped policy.
Now the people celebrated as heroes are “essential workers” — doctors and nurses, but also grocery store clerks, bus drivers, meatpackers and mail carriers. There’s no guarantee that America will reward their sacrifice; even Sept. 11 emergency workers had to struggle to get the health care funding they needed.
But cultural shifts pave the way for political reform. “When little children are making signs that say, ‘Thank You,’ and taping them up in the window for the mail carriers and UPS delivery folks, the world has changed,” Elizabeth Warren told me. (Disclosure: my husband consulted on Warren’s presidential campaign.)
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. Nurses have taken to the streets. “Whether it is slog-it-out bargaining over safety measures or bold legislative moves, unions see their coronavirus activism as the beginning of a new era for the labor movement,” said a Los Angeles Times article.
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. That’s a lot less than what Alexandria Ocasio-Cortez of New York, who co-sponsored the Green New Deal in the House, has demanded — but it’s more than the entire cost of the stimulus bill President Barack Obama signed at the height of the Great Recession.
“In lots of ways I do think we’re closer to a Green New Deal than we were before, because the necessity of one has become more apparent,” said Rhiana Gunn-Wright, director of climate policy at the Roosevelt Institute and one of the thinkers who first conceptualized the Green New Deal. “It’s very difficult to talk about needing an economic transformation when the official metrics are saying this is a good economy.”
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.
Obviously, that doesn’t make progressive reform of any kind inevitable. “It’s a question of what lessons are we learning from this, and I don’t think that that’s clear,” said Gunn-Wright. She added, “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.”
Gunn-Wright is interested in systems thinking; she talks about how paradigm shifts occur. At certain moments of crisis, dominant beliefs about how the world works can no longer explain what is happening. You can see this, she said, in the 1970s with stagflation, which was viewed as discrediting Keynesian economics. “That moment opened up the space for the neoliberalism that we have now,” she said.
Conservative economists in the United States had been developing the sort of ultra-free-market ideas championed by Ronald Reagan for decades. The era’s economic crisis allowed them to break through. As Wright-Gunn said, “There’s no answer for what’s happening, and here come these folks with an answer.”
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.