Yves here. The evidence is strong that the $600 a week unemployment supplement was critical to keep spending from collapsing and allowing some workers to stay current on their obligations, most importantly housing costs. It got money into citizen’s hands faster than the $1200/adult supplement (I have yet to receive mine) and targeted people in acute need.
But rather than continue it or at most modestly trim it, Team R seems determined to end it out of their uncontainable “Kill the poors” impulses. This is politically self-destructive since a fall in spending will hit small business owners, who lean Republican and could puncture the stock market bubble.
By Tom Conway is the international president of the United Steelworkers Union (USW). Produced by the Independent Media Institute
Ken Merkel started cutting expenses as soon as Packaging Corp. of America (PCA) furloughed him along with hundreds of other workers at its Jackson, Alabama, location amid the COVID-19 recession.
Although the Army veteran and community volunteer slashed his car insurance, quit his satellite TV service and canceled a life insurance policy, he still needs $600 in weekly federal unemployment payments to make ends meet.
But this lifeline for Merkel and more than 30 million other unemployed workers is in jeopardy because Senate Republicans refuse to extend the benefits period and pass other legislation critically needed to battle the pandemic.
Instead of safeguarding hard-working Americans who fell on hard times through no fault of their own, callous Majority Leader Mitch McConnell—the person who controls the Senate’s agenda—put them squarely in harm’s way.
The 54-year-old Merkel, for example, got his first job pumping gas when he was 12 and never stopped pushing himself. Now, as infection rates soar across the U.S. and COVID-19 threatens still more damage to the nation’s economy, the former military policeman could lose almost everything he spent a lifetime building.
The Democratic-controlled House already passed the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act to combat the pandemic and help millions of average Americans avert financial calamity.
The commonsense legislation would extend emergency federal unemployment benefits, due to expire at the end of July, through January. It would provide aid to local governments struggling to maintain essential public services because of COVID-19 budget crises, deliver another round of stimulus checks to hard-pressed families and ensure that those who lose their jobs continue to receive health insurance.
The HEROES Act would finally force the U.S. Occupational Safety and Health Administration to take steps to protect workers from COVID-19 on the job. And it would allocate billions of dollars for COVID-19 testing and contact tracing, measures crucial for controlling the virus in hotspots like Alabama and McConnell’s home state of Kentucky.
But more than two months after the House passed the HEROES Act, it languishes in the Senate.
In refusing to bring the measure to a vote, McConnell flaunts both his disdain for average Americans and his indifference to the enormous damage that COVID-19 continues to inflict on the country each day.
He derided the HEROES Act as a “wish list” of giveaways—a windfall for people he considers freeloaders—when it’s really a responsible stopgap measure intended to save lives and sustain unemployed workers until they get back to the jobs they’re proud to do.
McConnell even claimed that continuing the $600 federal unemployment payments, provided on top of benefits supplied by the states, would just give workers a reason to stay home instead of returning to their jobs.
Nothing could be further from the truth.
Laid-off Americans aren’t the lazy moochers McConnell evidently thinks they are. They’re loyal, patriotic workers who faithfully did their part to keep the nation functioning right up until the moment their employers furloughed them.
Walking a mile in Merkel’s shoes—or those of his co-workers—would show this out-of-touch millionaire just how much average Americans struggle right now.
Without the $600 in weekly federal benefits, for example, the PCA workers in Jackson will have to try to scrape by on a scant $275 provided by the state of Alabama. That’s all but impossible.
“I’ve already cut the best I can,” explained Merkel, a winder operator and member of United Steelworkers (USW) Local 9-1083 who not only has his own bills to pay but helps his stepmother with hers. “Ask the congressmen and the senators how much they could go without.”
As if he isn’t already struggling enough, losing federal unemployment benefits will force Merkel to start dipping into his retirement savings. And at that point, he noted, “I’ll be hurting my future.”
Local 9-1083 President Valerie Creagh receives calls and texts every day from colleagues concerned about the $600 payments.
