therealnews--2020-03-24--What’s The Best Way To Boost The Economy In A Pandemic?

This is a rush transcript and may contain errors .
It will be updated .
Greg Wilpert : It ’ s the Real News Network .
I ’ m Greg Wilpert in Arlington , Virginia .
As we record this on Monday , Republicans and Democrats are deadlocked in Congress over a $ 1.8 trillion stimulus package to combat the economic fallout from the coronavirus pandemic .
Reports indicate that the plan includes $ 500 billion in bailout money for companies that could go out of business because of the economic downturn .
Also , it includes one time cash @ @ @ @ @ @ @ US resident earning less than $ 100000 plus $ 500 per child .
A vote to pass the stimulus package failed in the Senate late Sunday 47 to 47 along party lines .
Five Republican senators did not participate because they are in quarantine .
60 votes are needed though for the budget measure to pass .
Democrats are opposed to how the stimulus package fails to provide sufficient unemployment aid and that the business bailout portion of the plan includes no protections for workers and little to no oversight .
Here ’ @ @ @ @ @ @ @ say about the plan .
Sen. Elizabeth … : We don ’ t have enough details from the Republicans , but in our caucus there is great unhappiness with how they ’ re trying to advance a proposal that would be great for giant corporations and leave everyone else behind .
We ’ re not here to create a slush fund for Donald Trump and his family or a slush fund for the Treasury Department to be able to hand out to their friends .
We ’ re here to help workers .
@ @ @ @ @ @ @ .
And right now what the Republicans have proposed does neither of those .
Greg Wilpert : Some Democrats have expressed skepticism about the cash payments arguing that more targeted aid would be more effective .
Many Progressive ’ s though support expanding the cash payments portion .
For example , Congresswoman Rashida Tlaib of Michigan has introduced a bill that would provide a onetime cash payment of $ 2000 to every US resident plus $ 1000 per month until a year after the economy recovers .
Joining me now to discuss the @ @ @ @ @ @ @ Doug Henwood and Jeff Hauser .
Doug edits the Left Business Observer and as host of the radio program Behind the News .
And Jeff is the founder and executive director of the Revolving Door Project at the Center for Economic and Policy Research .
Thanks Doug and Jeff for joining us today .
Jeff Hauser : Thanks for having us .
Doug Henwood : Thanks for having me .
Greg Wilpert : There are several issues that I would like to explore with the two of you .
There ’ s a @ @ @ @ @ @ @ over , but I just want to limit it because we don ’ t have that much time .
So first of all , as I mentioned , there ’ s the issue of cash payments .
Now , Bernie Sanders , Alexandria Ocasio Cortez , and Rashida Tlaib have all come out with proposals to expand the Republican plan to issue one time cash payments .
Some people , however , have argued that cash payments make little to no sense at the moment .
So let ’ s start with you @ @ @ @ @ @ @ this idea of cash payments ?
Doug Henwood : I think cash payments are less urgent than targeted aid in the sense of supporting hospitals and first responders and other people who are providing urgent services , caring for the shelter needs of our homeless populations amidst the pandemic , making sure that food gets to the people who need it .
It ’ s not quite as urgent , but it ’ s going to be needed on a very expedited basis .
And I believe we should be in a both @ @ @ @ @ @ @ to which we are in the hole is hard to overstate .
And so we should not say , well , we need to focus on healthcare system versus protecting the income of Americans .
We should try to do both .
We should provide immediate short term payments when we can , but we should not do so before we take care of healthcare .
We should take care of the imminent needs as quickly as possible , but we should be aware that this spending is going to go to levels @ @ @ @ @ @ @ should .
So we just need action quicker , but we should not , therefore , accede to corporate bailouts like the Republicans are proposing .
Greg Wilpert : Doug , I want to get your thoughts on this , but I also want to add that in other programs here on The Real News we ’ ve had economists such as Bill Sprigs of the AFL-CIO say that cash payments would actually be relatively ineffective because this is a downturn where people are basically , the reason that people are not spending @ @ @ @ @ @ @ forced to be at home .
So they ’ ll just be spending more money on things that they don ’ t necessarily need and that it won ’ t benefit the businesses that are in crisis such as tourism or the restaurants and hotels and those kinds of things .
So what ’ s your thoughts on this , on the need for a cash benefit program ?
Doug Henwood : I think the cash benefit is important .
I think there are often a lot of people who are going to @ @ @ @ @ @ @ be able to pay the rent , other basic expenses of life .
And a $ 2000 doesn ’ t go very far , but it ’ s certainly a lot further than zero .
And the targeted argument , I understand that people want to focus on the people most in need , but I ’ m not sure we have the machinery to do that properly in a short period of time , the kind of timescale we need to operate on to get money to people who are really desperate @ @ @ @ @ @ @ address the fact that the economic problem now is not a financial crisis so much is the fact that people can ’ t go to work .
So the whole productive sector at this point is broken .
But on the other hand people do need some cash to pay for food , pay the rent and to pay the utilities .
It would be nice to have some rent moratoriums , foreclosure moratoriums .
But no , we ’ re not having those just yet .
So , and I think it @ @ @ @ @ @ @ people .
The business bailouts , certainly there has to be conditions on them .
And the same with the financial bailouts .
I ’ m really concerned that the Republicans just want to give a blank check .
Bernie Sanders on his live stream last night was talking about $ 500 million for the candy industry .
We don ’ t need that sort of thing .
We need do need protection for workers , but we also need to think about some of these industries .
Do we really need a @ @ @ @ @ @ @ This is the most environmentally destructive thing you can imagine .
We should think also about the airlines .
Can we go back to this world of endless flying that existed before all this ?
We need to think about those kinds of things over the longer term as well .
But obviously some targeted assistance to businesses are important .
The British approach of paying , subsidizing something like 80 % of payroll , although there are a lot of holes in it that ’ s also a possibility to think about @ @ @ @ @ @ @ cash payments are really urgent to get to people and then certain business bailouts but not the blank check unconditional stuff that Mitch McConnell would love .
Greg Wilpert : Well I want to return to the issue of the bailouts in a moment , but before we go I want to ask a question about the targeted aid .
The debate over universal cash payments versus targeted aid to the unemployed particularly and also to the medical sector seems to revolve around questions of effectiveness versus efficiency .
That is universal cash @ @ @ @ @ @ @ that the government can send it right away to everyone without conducting a means test .
But then as I mentioned , some critics say that it ’ s too generalized and won ’ t help those who need it most .
On the other hand , expanding unemployment aid is more targeted .
It ’ s less efficient because it does involve means testing to see who really needs the aid and so in other words it ’ s going to take longer perhaps to get it to people .
So Jeff @ @ @ @ @ @ @ you on this .
What are , what do you think ?
I mean in terms of the targeted aid , I mean do you think that this is something that could be done as quickly as the cash payments ?
What are your thoughts on that ?
Jeff Hauser : I ’ m not sure if it can happen as fast as expansion of the UI system , which we have in place and we have a lot of infrastructure in place to maximize things like UI quickly .
Jeff Hauser : @ @ @ @ @ @ @ like WIC and other targeted food programs .
And obviously we need to rapidly expand the capability of state and local governments to assist the homeless and other , and obviously public health , first and foremost .
So we should expand dramatically the targeted programs that already exist .
But we also , there ’ s no reason why we can ’ t do that and also look into universal basic income style ideas in the short and medium run of the sort that Rashida Tlaib and others are discussing right now @ @ @ @ @ @ @ .
We don ’ t need to connect the two necessarily in the same bill .
The next bill that passes Congress is not going to be the final element of the coronavirus response by this Congress .
So I would urge both targeted programs as essentially the largest volumes that we can push through existing programs as quickly as possible while also hastening to deploy universal basic income as quickly as possible .
I advocate for a both and approach because I think the scale of the problem is tremendous .
And @ @ @ @ @ @ @ activity while keeping people as safe , as sheltered , as fed and with as much healthcare as possible .
And that is a very weird thing to be doing at the same time and that ’ s why we need both targeted aid to make sure that people are okay for their short run needs and we also need the universal basic income measures in order to keep people home because that is what ’ s going to keep us safe as a society or as safe as we ’ re capable @ @ @ @ @ @ @ you both seem to agree pretty much on this both and approach , but I just want to push back a little bit more again than on the issue of the cash payments .
