Stimulus for a Saner Economy
I have worked for twenty-five years as a sustainable economy strategist, trying to raise awareness about the need to shift to a saner economic system. With the COVID-19 crisis it is time to get very serious not just about bailing out the current economy but harnessing this upheaval to fundamentally redesign an economic system that is destroying the planet and failing millions, even billions of people. Consider that the Chinese symbol for “crisis” is comprised of two words, one meaning danger and one meaning opportunity.
Here are some components of redesign we should be considering right now. Warning these ideas are not for those with hidebound thinking who can’t see past status quo.
First, individuals and families need immediate assistance. Send the first round of checks immediately but don’t stop there. This is a time to get serious about considering a Guaranteed Basic Income (GBI) program. Basic Income is a regular monthly payment from the government to every citizen to meet basic survival needs. The goal is to stabilize people financially and, over time, downsize the many, many stop-gap poverty relief programs currently in place for people in lower income brackets.
Guaranteed Basic Income is not a brand new idea nor is it completely untested. In 1967, Martin Luther King Jr. urged that a guaranteed income would abolish poverty and reduce skyrocketing income inequality (which is higher now that when King was alive by the way).
In 2018, Facebook co-founder Chris Hughes argued that U.S. workers, students, and caregivers making $50,000 or less a year should receive a guaranteed income of $500 a month. Mark Zuckerberg and Bill Gates agree, arguing that automation has fundamentally changed the structure of the U.S. economy. Sir Richard Branson and Elon Musk are also on record saying automation, Artificial Intelligence and robotics have so changed the workforce situation that a Guaranteed Basic Income is the only solution.
The State of Florida has implemented a GBI since 1982. Canada, Finland and Kenya are running GBI pilot programs. Several U.S. cities are developing GBI type programs.
When I was serving as First Lady of Oregon, heading the Oregon Prosperity Initiative, we ran some numbers on the possibility of some form of statewide Basic Income and found that it was cost competitive with the many poverty relief programs already in place in the state. If ever there was a time for such innovation that time is now.
The second key piece of upcoming stimulus packages needs to be an extreme focus on Main Street not Wall Street. The Trump Administration is pushing for the bail out of airlines, cruise ship lines, casinos and even big oil. Come on people! Do we really need fossil fuel powered mega cruise ships and casinos in our world right now?!
The airline industry is a particularly interesting case. Unlike cruise ship companies, airlines do provide some essential services to society and commerce. However, bear in mind, according to The Guardian, over the past five years, the major airlines spent $45 billion in payouts and bonuses to CEOs and shareholders! Reports show that the four big ones – Delta, Southwest, American Airlines Group, and United Airlines Holdings -- together bought back $39 billion worth of their own stock over the past five years, much of it since passage of massive corporate tax cuts in 2017 pushed through by Trump and Republicans. Any assistance given the airline industry must be in the form of loans, with aggressive claw back measures and must forbid payouts of executive bonuses, pay raises or stock purchases. The investment needs to rescue workers who have been laid off not fat cat CEOs. One would think this would be obvious but lobbyists are fighting hard right now to get a stimulus package that would allow these greedy, gauging measures.
Instead of propping up megalithic, and in many cases, superfluous industries, we need to focus on small and mid-size businesses and the creation of aggressive retraining programs to help people currently employed in non-essential, environmentally destructive industries transition into more societally beneficial sectors.
It is the local, communal business structures that should be the focus of stimulus efforts. Local stores and restaurants are a source of jobs and critical threads in the fabric of society. They connect us to people like and unlike ourselves. They provide a sense of communal identity and connectivity.
Our nation is already sitting with an unprecedented amount of debt due in part to corporate bailouts and tax cuts for the wealthy. That debt is going to truly become atmospheric with the current COVID-19 crisis. What we need is not just stimulus for business as usual but as stimulus to a saner economy and way of living and doing business. We can’t just throw money at old status quo industries and measures that are digging us further into the hole. A Guaranteed Basic Income and an intense program of support for small and mid-size businesses provides bottom up versus trickle down support.
The coronavirus pandemic is a force of Nature; the economy is not! The economy is human construct. We invented it and we change and shape and tweak it all the time. We created it, which means we can recreate it. This is the time to do exactly that.
Here's to harnessing opportunity while navigating the danger.