Night Owls, a themed open thread, appears at Daily Kos seven days a week
Jason Furman is professor of the Practice of Economic Policy at the Harvard Kennedy School and in the Department of Economics at Harvard University. He served as chair of the Council of Economic Advisers in the Obama administration. At Foreign Affairs, he writes—The Crisis Opportunity. What It Will Take to Build Back a Better Economy:
[...] The natural disaster is not over. The number of new COVID-19 cases remains high and continues to rise. The most important economic policy for a full recovery is to end the disaster itself. This means reducing disease transmission through mask use, social distancing, testing, contact tracing, isolating infected people, improving treatments, and, eventually, the wide distribution of a vaccine. Whatever amount of money the government needs to spend to achieve these objectives would easily pass any form of cost-benefit test. The United States can ill afford not to spend the tens of billions of additional dollars necessary to combat the virus itself.
The economic problems associated with COVID-19 are likely to persist, however, even once the virus itself is under control. In addition to the initial “natural-disaster recession,” which has already begun to taper off, the United States is now suffering a more normal recession linked to high unemployment and reduced purchasing power. The number of unemployed people who were temporarily laid off (which was a result of the natural-disaster recession) has fallen from a high of 18 million in April to nearly three million in October. In contrast, the number of unemployed people who are now permanently laid off (which has to do with the more normal recession) actually rose by almost three million over a similar period.
The good news is that economists and policymakers understand how to treat a normal recession. Yet with the Federal Reserve having done virtually all it can, Biden and Congress need to make another round of fiscal stimulus and family relief their first priority.
One of the lessons that U.S. policymakers learned from the inadequate response in the wake of the Great Recession was that it is critical to do something large. The CARES Act reflected this. It was an impressive and well-timed piece of bipartisan legislation that, in its initial months, provided an astounding 30 percent of GDP in fiscal support. The problem, however, was that the legislation did not reflect the second lesson of the financial crisis: responses to disasters need to be long-lasting. Instead, the act provided extraordinary support for only about four months. After that, most of its provisions expired, leaving a distressed economy without any assistance and a paralyzed Congress and president unable to agree on action. This was predictable. Just as during the financial crisis, it was easier for parties to come together in the beginning of the disaster, when its effects were most acute. After that, differences over how generous social benefits should be, divergent views of the economy’s trajectory and the efficacy of policy, and various political considerations all collided to restore the paralysis that has come to characterize the U.S. political system.
Policymakers must not allow that to happen again. Instead, they should make sure that any future response is both large and long-lasting. No one knows when recessionary conditions might end, so instead of making the policy time dependent, policymakers should make it context dependent; assistance should be a function of the unemployment rate. This means aid would scale up or down automatically with economic conditions and provide hard-hit areas with comparatively more assistance. [...]
THREE OTHER ARTICLES WORTH READING
“Because, underneath all of this is the real truth we have been avoiding: climate change isn’t an ‘issue’ to add to the list of things to worry about, next to health care and taxes. It is a civilizational wake-up call. A powerful message—spoken in the language of fires, floods, droughts, and extinctions—telling us that we need an entirely new economic model and a new way of sharing this planet. Telling us that we need to evolve.” ~~Naomi Klein, This Changes Everything: Capitalism vs. The Climate (2014)
At Daily Kos on this date in 2002—The Bush Administration is out of control:
Bush is enraged that—get this—UN weapons inspectors are not finding any hidden weapons:
The lack of a confrontation thus far between Iraq and inspectors has the White House worried that the Iraqi president might be winning the early public relations battle by creating an impression that he is complying. Aides said those fears prompted the president and Vice President Dick Cheney to deliver separate speeches Monday casting doubt on Saddam's intentions.
How about this -- if the Bush Administration has proof that Iraq is hiding weapons of mass destruction, then release this evidence! Otherwise, shut up. It's telling that the best the Bushies can do is whine.