That is , I mean , if everybody , I mean , what benefit would it be for somebody who is already making a decent income and is able to work from home , let ’ s say , to receive a cash benefit versus if that money couldn ’ t be used instead for targeting and towards other @ @ @ @ @ @ @ .
What do you ?
Doug Henwood : Well first of all , I just want to make a point about the unemployment insurance system .
It only covers about two thirds of people who ’ ve lost their jobs .
There are big holes in it .
States have tightened eligibility and duration over the last several years , especially in the wake of the great recession .
So that there ’ s some real serious holes in the unemployment insurance system that we would have to fix and that would take @ @ @ @ @ @ @ sure there are a lot of states that wouldn ’ t want to play along with that .
But on the question of people getting money that don ’ t deserve it , we can always tax it away next year on it .
It ’ s not like this money ’ s going to be gone forever .
But I think the advantage of getting it out quickly and that sense of a boost of confidence that you ’ re getting a check in the mail , it ’ s very important @ @ @ @ @ @ @ .
And Warren Buffet doesn ’ t need his $ 2000 , but it ’ s going to take a long time to find out who the lawyers are , who the Warren Buffets are .
And we don ’ t really have that time right now .
So I think just getting it out is urgent , but all the other things are extremely important .
Expanding unemployment insurance system , making sure that people have healthcare coverage , we need expansions of Medicaid .
And again , we ’ re going @ @ @ @ @ @ @ states over that .
But yeah , there ’ s a whole lot of things that need to be done .
Targeted aid for industries , aid to the first responders .
Also state and local governments are going to be really hitting a big fiscal hole or the federal government is the only entity that can do anything about that at this point .
So yeah , there ’ s a whole lot of things that have to be done .
It ’ s beyond both and , it ’ s many @ @ @ @ @ @ @ Wilpert : I want to turn now to the issue that of bailouts , which you ’ re actually already started talking about Doug , but as we saw earlier , this has been a major stumbling block with Democrats who are saying that the bailouts for companies should be tied to a number of conditions such as limits on layoffs , on CEO pay , on stock buybacks among other provisions .
Now , Jeff , you and your colleagues at CEPR , Dean Baker and Eileen Applebaum , presented a series @ @ @ @ @ @ @ , but I don ’ t think it included any bailout money for companies .
What do you think of the idea of providing bailout money ?
Jeff Hauser : I think it is difficult to administer in a completely fair way .
That isn ’ t to say none of it should happen , but I think it will take a little bit of time and it ’ s better to try to do bridge activities .
I would like to believe the Federal Reserve can be helpful in this regard .
@ @ @ @ @ @ @ their programs have not been as fair to small and medium sized business as to large businesses .
Some of that include , based off of their past experiences , some of it is their bias as the Federal Reserve is made up of individuals who are accustomed to dealing with the largest businesses .
I don ’ t think we should rush a mechanism through given the current existence of bankruptcy laws and also the ability to experiment with laws as in the United Kingdom that Doug was referencing to try to @ @ @ @ @ @ @ wages .
I ’ m wary to rush to bailouts when there are other policy tools that we have .
And bailouts that are rushed are likely to have fewer conditions and be less well suited to the actual need of keeping workers connected to employers as long as possible .
Greg Wilpert : Yeah , I think that ’ s an interesting idea actually .
That ’ s also something that they apply in Germany , which is known there as a short work where basically the number of hours that people @ @ @ @ @ @ @ subsidizes the lost income to a certain percentage .
I think it ’ s around 60 to 70 % .
So they don ’ t make their full income , but they almost do even if their work hours are reduced by half .
What do you think Doug ?
Is that the better way to go ?
You mentioned earlier the importance that some industries ought to receive bailouts .
What do you think ?
Doug Henwood : Yeah , I think the wage subsidy idea is a good one .
I @ @ @ @ @ @ @ for me to endorse subsidizing capitalists to do their work , but you know like these are urgent times and you can ’ t be too picky I guess .
But we also have to worry about entire industries disappearing and the restaurant sector .
It ’ s going to be … What ’ s going to happen in several months if we ’ re ever allowed out of our houses again ?
Will there be any restaurants left besides McDonald ’ s ?
That may be a quality of life issue more @ @ @ @ @ @ @ ’ re , what , 2012 , I think , million people work in the restaurant sector .
If that just disappears , that ’ s going to be dire .
A real dire transition .
A whole lot of smaller retail establishments are going to get hammered .
So we need to think about some ways of preserving these entities for the next several months so they just don ’ t dry up and blow away .
I don ’ t know off the top of my head exactly how to structure @ @ @ @ @ @ @ about the kinds of damage that ’ s going to be done to entire sectors of the economy .
And people who ’ ve been working in the restaurants for all these years , where else they going to go ?
It ’ s not like , oh your skills are all completely transferable to other places .
So we need to think about what kind of economy we want when this is all over .
But the idea that they should be done without conditions is insane .
I mean that ’ @ @ @ @ @ @ @ , the Republican party would like very much , but we do need to preserve payrolls , preserve worker rights , and make sure that they don ’ t waste money on five or six trillion dollars in stock buybacks over the last decade just up in smoke .
I mean this is a very , this is a corporate America left .
It ’ s all very exposed to this kind of shock , heavy borrowing , use of a lot of the money just buying back stock , not investing or @ @ @ @ @ @ @ and D. So there ’ s going to be an awful lot of corporate bankruptcy coming up because of this high debt levels and we have to be prepared for that .
Entire companies , entire sectors are going to be disappearing soon .
Greg Wilpert : Yeah .
That ’ s actually something interesting that I was reading also someplace that corporate debt is higher now than it was back in 2008 just before the great financial crisis .
Doug Henwood : Oh yeah .
It ’ s the highest in history @ @ @ @ @ @ @ Wilpert : Yeah .
And so that will definitely mean something if companies don ’ t , aren ’ t able to make their interest payments , then they ’ re of course , can they go bankrupt , which is the definition of bankruptcy .
But I would just want to give you guys , both of you , an opportunity to summarize .
What do you think briefly are the main elements that ought to be in this economic stimulus plan that is being debated right now in Congress ?
Let @ @ @ @ @ @ @ .
Jeff Hauser : State and local aid is urgently needed and is wildly insufficient in the McConnell/Trump plan .
State and local governments are literally on the front lines of this dilemma .
They don ’ t have the ability to print money unlike the federal government .
Their sales and income tax revenue , but especially their sales tax revenue , we hope their sales tax revenue is culminating at the moment .
That is in fact our goal .
So we should be shoveling money to them so that they @ @ @ @ @ @ @ ’ re programs to help support the homeless , public health .
We need money there ASAP .
And in fact if it ’ s necessary to take that and unemployment insurance and move that through much more quickly than we figure out the macro economic and labor market aid , I think that would be fine .
I think we need money sooner rather than later to deal with the immediate crisis , which is to keep people in their homes , fed , safe and not getting each other sick .
@ @ @ @ @ @ @ And I think the desire to rush the macro economic response and keep it connected to aid , to hospitals , state and local governments and the like is just ridiculous and it is a mechanism by which corporate America hopes to get unfettered aid under an urgency that they don ’ t really have at the moment , especially given the existence of Chapter 11 bankruptcy , which is just an important backdrop to this conversation .
But then I think we need to move very quickly to a large macro economic @ @ @ @ @ @ @ but is also just broadly concerned with keeping up confidence in the economy and keeping as many workers connected to businesses as possible .
Businesses that are better suited to Chapter 11 bankruptcy like airlines , we should be less sensitive to their shareholders and their current executives .
Then in the case of restaurants , which as Doug mentioned , it ’ s not really the fault of a small restaurateur that they don ’ t have pandemic insurance and that they , it ’ s very unlikely many restaurants have been @ @ @ @ @ @ @ we , over time , can come up with an efficient and fair and just macro economic response , but we need to get that aid out to state and local governments and to hospitals ASAP .
Greg Wilpert : And Doug , what do you think are the top priorities at this moment ?
Doug Henwood : Well , I agree with a lot of what Jeff said .
I think it gets aiding state and local government is extremely important at this point , especially in a , given how AWOL @ @ @ @ @ @ @ lot of this .
So the states in particular are doing an awful lot of the work of mobilizing an emergency response .
And I also , I put a higher priority on the $ 2000 payments .
I think that ’ d be really a good thing for most people .
And I kind of said we could tax it away if there are any efficiencies involved , inefficiencies evolve next year .
But I think also this , oh wait , not even thinking about the kind of psychological damage this @ @ @ @ @ @ @ ’ s this going to do to us as people as we emerge from this ?