Without that assistance, some risk losing the cars and homes they worked hard to afford. Others would fare much worse.
“It would actually force some of our members into poverty,” predicted Creagh. “I hate to say that, but it’s just the truth.”
Merkel would be happy to let the federal government keep the unemployment money. What he really wants is to go back to work.
“I earned my place,” he said, noting the skills and training his trade requires. “My desire is to continue to gain, to work and to get more out of life.”
Workers around the country face the same plight as their PCA counterparts.
Another 1.3 million filed unemployment claims in the week ending July 11, joining the tens of millions who already lost their jobs because of COVID-19.
Layoffs began in the service sector; cascaded across the steel, rubber, aluminum, paper and auto industries; and now threaten thousands of airline workers.
Also, as Americans lost their jobs and businesses closed or scaled back, local governments lost billions in tax revenue that they rely on to pay public workers, provide essential services and even fight the pandemic.
Many cities, counties and transit agencies already cut personnel, services and programs because of huge budget shortfalls. And more will do the same in coming months if McConnell and other Senate Republicans fail to deliver the billions in local government aid allocated through the HEROES Act.
Despite this tsunami of destruction, McConnell feels no urgency to take up the legislation.
Workers don’t concern him. Corporations do.
As the COVID-19 death toll mounts, McConnell refuses to advocate for ordinary Americans. Instead, his goal is protecting companies that failed to take adequate steps to safeguard workers and customers sickened or killed by COVID-19.
He insists that Congress pass legislation giving corporations sweeping immunity from what—in his mind—will be a mountain of frivolous lawsuits filed by moochers. If he ever addresses the HEROES Act, McConnell likely will insist that corporate immunity become part of the deal.
The HEROES Act isn’t perfect.
It contains a provision called the GROW Act, for example, that would make it easier for employers to stop their contributions to multiemployer pension plans, putting workers’ retirement security at risk. This unacceptable provision must be stricken from the final version of the legislation.
But the HEROES Act provides crucial aid to Americans fighting to pay their bills. It ensures that local governments will continue providing police, fire and other essential services.
And it gives health officials the resources they need to conduct COVID-19 testing, track community spread and fight the infection rate while researchers work furiously on a vaccine.
“Maybe there’s light at the end of the tunnel,” Merkel said. “But meanwhile, we have to get through the tunnel.”
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I thought I had seen some studies you linked to that indicated that the extra money provided to unemployed workers has been a tremendous boost to the economy, much more effective that the trillions spent by the Fed. This would seem to be very valuable information as to the most effective ways to help our citizens.
It is indeed strange that corporations, legal entities which cannot feel hungry or pain, don’t really live or die, get such personal attention from our leaders, but I suppose it looks better than having them cater so exclusively to billionaires and millionaires.
The timing is a little off, but if the reality of our current depression begins to hit voters prior to November, McConnell is in danger of losing the Senate. He’s normally not that dumb so I expect he will toss out some crumbs for the poors (I mean the 99%) so he can skate through the elections.
This piece in The Week might be what you’re alluding to, with a link to a University of Chicago study. It was linked in a Water Cooler last month:
https://theweek.com/articles/921480/best-american-policy-50-years
A similar program in Spain that was initially set to expire in June was then been extended to August and I wonder whether will it be extended more if and when it is realised that the new normal doesn’t come with a rapid job recovery. This is not a minor question socially and politically and will have enormous consequences if McConnell manages to halt it.
Austerians are out of their minds.
I had a conversation with my mechanic about this. Smart guy.
From his conservative point of view, government shutdown of the economy was the “eminent domain” of people’s labor. Therefore, the government needs to pay out benefits to compensate people for lost wages.
He and I both agreed that we were in good jobs and didn’t need the $1200. We still cashed those checks though.
Thanks for this. When I first saw that photo out of Colorado with the people pressed up against the glass of the Capitol building (which I couldn’t find) I thought like a lot of people “Zombies!” Goofballs aside, their concerns for their livelihoods were fully justified.
There’s definitely a lot of stupidity out there. It often resembles bizarre mating displays, hah.
