We’re hearing the word “unprecedented” everywhere we turn these days, but a lot of it comes down to context. Whenever I think about the vaunted American can-do-ness, my thoughts return to probably the most inspiring pull-together moment in post-Civil War American history: our intervention in World War II. It predates me but nonetheless inspires me.
Think what one will of the ultimate outcomes of the Manhattan Project, the notion of going from a whisper in someone’s ear to a laboratory in the desert and ultimately a world-changing weapon within the space of four years would have been said impossible — except by those who achieved it. Similarly, the direct participation by women in manufacturing airplanes and tanks was unthinkable until the month it started to happen. Ordinary Americans made extraordinary sacrifices, most especially those at the bottom of the economic pyramid.
Now we’re faced with a threat that is certain to kill more of us in absolute numbers than all American military and civilian casualties of World War II, which approached 500,000, and make many others homeless. Surely we should be willing to make at least the level of sacrifice we did to prevent the global spread of the totalitarianism. So here’s an idea.
We’ve lived the, ahem, benefits of trickle-down economics for several decades now. How about we try some trickle-up for a change? Putting aside knee-jerk Republican obstructionism, how impossible would it really be to implement a national 3-month moratorium on: consumer and commercial rents, mortgage payments, and credit card payments due in April, May, and June, and suspend the accrual of associated interest? Just put that part of the economy on hold. Leases would expire as scheduled unless otherwise agreed; mortgages would mature three months later.
Granted, that will be a large economic hit. We’re going to experience a huge economic hit anyway. As things now stand, the loss will take place chaotically and (other than outright death) it will worst affect those who can least afford it.
A moratorium would make the amount of loss, which is in large part a “mere” delay, more predictable and orderly. It would pyramid upward to institutions, corporations, and individuals best able to absorb it — all those who’ve been receiving golden mani-pedis from the economic trends and tax policies of recent decades. They’re doubtless eager to give back in the nation’s hour of need, and this is their opportunity to do that. It would be a kindness to facilitate that, truly.
The owner of a duplex who depends on the tenant’s rent to cover the owner’s mortgage payment — would similarly not have that payment to make. The ownership of a complex would experience the same potentially saving grace, as would the owner of a commercial tower. All would not fall neatly into place, but it would be more orderly than what we’re about to face, which will bring at least hundreds of thousands of bankruptcies and much homelessness.
Mega Real Estate Investment Trusts may or may not be able to weather such a crisis painlessly, but even those with international debt would be able to invoke force majeure clauses.
Yes, I see very well the magnitude of delaying an entire quarter of economic activity in such a fundamental sector of the economy. Feel free to elaborate further on the impossibility, but it’s actually more interesting to hear how a nation with our supposed capabilities might find itself capable of making the undoable happen, as we used to be known for doing.
Measures like progressively scaled reductions in salary (above a survivable floor) paid by vulnerable employers, a three-month doubling of social security benefit checks, etc, have pluses and minuses both for vulnerable individuals and for the larger economy. But if we were to make COVID-19 a Manhattan Project for the economic survival (in addition to the project to treat the ill, to invent treatments, and to develop a vaccine to prevent resurgence/recurrence), designed to maximize the economic survival of the most vulnerable individuals and businesses, what would all of that have to look like? What’s the minimum feasible approach?
For starters, a several-day pause in trading on American markets might be a good measure, as we did after 9/11, to give traders time to ponder and adjust to the implications of real leadership and coming together.