I don ’ t know .
I mean there ’ s going to be some kind of really very serious readjustment problems if we ever emerge from this .
And we need to start thinking about that because there ’ s just going to be , there ’ s just so much loneliness and anxiety .
It ’ s going to eat away at a lot of us .
It ’ s a very difficult period and @ @ @ @ @ @ @ have to be mobilized around , there ’ s also this psychological , our health as a society is really going to be a very serious issue after this and we need to start thinking about that too .
Greg Wilpert : Yeah , and that ’ s a very interesting point .
Unfortunately we ’ re going to have to leave it there for now .
I was speaking to Doug Henwood , editor of the Left Business Observer and Jeff Hauser , founder and executive director of the Revolving Door Project @ @ @ @ @ @ @ Research .
Also , both of them have presented plans that are in more detail than we could discuss today and we ’ re going to link to those .
Thanks again , Doug and Jeff for having joined us today .
Jeff Hauser : Thanks for having us .
Doug Henwood : Thanks for having me .
Greg Wilpert : And thank you for joining the Real News Network .

As Congress debates a $1.8 trillion stimulus package, we ask what would benefit ordinary people most: a cash payment for everyone, targeted assistance for those who lose their jobs, or corporate bailouts?
Story Transcript
This is a rush transcript and may contain errors. It will be updated.
Greg Wilpert: It’s the Real News Network. I’m Greg Wilpert in Arlington, Virginia. As we record this on Monday, Republicans and Democrats are deadlocked in Congress over a $1.8 trillion stimulus package to combat the economic fallout from the coronavirus pandemic. Reports indicate that the plan includes $500 billion in bailout money for companies that could go out of business because of the economic downturn. Also, it includes one time cash payments of $1200 for every adult US resident earning less than $100000 plus $500 per child. A vote to pass the stimulus package failed in the Senate late Sunday 47 to 47 along party lines. Five Republican senators did not participate because they are in quarantine. 60 votes are needed though for the budget measure to pass. Democrats are opposed to how the stimulus package fails to provide sufficient unemployment aid and that the business bailout portion of the plan includes no protections for workers and little to no oversight. Here’s what Senator Elizabeth Warren had to say about the plan.
Sen. Elizabeth …: We don’t have enough details from the Republicans, but in our caucus there is great unhappiness with how they’re trying to advance a proposal that would be great for giant corporations and leave everyone else behind. We’re not here to create a slush fund for Donald Trump and his family or a slush fund for the Treasury Department to be able to hand out to their friends. We’re here to help workers. We’re here to help hospitals. And right now what the Republicans have proposed does neither of those.
Greg Wilpert: Some Democrats have expressed skepticism about the cash payments arguing that more targeted aid would be more effective. Many Progressive’s though support expanding the cash payments portion. For example, Congresswoman Rashida Tlaib of Michigan has introduced a bill that would provide a onetime cash payment of $2000 to every US resident plus $1000 per month until a year after the economy recovers.
Joining me now to discuss the stimulus plan and the different proposals are Doug Henwood and Jeff Hauser. Doug edits the Left Business Observer and as host of the radio program Behind the News. And Jeff is the founder and executive director of the Revolving Door Project at the Center for Economic and Policy Research. Thanks Doug and Jeff for joining us today.
Jeff Hauser: Thanks for having us.
Doug Henwood: Thanks for having me.
Greg Wilpert: There are several issues that I would like to explore with the two of you. There’s a lot of course that we could go over, but I just want to limit it because we don’t have that much time. So first of all, as I mentioned, there’s the issue of cash payments. Now, Bernie Sanders, Alexandria Ocasio Cortez, and Rashida Tlaib have all come out with proposals to expand the Republican plan to issue one time cash payments. Some people, however, have argued that cash payments make little to no sense at the moment. So let’s start with you Jeff, what do you think about this idea of cash payments?
Doug Henwood: I think cash payments are less urgent than targeted aid in the sense of supporting hospitals and first responders and other people who are providing urgent services, caring for the shelter needs of our homeless populations amidst the pandemic, making sure that food gets to the people who need it. It’s not quite as urgent, but it’s going to be needed on a very expedited basis. And I believe we should be in a both and approach to most of the degree to which we are in the hole is hard to overstate. And so we should not say, well, we need to focus on healthcare system versus protecting the income of Americans. We should try to do both. We should provide immediate short term payments when we can, but we should not do so before we take care of healthcare. We should take care of the imminent needs as quickly as possible, but we should be aware that this spending is going to go to levels that has never gone with and it should. So we just need action quicker, but we should not, therefore, accede to corporate bailouts like the Republicans are proposing.
Greg Wilpert: Doug, I want to get your thoughts on this, but I also want to add that in other programs here on The Real News we’ve had economists such as Bill Sprigs of the AFL-CIO say that cash payments would actually be relatively ineffective because this is a downturn where people are basically, the reason that people are not spending money is mainly because they’re forced to be at home. So they’ll just be spending more money on things that they don’t necessarily need and that it won’t benefit the businesses that are in crisis such as tourism or the restaurants and hotels and those kinds of things. So what’s your thoughts on this, on the need for a cash benefit program?
Doug Henwood: I think the cash benefit is important. I think there are often a lot of people who are going to be completely broke, won’t be able to pay the rent, other basic expenses of life. And a $2000 doesn’t go very far, but it’s certainly a lot further than zero. And the targeted argument, I understand that people want to focus on the people most in need, but I’m not sure we have the machinery to do that properly in a short period of time, the kind of timescale we need to operate on to get money to people who are really desperate now. Also, I want to address the fact that the economic problem now is not a financial crisis so much is the fact that people can’t go to work. So the whole productive sector at this point is broken. But on the other hand people do need some cash to pay for food, pay the rent and to pay the utilities. It would be nice to have some rent moratoriums, foreclosure moratoriums. But no, we’re not having those just yet. So, and I think it’s important to get cash to people.
The business bailouts, certainly there has to be conditions on them. And the same with the financial bailouts. I’m really concerned that the Republicans just want to give a blank check. Bernie Sanders on his live stream last night was talking about $500 million for the candy industry. We don’t need that sort of thing. We need do need protection for workers, but we also need to think about some of these industries. Do we really need a cruise ship industry at this point? This is the most environmentally destructive thing you can imagine. We should think also about the airlines. Can we go back to this world of endless flying that existed before all this? We need to think about those kinds of things over the longer term as well.
But obviously some targeted assistance to businesses are important. The British approach of paying, subsidizing something like 80% of payroll, although there are a lot of holes in it that’s also a possibility to think about.
But yeah, I think the cash payments are really urgent to get to people and then certain business bailouts but not the blank check unconditional stuff that Mitch McConnell would love.
Greg Wilpert: Well I want to return to the issue of the bailouts in a moment, but before we go I want to ask a question about the targeted aid. The debate over universal cash payments versus targeted aid to the unemployed particularly and also to the medical sector seems to revolve around questions of effectiveness versus efficiency. That is universal cash aid seems to be more efficient in that the government can send it right away to everyone without conducting a means test. But then as I mentioned, some critics say that it’s too generalized and won’t help those who need it most. On the other hand, expanding unemployment aid is more targeted. It’s less efficient because it does involve means testing to see who really needs the aid and so in other words it’s going to take longer perhaps to get it to people.
So Jeff, I want to get back to you on this. What are, what do you think? I mean in terms of the targeted aid, I mean do you think that this is something that could be done as quickly as the cash payments? What are your thoughts on that?
Jeff Hauser: I’m not sure if it can happen as fast as expansion of the UI system, which we have in place and we have a lot of infrastructure in place to maximize things like UI quickly.
Greg Wilpert: You mean unemployment insurance.
Jeff Hauser: I think [crosstalk 00:07:53] things like WIC and other targeted food programs. And obviously we need to rapidly expand the capability of state and local governments to assist the homeless and other, and obviously public health, first and foremost. So we should expand dramatically the targeted programs that already exist. But we also, there’s no reason why we can’t do that and also look into universal basic income style ideas in the short and medium run of the sort that Rashida Tlaib and others are discussing right now. Those make a lot of sense. We don’t need to connect the two necessarily in the same bill.