But I think a lot of people are like my mechanic: libertarian on many things, understanding of the social safety net during a national emergency spurred on by a rotted, festering bureaucracy.
The initial program of providing a flat $600 per week was an emergency measure in response to claims that some states benefit systems were programmed in Cobol in the 1960’s and couldn’t easily be modified. Very few people except those favoring the Universal Basic Income thought a flat payment was the best balance between income support and incentives for returning to work.
Four months have passed. I have heard that the Senate is working on a plan that will pay $300 per week in addition to the what the worker will receive from their state benefits. Instead of that, they should offer to double the state benefit up to $600 per week. This would limit the perverse effects of paying 68% of workers a higher amount to not work than what they were earning before. (https://www.dailymail.co.uk/news/article-8337721/Study-68-unemployed-workers-eligible-benefits-HIGHER-former-incomes.html)
For states that still haven’t found a competent Cobol programmer, they should pay a flat $300 per week. I would hope that the political officeholders of such states would pay the price for their lack of competence for that, but competence seems something that voters care little about.
Paying more in unemployment than people earn normally is an effective way to achieve public health goals of getting people to stay home and avoid unnecessary work during a pandemic. The $600 a week extra was literally the most effective part of the stimulus package with respect to the public health response of quarantine. People (employers) are complaining that it was effective because their interests do not align with the quarantine. After decades of policies asserting and establishing the fungibility of labor, many employers are crying about not being able to hire back the exact people they had. Tant pis. “Rational economic actors” don’t have loyalty. It’s just business.
anEnt – “Paying more in unemployment than people earn normally is an effective way to achieve public health goals of getting people to stay home and avoid unnecessary work during a pandemic.”
True. But what about the necessary work? Keeping the supermarkets running and stocked. Keeping the utilities running. Mopping hospital floors. Collecting your trash from the kerbside. Why should any of these folk risk their health and their families when they, too, could stay at home and earn as much if not more? Certainly not a lot less in many cases.
“Necessary work” has to be defined, and the risks of doing it properly compensated.
Don’t you have to be laid off to collect unemployment? I don’t believe you get to opt in to the unemployment system on your own.
Actually you do with the federal supplement of $600. A lot of gig workers are collecting the $600 every week and some are still working their gig jobs. The 1099 will only show that they worked during 2020 but will not indicate when the gig was performed or paid for. It’s a system ripe for abuse.
Lots of our systems are ripe for abuse. Some of it’s even legal. Meanwhile, a few low-income, precarious workers may get a few bucks to splurge on hand sanitizer and disinfecting wipes, deal with the existing problems of gig work as well as less business due to the pandemic, and circulate some money back into the economy. Right now, possible abuse in this case should be pretty low on the list of things we fret about.
Blue team overreach: poor people get a few dollars and undeserved free cheese
Red team overreach: billionaires get $500B more
You go to pandemic with the social safety net you have, not the one that you want. Even libertarians (indeed especially libertarians in the case of Amash) Believe that epidemics are one of the reasons that governments exist. The government(s) shut down the economy. It is thus government’s responsibility to pay for shutting down the economy. Whose fault is it that the government(s) weren’t prepared for the foreseeable (and foreseen) event of epidemic?
“Very few people except those favoring the Universal Basic Income thought a flat payment was the best balance between income support and incentives for returning to work.”
What’s the point of incentivizing a return to work? A lot of jobs haven’t reappeared, and the ones that have probably shouldn’t have if we care about COVID spread, like staff in restaurants and bars.
A lot of the restaurant and bar jobs aren’t coming back, particularly in areas where the techies work. So many of them patronized those restaurants when they worked in the office. Now that they are working remotely long term, and in some cases permanently, a lot of those restaurants are shuttering permanently. At least that is my view here in Seattle.
Maybe they could learn to code?
Employers should pay more to lure them back. These jobs Paychecks have been lagging inflation for decades. If this is how we fix it, then so be it. If workers are essential to your economic survival then treat them that way. At this point that means $$$, not preferred parking spaces for a month. Their health is on the line.