The next bill that passes Congress is not going to be the final element of the coronavirus response by this Congress. So I would urge both targeted programs as essentially the largest volumes that we can push through existing programs as quickly as possible while also hastening to deploy universal basic income as quickly as possible. I advocate for a both and approach because I think the scale of the problem is tremendous. And we actually want to radically reduce economic activity while keeping people as safe, as sheltered, as fed and with as much healthcare as possible. And that is a very weird thing to be doing at the same time and that’s why we need both targeted aid to make sure that people are okay for their short run needs and we also need the universal basic income measures in order to keep people home because that is what’s going to keep us safe as a society or as safe as we’re capable of.
Greg Wilpert: Doug, you both seem to agree pretty much on this both and approach, but I just want to push back a little bit more again than on the issue of the cash payments. That is, I mean, if everybody, I mean, what benefit would it be for somebody who is already making a decent income and is able to work from home, let’s say, to receive a cash benefit versus if that money couldn’t be used instead for targeting and towards other areas that are in badly in need. What do you?
Doug Henwood: Well first of all, I just want to make a point about the unemployment insurance system. It only covers about two thirds of people who’ve lost their jobs. There are big holes in it. States have tightened eligibility and duration over the last several years, especially in the wake of the great recession. So that there’s some real serious holes in the unemployment insurance system that we would have to fix and that would take some time. And I’m sure there are a lot of states that wouldn’t want to play along with that.
But on the question of people getting money that don’t deserve it, we can always tax it away next year on it. It’s not like this money’s going to be gone forever. But I think the advantage of getting it out quickly and that sense of a boost of confidence that you’re getting a check in the mail, it’s very important and comforting to a lot of people.
And Warren Buffet doesn’t need his $2000, but it’s going to take a long time to find out who the lawyers are, who the Warren Buffets are. And we don’t really have that time right now. So I think just getting it out is urgent, but all the other things are extremely important. Expanding unemployment insurance system, making sure that people have healthcare coverage, we need expansions of Medicaid. And again, we’re going to have trouble with some of those states over that. But yeah, there’s a whole lot of things that need to be done. Targeted aid for industries, aid to the first responders. Also state and local governments are going to be really hitting a big fiscal hole or the federal government is the only entity that can do anything about that at this point. So yeah, there’s a whole lot of things that have to be done. It’s beyond both and, it’s many and have to be done.
Greg Wilpert: I want to turn now to the issue that of bailouts, which you’re actually already started talking about Doug, but as we saw earlier, this has been a major stumbling block with Democrats who are saying that the bailouts for companies should be tied to a number of conditions such as limits on layoffs, on CEO pay, on stock buybacks among other provisions. Now, Jeff, you and your colleagues at CEPR, Dean Baker and Eileen Applebaum, presented a series of proposals for an economic rescue program, but I don’t think it included any bailout money for companies. What do you think of the idea of providing bailout money?
Jeff Hauser: I think it is difficult to administer in a completely fair way. That isn’t to say none of it should happen, but I think it will take a little bit of time and it’s better to try to do bridge activities. I would like to believe the Federal Reserve can be helpful in this regard. There are some reasons to believe that their programs have not been as fair to small and medium sized business as to large businesses. Some of that include, based off of their past experiences, some of it is their bias as the Federal Reserve is made up of individuals who are accustomed to dealing with the largest businesses. I don’t think we should rush a mechanism through given the current existence of bankruptcy laws and also the ability to experiment with laws as in the United Kingdom that Doug was referencing to try to keep workers connected to employers through subsidizing wages. I’m wary to rush to bailouts when there are other policy tools that we have. And bailouts that are rushed are likely to have fewer conditions and be less well suited to the actual need of keeping workers connected to employers as long as possible.
Greg Wilpert: Yeah, I think that’s an interesting idea actually. That’s also something that they apply in Germany, which is known there as a short work where basically the number of hours that people work is reduced and then the government subsidizes the lost income to a certain percentage. I think it’s around 60 to 70%. So they don’t make their full income, but they almost do even if their work hours are reduced by half. What do you think Doug? Is that the better way to go? You mentioned earlier the importance that some industries ought to receive bailouts. What do you think?
Doug Henwood: Yeah, I think the wage subsidy idea is a good one. I know this, it’s painful for me to endorse subsidizing capitalists to do their work, but you know like these are urgent times and you can’t be too picky I guess. But we also have to worry about entire industries disappearing and the restaurant sector. It’s going to be … What’s going to happen in several months if we’re ever allowed out of our houses again? Will there be any restaurants left besides McDonald’s? That may be a quality of life issue more than an economic issue, but they’re, what, 2012, I think, million people work in the restaurant sector. If that just disappears, that’s going to be dire. A real dire transition. A whole lot of smaller retail establishments are going to get hammered. So we need to think about some ways of preserving these entities for the next several months so they just don’t dry up and blow away. I don’t know off the top of my head exactly how to structure that, but we need to think about the kinds of damage that’s going to be done to entire sectors of the economy. And people who’ve been working in the restaurants for all these years, where else they going to go? It’s not like, oh your skills are all completely transferable to other places. So we need to think about what kind of economy we want when this is all over.
But the idea that they should be done without conditions is insane. I mean that’s what, of course the funders, the Republican party would like very much, but we do need to preserve payrolls, preserve worker rights, and make sure that they don’t waste money on five or six trillion dollars in stock buybacks over the last decade just up in smoke. I mean this is a very, this is a corporate America left. It’s all very exposed to this kind of shock, heavy borrowing, use of a lot of the money just buying back stock, not investing or hiring, we’re doing R and D. So there’s going to be an awful lot of corporate bankruptcy coming up because of this high debt levels and we have to be prepared for that. Entire companies, entire sectors are going to be disappearing soon.
Greg Wilpert: Yeah. That’s actually something interesting that I was reading also someplace that corporate debt is higher now than it was back in 2008 just before the great financial crisis.
Doug Henwood: Oh yeah. It’s the highest in history relative to GDP. Yeah.
Greg Wilpert: Yeah. And so that will definitely mean something if companies don’t, aren’t able to make their interest payments, then they’re of course, can they go bankrupt, which is the definition of bankruptcy. But I would just want to give you guys, both of you, an opportunity to summarize. What do you think briefly are the main elements that ought to be in this economic stimulus plan that is being debated right now in Congress? Let me start with you again, Jeff.
Jeff Hauser: State and local aid is urgently needed and is wildly insufficient in the McConnell/Trump plan. State and local governments are literally on the front lines of this dilemma. They don’t have the ability to print money unlike the federal government. Their sales and income tax revenue, but especially their sales tax revenue, we hope their sales tax revenue is culminating at the moment. That is in fact our goal. So we should be shoveling money to them so that they’re first responders, so they’re programs to help support the homeless, public health. We need money there ASAP. And in fact if it’s necessary to take that and unemployment insurance and move that through much more quickly than we figure out the macro economic and labor market aid, I think that would be fine. I think we need money sooner rather than later to deal with the immediate crisis, which is to keep people in their homes, fed, safe and not getting each other sick. That is our most urgent goal. And I think the desire to rush the macro economic response and keep it connected to aid, to hospitals, state and local governments and the like is just ridiculous and it is a mechanism by which corporate America hopes to get unfettered aid under an urgency that they don’t really have at the moment, especially given the existence of Chapter 11 bankruptcy, which is just an important backdrop to this conversation.
But then I think we need to move very quickly to a large macro economic response that is concerned with efficiency, but is also just broadly concerned with keeping up confidence in the economy and keeping as many workers connected to businesses as possible. Businesses that are better suited to Chapter 11 bankruptcy like airlines, we should be less sensitive to their shareholders and their current executives. Then in the case of restaurants, which as Doug mentioned, it’s not really the fault of a small restaurateur that they don’t have pandemic insurance and that they, it’s very unlikely many restaurants have been doing stock buybacks. So I think we, over time, can come up with an efficient and fair and just macro economic response, but we need to get that aid out to state and local governments and to hospitals ASAP.
Greg Wilpert: And Doug, what do you think are the top priorities at this moment?
Doug Henwood: Well, I agree with a lot of what Jeff said. I think it gets aiding state and local government is extremely important at this point, especially in a, given how AWOL the federal government has been in a lot of this. So the states in particular are doing an awful lot of the work of mobilizing an emergency response. And I also, I put a higher priority on the $2000 payments. I think that’d be really a good thing for most people. And I kind of said we could tax it away if there are any efficiencies involved, inefficiencies evolve next year.
But I think also this, oh wait, not even thinking about the kind of psychological damage this is all going to do. What’s this going to do to us as people as we emerge from this? I don’t know. I mean there’s going to be some kind of really very serious readjustment problems if we ever emerge from this. And we need to start thinking about that because there’s just going to be, there’s just so much loneliness and anxiety. It’s going to eat away at a lot of us. It’s a very difficult period and aside from all the economic emergencies that have to be mobilized around, there’s also this psychological, our health as a society is really going to be a very serious issue after this and we need to start thinking about that too.
Greg Wilpert: Yeah, and that’s a very interesting point. Unfortunately we’re going to have to leave it there for now. I was speaking to Doug Henwood, editor of the Left Business Observer and Jeff Hauser, founder and executive director of the Revolving Door Project at the Center for Economic and Policy Research. Also, both of them have presented plans that are in more detail than we could discuss today and we’re going to link to those.
Thanks again, Doug and Jeff for having joined us today.
Jeff Hauser: Thanks for having us.
Doug Henwood: Thanks for having me.
Greg Wilpert: And thank you for joining the Real News Network.
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therealnews--2020-03-24--Wall Street Before Main Street: COVID-19 Relief Plans Will Hurt Workers

Jacqueline Luqm… : This is Jacqueline Luqman with The Real News Network .
After weeks of dismissal and avoidance , the Trump administration has finally mobilized to address the growing crisis presented by the spread of the novel coronavirus , here in the US .
While the recent announcement of an economic stimulus package of sorts in the works for US citizens that only came after massive financial assistance was given to banks to prop up the stock market , the economic reality of workers around the country is being exposed and acknowledged as the precarious situation that millions of @ @ @ @ @ @ @ are the alleged leaders on Capitol Hill going to do about it , and are their answers so far going to be enough ?
I ’ m happy to be joined by Dr. Jack Rasmus economist , radio show host , and the author of the recent book The Scourge of Neoliberalism : US Economic Policy from Reagan to Trump .
Dr. Rasmus , thank you so much for joining me .
Jacqueline Luqm… : So Dr. Rasmus , we are entering a whole new reality for most American citizens .
Most of @ @ @ @ @ @ @ like this in this country , in our lifetime .
The closest we ’ ve come is what you ’ ve done in your latest article called A Coronavirus Economic War Mobilization Plan , where you compare this crisis to wartime conditions in 1941 , during World War II .
But aside from the uniqueness of this issue in the US , this crisis is also one that disproportionately affects the working class , more so than the wealthy .
Can you explain how workers , and the working poor in particular , @ @ @ @ @ @ @ Dr. Jack Rasmus : Well , the major effect of course , is the massive loss of jobs .
We are about [ inaudible 00:02:05 ] just starting and losing jobs at a rate that we did in the 2008 and nine crisis , which was a million jobs a month .
Even Steven Mnuchin , Treasury Secretary , predicts that we could lose jobs equivalent to 20 % unemployment .
Well , that was pretty close to where we were in 2008 and nine .
We were losing jobs , a million @ @ @ @ @ @ @ , eight months , which was the rate of job loss of the 1929 , ’ 30s Great Depression .
So we could be facing the same thing .
Certainly , this is a crisis at least as equivalent to what happened in 2008 and nine , and what we ’ re seeing now is that they are bailing out the banks even before they fail .
In 2008 and nine , they spent $ 4 trillion to bail out the banks after credit had frozen up , and the banking system crashed @ @ @ @ @ @ @ , there ’ s no money for loans and lending , and other businesses begin shutting down and laying off massively .
That ’ s what happened .
Well , now they ’ re bailing out the banks even before , and the whole financial system , even before it happens .
We spent 4 trillion last time , the Federal Reserve , I ’ m seeing estimates now , expects to spend $ 4.5 trillion more to bail out the banks , 4.5 trillion .
Last week , they already spent over @ @ @ @ @ @ @ and more coming this week .
And the question I have , is if we ’ re spending that much money to bail out the banks before they even fail , why aren ’ t we planning to spend the same amount of money to bail out Main Street and workers who are feeling the impact of this crisis right now , right now ?
What we got in Congress is a bill , a trillion dollars roughly , 500 billion for businesses , banks , and non-financial… Well , actually non-financial corporations @ @ @ @ @ @ @ 500 billion is supposed to go to households in various ways .
That is totally insufficient .
Of course , it ’ s good , let ’ s take it , it ’ s acceptable , but they are so way behind the curve in Congress about what it ’ s going to take , and if we ’ re bailing out the banks to $ 4.5 trillion , Why aren ’ t we planning to spend the same if necessary , to bail out Main Street and workers ?
We ’ re @ @ @ @ @ @ @ very quickly .
They ’ re already unemployed .
They ’ re already working from home , they ’ re already being laid off .
We haven ’ t seen the full effects of the layoffs yet .
Not just people who are having to work at home or stay home , because there ’ s no nannies or you can ’ t afford the nannies , you ’ ve got to stay home if you have K through sixth grade kids , right , take care of them .
What are they @ @ @ @ @ @ @ people in this country , according to government figures , have $ 400 or less for emergencies .
Over half , right ?
Small businesses only have 27 days of income , free income left .
What are they going to do ?
I ’ m talking about your restaurants , your local businesses , and by the way , they employ most of the people in this country .
How are we going to bail them out , or make them even whole here during this crisis ?
We spend $ 1.7 @ @ @ @ @ @ @ business investment , government , and consumption .
500 billion to households gives you about a month worth , a month worth of keeping the economy afloat .
It ’ s going to take a lot more , and I ’ ve proposed that we should prepare to spend three to 4 trillion on Main Street , and households , and workers and so forth , it ’ s going to take [ inaudible 00:06:10 ] before this thing is done with .
They ’ re not even close to that , but @ @ @ @ @ @ @ wartime .
I ’ m a wartime president.
” Well , as you indicated in my article , if you look at the outset of World War II in 1941 , the government ’ s total share of the economy was about 15 % .
within one year , we had increased that to 40 % .
Dr. Jack Rasmus : 40 % .
That ’ s a wartime budget , that ’ s a wartime mobilization , because we are facing an economic Pearl Harbor in this country right now , and @ @ @ @ @ @ @ such .
They are dribbling the money out to households .
They are opening up a wide fire hose to the banks like they did in 2008 , and financial companies , and they ’ re just dribbling it out to the households .
They ’ re going to have to spend a hell of a lot more , if they want to save Main Street and save consumption in this economy , then they ’ re planning to do even now .
They ’ re behind the curve , and more is @ @ @ @ @ @ @ beginning .
The true economic effects of this is only really beginning , and they ’ re going to simply have to step up .
If this is a real wartime mobilization situation , well , let ’ s mobilize .
Let ’ s mobilize the economy like we did in 1942 , and prepare for the government to take over some of these companies , and maybe consolidate some of these .
Let ’ s take the airline industry .
Part of this trillion dollar bill is to give $ 50 billion @ @ @ @ @ @ @ consider this .
The airline industry made a lot of super profits in recent years , and they gave 45 billion of that back to their shareholders in stock buybacks , most of which went to senior managers in the airline industry .
They got most of the buybacks .
So they created a hole of 45 billion , and now they want us to fill that hole for them ?
Let ’ s let some of them consolidate , and let ’ s let the government take over partial nationalization of the @ @ @ @ @ @ @ ’ s do this for other industries .
We did it in 1990 , 91 , we consolidated and government took over the mortgage companies .
Why can ’ t we do that with the airline industry and these other companies , and start doing more for the average homeowner ?
Jacqueline Luqm… : So Dr. Rasmus , how can we expect the government to do any more for American citizens , when not only did the Trump administration , and I ’ m not just going to put it on the Trump @ @ @ @ @ @ @ the Republicans , in allowing something quite nefarious to be put into this so-called relief package , in regard to sick leave , paid sick leave for American workers .
But how can Americans expect the government to do something like nationalize industry when corporations , the CEOs of corporations , can go into the White House and can negotiate with Steve Mnuchin , the Secretary of the Treasury , and the Trump administration to determine what goes into a relief package that all corporations are supposed to adhere to for their workers @ @ @ @ @ @ @ then the big corporations are exempt from providing needed services for American citizens ?
How do we expect our government to do something like nationalize corporations and consolidate them , when the corporations actually seem to have more influence on the government then we ’ re comfortable with ?
Dr. Jack Rasmus : Well , that ’ s an excellent question , because it really shows who runs the US government here , and that ’ s the corporations , and particularly the bankers .