Otherwise, perhaps we can get by with more automated checkout systems.
This is the opportunity to increase the federal minimum wage to $12/hr ($10 < 21 years old). If a company can't pay that, then the societal risk of infecting workers isn't worth having the job open.
The feds can then double the state unemployment payment with a max of $600/week and minimum of $250/week. Same logic, if somebody is going to get paid less than $20k/year, then the societal risk of an infected worker and family is too high.
The stats are in from several sources and it is clear that the lower wage people are at or above last year's spending due to the stimulus and unemployment benefits. They are pumping money into the economic machine creating jobs.
Upper middle class and wealthy are substantially below pace in spending (I think -15% was last number I saw from a couple of sources) so shoveling money at the upper 20% won't stimulate the economy – it will just increase the wealth of the top 20%. This is the exact opposite of the Laffer-Chicago-Heritage model used by the GOP for planning economic stimulus.
The 800 pound gorilla in the room is the very real possibility that the Dreaded Pathogen is functionally similar to various sorts of ‘common cold’ and thus will be endemic in the population from here on out. There has never, to my knowledge, been a vaccine effective against the ‘common cold.’ This leaves us in a situation where the society will be in a constant state of low level crisis for the foreseeable future. Old fashioned Corporate Capitalism will not return. Some hybrid of Private Capital and Public Investment is Capitalism’s best chance for hanging on past the near term.
A prediction: at some point in the mid term future, someone will step in and remove obstructionists like McConnell and his fellow Paleocrats from their positions of power. This could happen from either end of the political spectrum.
Most of the people reading the posts here can come up with a quick list of workable solutions to the developing crisis. Removing the fossils who oppose any plan not favouring the Oligarchs interests is the next task.
The Covid-19 pandemic is a crisis. Never let a good crisis go to waste.
I think if that comes to pass, it will be the bad flu and we will eventually just come to accept it and there will be many dead. The true nightmare scenario is if the first time you get it, it scars your cardiovascular system so you are never quite whole again, and then each repeated bout grinds you down some more until you are incapacitated with emphysema like symptoms and unable to function and ultimately die. I’m sure some of us will be relatively resilient and the virus may soften a bit eventually. But it doesn’t sound good.
Endemic in some countries, and I would expect a huge capital flight to safety leaving the constant crisis for greener pastures. I don’t see wealthy or competent people putting up with this nonsense forever, and there are countries with their act together that will open the door for people with skills or a big enough bag of money…
But this is the phase where Bernie and the Democrats were “really going to fight for the working class” unlike the phase where they gave three trillion dollars to Blackrock to buy Apple Corporation bonds (even though Apple is sitting on a couple hundred billion in cash). Could it be that they got hornswoggled?
Both parties need to die.
And where is Bernie these days? Hiding out in Biden’s basement, it would seem. That is the problem with Bernie’s style of revolution – its seasonal. During a presidential cycle, it get put in a box, placed in on a shelf, buried with boxes of the holiday decorations, in a storage locker located on the wrong side of the tracks in Podunk, Virginia.
You forgot the part about collecting $150 million dollars from the gullible, the poor and the beaten. Thanks Bernie
Bernie is old enough and accomplished enough that if he wants to retire, I think he’s earned it. Nobody says you have to keep tilting at windmills until you die. The progressive wing will find anew voice.
He’s fundraising for House, Senate, and down ballot candidates, and racial justice and pandemic relief organizations; and recruiting for phone bankers for the candidates he’s supporting. Republicans control the Senate and the Democrats don’t care about doing any better, but he continues to propose and cosponsor legislation.
https://berniesanders.com/get-involved/
But to be fair and balanced and show that the GOP is now the workers’ party,
Mitch also, along with the $600/wk UI supplement, wants to leave out surprise medical billing reform:
If corporations really do concern Mitch on a real-world level – (not just the whims of a nasty little prince beauregard) – he will definitely get off his sick, sadistic little butt and pass this legislation. Let’s all encourage him to go with “nothing’s perfect but everything is important” and just do something for a change. His beloved fantasy of corporate supremacy is in jeopardy because without people to exploit, corporations are dust in the wind. Much like Mitch himself. So, I could go on. And on. But I don’t wanna lose my commenting privileges here on NC. And I’m outa nice words.