Where ’ d Steve Mnuchin come from ?
@ @ @ @ @ @ @ .
Trump ’ s administration is full of Goldman Sachsers , Gary Cohn , and who was left was from Goldman Sachs , and he and Steve Mnuchin crafted overnight behind closed doors , this four and a half trillion tax cut that was implemented in January 2018 here .
$ 4.5 trillion , not one and a half , it ’ s four and a half trillion minus a one and a half trillion tax [ inaudible 00:10:54 ] on the middle class , and doesn ’ t count the real tax @ @ @ @ @ @ @ .
It ’ s really four and a half trillion , and then last year , they gave them another 427 billion in loopholes , so that ’ s like $ 5 trillion in tax cuts .
Well , that ’ s because the bankers wrote that and they pushed it through Congress here almost overnight in December of 2007 , ’ 17 .
And that ’ s what you got going on now , they are crafting this thing to their advantage , and you begin to see it .
I just @ @ @ @ @ @ @ industry here .
Dr. Jack Rasmus : And even in 2008 , what did the government do ?
Well , the government pretty much bought , in exchange for the bailouts in the auto industry , and in AIG , and so forth , they took up a position of ownership , and those companies are kind of like a quasi nationalization , they send in government inspectors to sit on the shoulder of these guys to make sure that they didn ’ t enrich themselves with the bailout given to them .
@ @ @ @ @ @ @ , the first step to nationalizing these companies .
Well , we ’ ve done this before and that ’ s what we should be doing , and it would cost us far less , right ?
And we would have far more to bail out Main Street here if we did do that .
But as you point out , the problem is the composition of who influences these people in Congress , and you ’ re absolutely right , it was during the Obama administration as well .
We spent $ @ @ @ @ @ @ @ and another 750 billion to bail out the other companies , right ?
And we gave another $ 300 billion in tax cuts , mostly to the companies .
What did the 14 million homeowners who were foreclosed get ?
They got $ 25 billion .
That ’ s all they got .
And of course , auto workers and a lot of other people lost their jobs , and the jobs that came back were low paid jobs , tech jobs , part-time jobs , about half of the pay of the @ @ @ @ @ @ @ was why we had such problem with wage growth over the last 10 years .
So yeah , the problem is the people who are influencing it , you see it in the airline , you see it in the other proposals , and you see it in the Federal Reserve , who was there to bail out the banks , already throwing mountains of cash at the banks , trillions of dollars at the banks , and no one ’ s saying anything about that .
Why isn ’ t the Fed @ @ @ @ @ @ @ Main Street ?
They could do that too .
Dr. Jack Rasmus : They could bail out homeowners .
What we need is a moratorium of at least three to six months on mortgage payments , on auto payments , on student debt , and an injection of income immediately , 500 billion , a trillion , and a guarantee that everybody unemployed is going to get at least three fourths of their income , three fourths of the income they were receiving , at least , those making up to a hundred @ @ @ @ @ @ @ words , the working class , right ?
And that would stave us over a for three to six months .
That should go on for three to six months .
I have a proposal in an article I wrote on my blog , jackrasmus.com , and in that proposal , which is called An Economic Recovery Program–Theirs vs .
Mine , and how to finance it as well .
In that proposal , I have ideas and suggestions of a paid medical leave without exception , three fourths of unemployment insurance payments @ @ @ @ @ @ @ , when this is over , people will go back to their same job at the same rate of pay and same benefits as before , there should be no charges at all for uninsured or insured health care , any services that they have , not just testing , you see .
Any services , no charge , let the hospitals and doctors bill the government , put the whole thing under Medicare , an emergency category under Medicare and administrate it through Medicare if you want , and a whole host @ @ @ @ @ @ @ designed to protect the income levels of working class folks in this country , instead of just financing bankers .
Jacqueline Luqm… : So Dr. Rasmus , let me stop you there for a second , because I want you to explain further a little bit about what you just said , but I want to make it clear to our viewers what the corporations got away with in this meeting with the Trump administration , and it ties to what you just said about guaranteed paid medical sick leave .
Corporations with @ @ @ @ @ @ @ s the Amazons , that ’ s the McDonald ’ s , that ’ s the Burger Kings , that ’ s most of the large chain grocery stores in this country , that ’ s most of the hotels , the large chain hotels in this country , people who are employed in a lot of low wage positions who come into constant contact with other people all day long , as a critical and regular aspect of their job , the corporations , the CEOs of these corporations negotiated with the @ @ @ @ @ @ @ to exempt the companies with 500 or more employees from the mandate in the relief package , that they have to provide paid sick leave , 14 days of paid sick leave , to their employees in response to this coronavirus outbreak .
Now , Dr. Rasmus , these companies claim that they were concerned about how much money they were going to lose waiting for their payment , their repayment from the government .
And so that says to me that they knew they were going to get their money back from @ @ @ @ @ @ @ t want to lose any money waiting for it .
So how does the programs that you suggest in your plan , how do they get paid for , in response to this ridiculous notion that number one , because that ’ s the question people are going to ask , well , how are we going to pay for all these things ?
And we need to know how it ’ s going to be paid for to respond to these businesses , whose reasoning for not providing critical human rights services @ @ @ @ @ @ @ Well , we don ’ t want to lose any money.
” Dr. Jack Rasmus : Well , let ’ s take hospitals .
Let ’ s look at the medical thing .
The hospitals have to bill the insurance companies , right ?
If you ’ ve got insurance coverage , that usually takes 90 days or longer , they get paid .
So waiting is just a fake argument .
The government can reimburse these companies for paid medical leave , just as they can reimburse hospitals .
If the hospitals @ @ @ @ @ @ @ know what ?
Why can ’ t McDonald ’ s wait for the payment from the government ?
I mean , they make payments to the government quarterly , or even in some cases , monthly .
So there is this communication channel , this payment , the accounting channel that exists between them and the government , so the government just deposits its money in whatever account the company indicates , that can be done virtually overnight , if Congress would pass the legislation for it .
It ’ s not as @ @ @ @ @ @ @ up a new administration channel .
Look , they don ’ t like this idea of paid medical leave , because people after this crisis may just say , “ Well , why shouldn ’ t this be permanent ?
” Six paid sick leave days a year ?
I mean , that ’ s terrible .
That ’ s the worst of the advanced world , of all countries in the advanced economies in the world , they all pay 30 days or more of paid sick leave .
Why , in @ @ @ @ @ @ @ only six days , and then only if you got a union contract or if you work for a government agency , most of them don ’ t even have that ?
They ’ re really worried about the fact that , well maybe people are going to say , “ Hey , that ’ s a right .
I shouldn ’ t lose my house and my income because I ’ m sick for no fault of my own.
” My proposal calls for 14 days , and renewable by state legislatures @ @ @ @ @ @ @ to Congress , state legislatures , if they got to stay home or they ’ re unemployed longer than that , during this period of crisis .
There ’ s no reason why there shouldn ’ t be 14 days paid medical leave , which means maybe you ’ re not sick .
A lot of people out there have this virus and they should be staying home , and they are contagious , right ?
Or maybe they ’ re not quote , sick , but their kids are at home now @ @ @ @ @ @ @ school , they have to stay home .
They can ’ t afford nannies or babysitters , right ?
It should be that kind of a paid leave definition , and not just a sick leave .
We need more than just paid sick leave , and it should be extended for as long as this exists .
We have disability payments through the state legislatures , just as we have unemployment insurance payment arrangements .
Well then , you could use the disability , have people sign up for disability at their @ @ @ @ @ @ @ would get a check deposited , well , not even a check , just deposited electronically , from the unemployment insurance , they would get a check deposited to disability insurance , or you could just have the government pay the company , make the company whole for their expenses , in this regard .
The arrangements are there , the administration is not that difficult and there ’ s no need for a long delay , but they don ’ t like the idea that the US might have to catch up @ @ @ @ @ @ @ terms of paid medical leave , and that ’ s why they ’ re resisting it .
Of course , they ’ re not resisting the fact , give me 150 billion in loan guarantees , or give me a 50 billion cash grant here .
Airlines , they ’ re not resisting that .
Jacqueline Luqm… : Right .
They are definitely resisting providing anything for workers who actually are the ones who fuel the economy in this country .
This is the narrative that I think is being turned on its @ @ @ @ @ @ @ , we ’ re seeing people , workers , citizens , realizing that it ’ s not business that drives the engine of the economy in this country , it ’ s the workers .