Hmmm. Looks like we have a possible convert to Mitch-anon.
I thought Mitch mostly wanted corporate immunity to liability for exposing people to covid, as a step towards making them immune to pretty much everything.
The Corona pandemic exposed what a fragile hollow shell the US economy has become. We produce little or nothing tangible. Our labor force is divided into a service-based underclass and much smaller privileged and declining professional class — now enjoying the temporary privileges of continuing to have employment while enabled to work from home.
The Corona pandemic and fears unemployed much of the service-based underclass. No one knows for how long, and worse no one knows how many of the service-based jobs along with the small businesses that provided those jobs may be gone after Corona passes … if it does.
How many of the professionals working from home really believe their remote tasks couldn’t possibly be shifted from the US to somewhere far far away? How many expensive office buildings once filled with workers now working remotely may never see those remote workers again?
Other than the CARES Act bounty to Big Money in apparent preparation for a massive consolidation and restructuring of the US economy into fewer hands with tightening grips over all access to the withering US markets for goods — what actions has our government taken to care for the Populace? The only actions were temporary stop-gaps that keep Populace from complete collapse into ruin. The economy remains a hollow shell — no ‘invisible hand’ will replace the jobs and small businesses lost or bring back Industry. Local governments face imminent ruin. The structure the economy may have after Corona holds promise of chaos. After doing so little to address immediate problems facing the Populace and so much to help Big Money, the Government is toying with cutting off even that minimal support holding millions from utter ruin and desperate action.
I haven’t tried to read the “HEROES” Act. If passed, does it do anything more than extend modest palliative measures pushing the reckoning to come some months into the future? I also wonder what else might lurk between its covers.
The economy remains a hollow shell — no ‘invisible hand’ will replace the jobs and small businesses lost or bring back Industry.
The Invisible Hand has to have some Actual Cash in it, or there is no Market (genuflects). How does Mitch figure this will work out if most of the population has no wherewithal with which to consume? Maybe the Billionaires are going after bigger game — Millionaires.
I have serious doubts that ‘the poors” will go quietly let alone gently into that good night. As impressive as recent unrest has been, we ain’t seen nuthin’ yet, should mass evictions and hunger become the order of the day.
Team D is hardly better, which is why Pelosi & Co is not pushing for a more effective response to pandemic and the economic collapse. They do have control of one house of Congress including the ability to hold hearings, subpoenas, and have public debates as well as derail any legislation that Team R wants after all. They are doing none of it.
They will pass something, unless they don’t want to be reelected. I suspect they know that, and are just playing to their base a bit before sending more cash out to the masses. They have to understand basics, don’t they?
Both sides are likely to put a few odious items in there with it.
GOP considers extending unemployment benefit at reduced level of $100 a week through December [CNBC]
Not a typo.
I recall an essay https://www.nybooks.com/articles/2018/10/25/suffocation-of-democracy/ about how Mcconell is the real undoing of America now adays. And the precedent comes from the NAzis where Hitler’s second in command was able to give the Oligarchs so much power over the gov and the populace that installing Hitler was merely another compromise. He’s being as dangerous as ever playing games with unemployment and pensions.
The $600 benefit is hard to unravel in a fair way, and it is not all McConnell’s fault.
I have two sons who were getting the $600 benefit. They went out this month and got real jobs, assuming that the benefit was going away. The jobs they got pay a little less than $600 a week, which is equivalent to $15 an hour.
If the benefit is unchanged, they will have a bad deal. They could have stayed home and been better off.
If the jobs they got had been stepping stones to a career, the sacrifice could be accepted. But how many jobs are like that in the low wage arena?
I’d say that your sons, by virtue of getting jobs, will be doing themselves a favor in the long run, even if the benefit is unchanged: Eventually, I believe those benefits are going away, and when those unemployed go out and seek work, they will not only face a lot of competition that will make it difficult to get a job, but if they are out long term, they will be stigmatized as being undesirable by potential employers for being out of work so long (Yes it is a depression, but some employers can be cruel, they couldn’t care less about your excuses for being out of work). Your sons, I believe, will remain more desirable in the job market by minimizing their time of being out of work. Gives them an advantage when looking for something better on the side cause you look more desirable if working when applying for work somewhere else.
From my neck of the woods, $600 a week is very good money. We here in the NADS still have a majority of the jobs available paying around $10.00 the hour. Without benefits. Sadly, the small businesses are starting to disappear. Few have disposable income to spend. Even the “rich” folk in the suburban gated communities are ‘pulling in their horns.’ The number of ‘nomadic’ lawn service independents has grown. Usually men in pickup trucks with lawnmowers in the bed. That and a gas powered weedeater and a gas powered leaf blower.
I’ve scrabbled for work most of my life. It is not a ‘happy’ situation to be in. I have been lucky in that I am able to control my yearnings for “chemical relaxation.” Many of the younger people I have spoken with over the recent past have, once they figure out that I am trustworthy, let on that drug use is well nigh ubiquitous in the lower middle and working class youth cohort. And not just basic weed or booze, but more exotic forms of ‘self psychotherapy.’ I remember when several of us had to cover up like mad at the Chicken Factory when one of the backroom boys came to work still twisting on Ecstacy. He was lucky that day. His friends and co-workers looked out for him.
That was in an almost “lost era” of labour. Then, people had a bit of slack to use for problems. Today, from what I see and hear, the labour market in the lower reaches of the economy is becoming Spartan and Draconian. The bosses are realizing that they have the upper hand in an almost absolute sense. I expect them to squeeze, and squeeze hard to try and maintain their salaries and positions for as long as they can. The Old Guard of Management is not going to compromise or go down without a fight.
Exceedingly ‘Interesting’ Times ahead.
The Old Guard, which includes the political McConnells, are not thinking about what will be happening soon when there is effectively no functioning economy. Also $600 is chump change in areas like the San Francisco Bay Area, Los Angeles, Portland, Seattle, New York, or Boston. Rent is still around $2,000 or more for a small apartment. The money merely guarantees a more bearable caged existence.
So, no money means no economy, and that does mean a war. An actual shooting war. Pity. We almost had one during the Great Depression, but we had enough people like FDR in power as well as functioning opposition parties like the Communist and unions to prevent that. Not this time in the Second Great Depression.
I’ll not play Casandra, but I wonder who will begin the ‘festive fusillades?’
Also, absent some highly visible “leadership” to deal with the ‘problems’ coming up, a lot of the strife will come from the community level. Just like the old game, the lower levels will fight each other for crumbs while forgetting the whole loaves available in the gated communities and mansions outside of town.
Organizing will be crucial, for whatever outcome one desires.
Your comment troubles me. Your two sons just “went out this month and got real jobs”. What is a ‘real’ job — real opposed to what? Are your sons specially skilled or are there all kinds of real jobs available in your area? In better times than these it took more than a month to find a job — real or otherwise. I got the feeling most places would deliberately string out job candidates until they were hungry enough to accept a first offer without dickering.
As JBird4049 comments, $600/wk — $15/hr. is barely enough to live on in most US cities. If people in some parts of the fly-over and back-country South get a windfall of a few hundred extra dollars in their pockets I see no reason to grudge them that paltry windfall and so much the better if they don’t have to work at some shit job to earn it. There never were quite enough jobs and now even fewer. If it pays to stay home then that is good for dealing with the Corona pandemic and might compel employers to pay enough to get a few hires back to work. After retiring from forty plus years working at a pretty good job I didn’t notice any particular moral value to work, and I did notice most people who had the means chose not to work.
via The Hill’s Saagar Enjeti:
Well, Mitch is McConnell (R-KY).