Well , things are changing and moving very swiftly as each day passes , and I am sure we will continue this conversation about the economic toll this crisis has taken , and will continue to take on the country and its citizens .
But I want to thank you Dr. Rasmus for giving us a great insight @ @ @ @ @ @ @ slice of what we should be demanding from the government to get through this economically .
We will post your articles and your information along with this interview when it publishes , and thank you so much for your time and your information , Dr. Rasmus .
I really appreciate it .
Dr. Jack Rasmus : Glad to join you , anytime .
I ’ m sure this thing will continue , and we ’ ll need updates to it all , but I want folks just to remember that over the last @ @ @ @ @ @ @ with this , right ?
US corporations gave their shareholders a trillion dollars a year every year in stock buybacks and dividend payouts , and under Trump , it ’ s been 1.2 , $ 1.3 trillion .
We ’ ve given them a pot hole of money , and it ’ s time to take some of that back and give it to the folks who really need it .
Jacqueline Luqm… : Well , if you have been wondering how we ’ re going to pay for it , there was @ @ @ @ @ @ @ with The Real News Network , helping you to stay informed and hoping that you stay safe .
Thanks for watching .

Jacqueline Luqm…: This is Jacqueline Luqman with The Real News Network. After weeks of dismissal and avoidance, the Trump administration has finally mobilized to address the growing crisis presented by the spread of the novel coronavirus, here in the US. While the recent announcement of an economic stimulus package of sorts in the works for US citizens that only came after massive financial assistance was given to banks to prop up the stock market, the economic reality of workers around the country is being exposed and acknowledged as the precarious situation that millions of people already know about. But what are the alleged leaders on Capitol Hill going to do about it, and are their answers so far going to be enough? I’m happy to be joined by Dr. Jack Rasmus economist, radio show host, and the author of the recent book The Scourge of Neoliberalism: US Economic Policy from Reagan to Trump. Dr. Rasmus, thank you so much for joining me.
Dr. Jack Rasmus: Glad to join you.
Jacqueline Luqm…: So Dr. Rasmus, we are entering a whole new reality for most American citizens. Most of us can’t remember experiencing anything like this in this country, in our lifetime. The closest we’ve come is what you’ve done in your latest article called A Coronavirus Economic War Mobilization Plan, where you compare this crisis to wartime conditions in 1941, during World War II. But aside from the uniqueness of this issue in the US, this crisis is also one that disproportionately affects the working class, more so than the wealthy. Can you explain how workers, and the working poor in particular, are uniquely affected by this emergency?
Dr. Jack Rasmus: Well, the major effect of course, is the massive loss of jobs. We are about [inaudible 00:02:05] just starting and losing jobs at a rate that we did in the 2008 and nine crisis, which was a million jobs a month. Even Steven Mnuchin, Treasury Secretary, predicts that we could lose jobs equivalent to 20% unemployment. Well, that was pretty close to where we were in 2008 and nine. We were losing jobs, a million jobs a month for at least six, eight months, which was the rate of job loss of the 1929, ’30s Great Depression. So we could be facing the same thing. Certainly, this is a crisis at least as equivalent to what happened in 2008 and nine, and what we’re seeing now is that they are bailing out the banks even before they fail. In 2008 and nine, they spent $4 trillion to bail out the banks after credit had frozen up, and the banking system crashed. And when the banking system crashes, there’s no money for loans and lending, and other businesses begin shutting down and laying off massively. That’s what happened.
Well, now they’re bailing out the banks even before, and the whole financial system, even before it happens. We spent 4 trillion last time, the Federal Reserve, I’m seeing estimates now, expects to spend $4.5 trillion more to bail out the banks, 4.5 trillion. Last week, they already spent over 2 trillion, and we see more and more coming this week. And the question I have, is if we’re spending that much money to bail out the banks before they even fail, why aren’t we planning to spend the same amount of money to bail out Main Street and workers who are feeling the impact of this crisis right now, right now? What we got in Congress is a bill, a trillion dollars roughly, 500 billion for businesses, banks, and non-financial… Well, actually non-financial corporations, $500 billion, and $500 billion is supposed to go to households in various ways.
That is totally insufficient. Of course, it’s good, let’s take it, it’s acceptable, but they are so way behind the curve in Congress about what it’s going to take, and if we’re bailing out the banks to $4.5 trillion, Why aren’t we planning to spend the same if necessary, to bail out Main Street and workers? We’re going to have millions of workers unemployed very quickly. They’re already unemployed. They’re already working from home, they’re already being laid off. We haven’t seen the full effects of the layoffs yet. Not just people who are having to work at home or stay home, because there’s no nannies or you can’t afford the nannies, you’ve got to stay home if you have K through sixth grade kids, right, take care of them. What are they going to do?
Half of the people in this country, according to government figures, have $400 or less for emergencies. Over half, right? Small businesses only have 27 days of income, free income left. What are they going to do? I’m talking about your restaurants, your local businesses, and by the way, they employ most of the people in this country. How are we going to bail them out, or make them even whole here during this crisis? We spend $1.7 trillion a month on the economy, business investment, government, and consumption. 500 billion to households gives you about a month worth, a month worth of keeping the economy afloat. It’s going to take a lot more, and I’ve proposed that we should prepare to spend three to 4 trillion on Main Street, and households, and workers and so forth, it’s going to take [inaudible 00:06:10] before this thing is done with.
They’re not even close to that, but President Trump says, “This is wartime. I’m a wartime president.” Well, as you indicated in my article, if you look at the outset of World War II in 1941, the government’s total share of the economy was about 15%. within one year, we had increased that to 40%.
Jacqueline Luqm…: Wow.
Dr. Jack Rasmus: 40%. That’s a wartime budget, that’s a wartime mobilization, because we are facing an economic Pearl Harbor in this country right now, and they’re not approaching it as such. They are dribbling the money out to households. They are opening up a wide fire hose to the banks like they did in 2008, and financial companies, and they’re just dribbling it out to the households. They’re going to have to spend a hell of a lot more, if they want to save Main Street and save consumption in this economy, then they’re planning to do even now. They’re behind the curve, and more is coming. This problem is only really beginning. The true economic effects of this is only really beginning, and they’re going to simply have to step up.
If this is a real wartime mobilization situation, well, let’s mobilize. Let’s mobilize the economy like we did in 1942, and prepare for the government to take over some of these companies, and maybe consolidate some of these. Let’s take the airline industry. Part of this trillion dollar bill is to give $50 billion to the airline industry. Now, consider this. The airline industry made a lot of super profits in recent years, and they gave 45 billion of that back to their shareholders in stock buybacks, most of which went to senior managers in the airline industry. They got most of the buybacks. So they created a hole of 45 billion, and now they want us to fill that hole for them? Let’s let some of them consolidate, and let’s let the government take over partial nationalization of the airline industry if necessary, and let’s do this for other industries. We did it in 1990, 91, we consolidated and government took over the mortgage companies. Why can’t we do that with the airline industry and these other companies, and start doing more for the average homeowner?
Jacqueline Luqm…: So Dr. Rasmus, how can we expect the government to do any more for American citizens, when not only did the Trump administration, and I’m not just going to put it on the Trump administration, because the Democrats capitulated to the Republicans, in allowing something quite nefarious to be put into this so-called relief package, in regard to sick leave, paid sick leave for American workers. But how can Americans expect the government to do something like nationalize industry when corporations, the CEOs of corporations, can go into the White House and can negotiate with Steve Mnuchin, the Secretary of the Treasury, and the Trump administration to determine what goes into a relief package that all corporations are supposed to adhere to for their workers, but when they come out, then the big corporations are exempt from providing needed services for American citizens? How do we expect our government to do something like nationalize corporations and consolidate them, when the corporations actually seem to have more influence on the government then we’re comfortable with?
Dr. Jack Rasmus: Well, that’s an excellent question, because it really shows who runs the US government here, and that’s the corporations, and particularly the bankers. Where’d Steve Mnuchin come from? Well, he comes from Goldman Sachs. Trump’s administration is full of Goldman Sachsers, Gary Cohn, and who was left was from Goldman Sachs, and he and Steve Mnuchin crafted overnight behind closed doors, this four and a half trillion tax cut that was implemented in January 2018 here. $4.5 trillion, not one and a half, it’s four and a half trillion minus a one and a half trillion tax [inaudible 00:10:54] on the middle class, and doesn’t count the real tax cut for multinational corporations’ offshore operations. It’s really four and a half trillion, and then last year, they gave them another 427 billion in loopholes, so that’s like $5 trillion in tax cuts. Well, that’s because the bankers wrote that and they pushed it through Congress here almost overnight in December of 2007, ’17. And that’s what you got going on now, they are crafting this thing to their advantage, and you begin to see it. I just talked about the freebie to the airline industry here.
Jacqueline Luqm…: Right.
Dr. Jack Rasmus: And even in 2008, what did the government do? Well, the government pretty much bought, in exchange for the bailouts in the auto industry, and in AIG, and so forth, they took up a position of ownership, and those companies are kind of like a quasi nationalization, they send in government inspectors to sit on the shoulder of these guys to make sure that they didn’t enrich themselves with the bailout given to them. And it was like a quasi nationalization, the first step to nationalizing these companies. Well, we’ve done this before and that’s what we should be doing, and it would cost us far less, right? And we would have far more to bail out Main Street here if we did do that.
But as you point out, the problem is the composition of who influences these people in Congress, and you’re absolutely right, it was during the Obama administration as well. We spent $4.5 trillion to bail out the banks and another 750 billion to bail out the other companies, right? And we gave another $300 billion in tax cuts, mostly to the companies. What did the 14 million homeowners who were foreclosed get? They got $25 billion. That’s all they got. And of course, auto workers and a lot of other people lost their jobs, and the jobs that came back were low paid jobs, tech jobs, part-time jobs, about half of the pay of the jobs that we lost, and that was why we had such problem with wage growth over the last 10 years.
So yeah, the problem is the people who are influencing it, you see it in the airline, you see it in the other proposals, and you see it in the Federal Reserve, who was there to bail out the banks, already throwing mountains of cash at the banks, trillions of dollars at the banks, and no one’s saying anything about that. Why isn’t the Fed throwing trillions of dollars at households and Main Street? They could do that too.
Jacqueline Luqm…: Exactly.
Dr. Jack Rasmus: They could bail out homeowners. What we need is a moratorium of at least three to six months on mortgage payments, on auto payments, on student debt, and an injection of income immediately, 500 billion, a trillion, and a guarantee that everybody unemployed is going to get at least three fourths of their income, three fourths of the income they were receiving, at least, those making up to a hundred, 150,000 a year. In other words, the working class, right? And that would stave us over a for three to six months. That should go on for three to six months.
I have a proposal in an article I wrote on my blog, jackrasmus.com, and in that proposal, which is called An Economic Recovery Program–Theirs vs. Mine, and how to finance it as well. In that proposal, I have ideas and suggestions of a paid medical leave without exception, three fourths of unemployment insurance payments without exception, guarantees that when people, when this is over, people will go back to their same job at the same rate of pay and same benefits as before, there should be no charges at all for uninsured or insured health care, any services that they have, not just testing, you see. Any services, no charge, let the hospitals and doctors bill the government, put the whole thing under Medicare, an emergency category under Medicare and administrate it through Medicare if you want, and a whole host of other real provisions that are really designed to protect the income levels of working class folks in this country, instead of just financing bankers.
Jacqueline Luqm…: So Dr. Rasmus, let me stop you there for a second, because I want you to explain further a little bit about what you just said, but I want to make it clear to our viewers what the corporations got away with in this meeting with the Trump administration, and it ties to what you just said about guaranteed paid medical sick leave. Corporations with 500 or more employees, that’s the Amazons, that’s the McDonald’s, that’s the Burger Kings, that’s most of the large chain grocery stores in this country, that’s most of the hotels, the large chain hotels in this country, people who are employed in a lot of low wage positions who come into constant contact with other people all day long, as a critical and regular aspect of their job, the corporations, the CEOs of these corporations negotiated with the Trump administration, and the Democrats agreed to exempt the companies with 500 or more employees from the mandate in the relief package, that they have to provide paid sick leave, 14 days of paid sick leave, to their employees in response to this coronavirus outbreak.
Now, Dr. Rasmus, these companies claim that they were concerned about how much money they were going to lose waiting for their payment, their repayment from the government. And so that says to me that they knew they were going to get their money back from the government, they just didn’t want to lose any money waiting for it. So how does the programs that you suggest in your plan, how do they get paid for, in response to this ridiculous notion that number one, because that’s the question people are going to ask, well, how are we going to pay for all these things? And we need to know how it’s going to be paid for to respond to these businesses, whose reasoning for not providing critical human rights services for their employees hinges on, “Well, we don’t want to lose any money.”
Dr. Jack Rasmus: Well, let’s take hospitals. Let’s look at the medical thing. The hospitals have to bill the insurance companies, right? If you’ve got insurance coverage, that usually takes 90 days or longer, they get paid. So waiting is just a fake argument. The government can reimburse these companies for paid medical leave, just as they can reimburse hospitals. If the hospitals can wait for the payment, you know what? Why can’t McDonald’s wait for the payment from the government? I mean, they make payments to the government quarterly, or even in some cases, monthly. So there is this communication channel, this payment, the accounting channel that exists between them and the government, so the government just deposits its money in whatever account the company indicates, that can be done virtually overnight, if Congress would pass the legislation for it. It’s not as if you’ve got to set up a new administration channel.
Look, they don’t like this idea of paid medical leave, because people after this crisis may just say, “Well, why shouldn’t this be permanent?” Six paid sick leave days a year? I mean, that’s terrible. That’s the worst of the advanced world, of all countries in the advanced economies in the world, they all pay 30 days or more of paid sick leave. Why, in this richest country, it’s only six days, and then only if you got a union contract or if you work for a government agency, most of them don’t even have that? They’re really worried about the fact that, well maybe people are going to say, “Hey, that’s a right. I shouldn’t lose my house and my income because I’m sick for no fault of my own.”
My proposal calls for 14 days, and renewable by state legislatures, don’t leave it up to Congress, state legislatures, if they got to stay home or they’re unemployed longer than that, during this period of crisis. There’s no reason why there shouldn’t be 14 days paid medical leave, which means maybe you’re not sick. A lot of people out there have this virus and they should be staying home, and they are contagious, right? Or maybe they’re not quote, sick, but their kids are at home now because they can’t go to school, they have to stay home. They can’t afford nannies or babysitters, right? It should be that kind of a paid leave definition, and not just a sick leave. We need more than just paid sick leave, and it should be extended for as long as this exists. We have disability payments through the state legislatures, just as we have unemployment insurance payment arrangements.
Well then, you could use the disability, have people sign up for disability at their state level, and just as they would get a check deposited, well, not even a check, just deposited electronically, from the unemployment insurance, they would get a check deposited to disability insurance, or you could just have the government pay the company, make the company whole for their expenses, in this regard. The arrangements are there, the administration is not that difficult and there’s no need for a long delay, but they don’t like the idea that the US might have to catch up with the rest of the world in terms of paid medical leave, and that’s why they’re resisting it. Of course, they’re not resisting the fact, give me 150 billion in loan guarantees, or give me a 50 billion cash grant here. Airlines, they’re not resisting that.
Jacqueline Luqm…: Right. They are definitely resisting providing anything for workers who actually are the ones who fuel the economy in this country. This is the narrative that I think is being turned on its head, amidst this crisis. Hopefully, we’re seeing people, workers, citizens, realizing that it’s not business that drives the engine of the economy in this country, it’s the workers. Well, things are changing and moving very swiftly as each day passes, and I am sure we will continue this conversation about the economic toll this crisis has taken, and will continue to take on the country and its citizens. But I want to thank you Dr. Rasmus for giving us a great insight into just a little bit of a slice of what we should be demanding from the government to get through this economically. We will post your articles and your information along with this interview when it publishes, and thank you so much for your time and your information, Dr. Rasmus. I really appreciate it.
Dr. Jack Rasmus: Glad to join you, anytime. I’m sure this thing will continue, and we’ll need updates to it all, but I want folks just to remember that over the last 10 years, let me just finish with this, right? US corporations gave their shareholders a trillion dollars a year every year in stock buybacks and dividend payouts, and under Trump, it’s been 1.2, $1.3 trillion. We’ve given them a pot hole of money, and it’s time to take some of that back and give it to the folks who really need it.
Jacqueline Luqm…: Well, if you have been wondering how we’re going to pay for it, there was your answer. This is Jacqueline Luqman with The Real News Network, helping you to stay informed and hoping that you stay safe. Thanks for watching.


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