There must be a certain amount of irony associated with passing legislation to CUT Social Security as a means to deal with the New Great Depression given that it was one of the key programs created in the last Great Depression.
Obama tried his best to cut SS too, and I’m sure Biden will want to cut SS when he is President. It’s nice to see that our political parties can work together to bail out Wall St, millionaires, and billionaires, and screw real Americans.
But one is forced to ask- if one truly wants to Make America Great Again, why do you keep destroying those things that made it great?
And just as a sense of perspective, the TRILLIONS approved in the CARES act for Wall St and billionaires/millionaires (corporations) would make Social Security completely solvent to like 2075.
Has anyone here been keeping up with the polls in Kentucky? The last one I glanced at gave McGrath a small lead.
Well, don’t get yer hopes up. She may win, but her campaign was that she was more in tune with Trump than Mitch. OTOH, it will take her a while to settle in, find the washrooms, yada. BTW, anybody know who Mitch’s likely successor might be?
“Cutting off your nose to spite your face” is how my Mother would have put it.
How is it that so many in the small business class fail to see that income support programs like this are what kees the demand for whatever it is that they’re selling afloat? This is not rocket surgery …
Is the small business class the group most disturbed by the $600/wk temporary benefit? I would think they might be most concerned about paying rent and bills coming due. If they have to share more of the PPP money — if they actually managed to get any — with their employees I can understand why they might be a little unhappy but they can’t have much empathy or depth of introspection if they receive a small windfall and grudge circumstance compelling them to share a little of it.
I believe Big Money is most disturbed by the $600/wk temporary benefit. The Media have stirred up those whose circumstance forces them to work at the jobs where $600/wk competes with what they earn. They have also stirred up those working from home who envy the free-time of the unemployed but find themselves tied to work by their incomes which dwarf $600/wk. Big Money anticipates the many buying opportunities the coming austerity promises to make available. The $600/wk temporary benefit helps the banks holding credit debt and maintains some spending but after the CARES package that is very small potatoes. The $600/wk. delays Big Money from satisfying its lusts for the coming fire-sale cornucopia of failing businesses and property.
It is amazing when you look at how far we have moved from the understanding of the 1940s, to the fantasy world of neoliberalism.
What did the economists learn in the 1940s?
http://delong.typepad.com/kalecki43.pdf
In the paper from 1943 you can see …..
They knew Government debt and deficits weren’t a problem as they had seen the massive Government debt and deficits of WW2.
They knew full employment was feasible as they had seen it in WW2.
After WW2 Governments aimed to create full employment as policymakers knew it could be done and actually maximised wealth creation in the economy.
Balancing the budget was just something they used to do before WW2, but it wasn’t actually necessary.
Government debt and deficits weren’t a problem.
They could now solve all those problems they had seen in the 1930s, which caused politics to swing to the extremes and populist leaders to rise.
They could eliminate unemployment and create a full employment economy.
They could put welfare states in place to ensure the economic hardship of the 1930s would never be seen again.
They didn’t have to use austerity; they could fight recessions with fiscal stimulus.
They had just had the 1930s and had studied it closely.
They knew how those in control would do nothing to help those at the bottom and the only course of action they would accept was military spending. This was the route by which capitalism degenerated into fascism.
There is nothing new in the US; we have just forgotten what they learned before.
There is always money for military spending because this is seen as acceptable.
There is never money to help out those at the bottom as this is not seen as acceptable.
We stepped onto an old path that still leads to the same place.
1920s/2000s – neoclassical economics, high inequality, high banker pay, low regulation, low taxes for the wealthy, robber barons (CEOs), reckless bankers, globalisation phase
1929/2008 – Wall Street crash
1930s/2010s – Global recession, currency wars, trade wars, austerity, rising nationalism and extremism
1940s – World war.
We forgot we had been down that path before.
When the US needed an FDR, it got an Obama.
Now they’ve got Trump.
They’ve taken a more European approach this time.
Trying to maintain the status quo is not a good idea, they needed a New Deal.