On The Effects of the Coronavirus on American Politics
I was really struck by this article by Matt Stoler in the magazine WIRED:
WIRED OPINION
Covid-19 Will Mark the End of Affluence Politics
The
possibility of a global pandemic will reveal our inability to make and
distribute the things people need—just in time for a presidential election.
On
Tuesday, President Donald Trump dismissed concerns about Covid-19. As he put
it, the virus is "under control" in the US and the “whole situation
will start working out.” But according to Politico, Trump is privately
voicing worries that the impact of the virus will undermine his chances of
reelection. His panicked actions of late—including preventing an American from
being treated in Alabama, at the request of a fearful Senator Richard
Shelby—confirm that this virus is a political event of the first magnitude.
While few in Washington have internalized it, the coronavirus is the biggest
story in the world and is soon going to smash into our electoral politics in
unpredictable ways.
As Jon Stokes notes, we will, in all
likelihood, be locking down travel in some areas of the US for several weeks,
as they did in China. People may be advised against gathering in large groups.
It's not clear what any of this will mean for campaigning or primary voting,
whether most of us will vote by mail or have our votes delayed.
Moreover, the coronavirus is going to
introduce economic conditions with which few people in modern America are
familiar: the prospect of shortages. After 25 years of offshoring and
consolidation, we now rely on overseas production for just about everything.
Now in the wake of the coronavirus, China has shut down much of its production;
South Korea and Italy will shut down as well. Once the final imports from these
countries have worked their way through the supply chains and hit our shores,
it could be a while before we get more. This coronavirus will reveal, in other
words, a crisis of production—and one that’s coming just in time for a
presidential election.
We've been through something like this once
before. My book Goliath describes the 1932 campaign for president, one that
was carried out at the depths of the Great Depression and during an era when
our productive capacity was shut down. Though the crisis at that time was
caused by a banking collapse, not a pandemic, the political backdrop was
analogous. Eighty-eight years ago, “old order” politicians, as they were known,
proved unwilling—even in the face of crisis—to have the government apply its
power toward the broader public benefit. Their recalcitrance prefigured, in
certain ways, the reflexively libertarian thinking of today.
A toxic ideology invited disaster in 1932,
as policymakers did little in response to the collapse of thousands of banks
and businesses. At the depth of that depression, cotton hit its lowest price in
200 years and steel production fell to 15 percent of capacity. The
situation
became so desperate that in just one city, Toledo, Ohio, 60,000 of the 300,000
residents stood in bread lines every day. Children were competing with rats for
food. And thousands were dying of dysentery. The politics too turned desperate,
with one labor leader telling Congress that "if the Congress of the United
States and this administration do not do something to meet this situation
adequately, next winter it will not be a cry to save the hungry, but it will be
a cry to save the government.”
And yet,
the old order had no answers. Congress held hearings, but businessmen,
academics, and bankers proffered only belt-tightening. Within the Republican
establishment, President Herbert Hoover worked 18-hour days, exhorting
confidence while refusing to take even basic steps such as having the
government guarantee bank deposits. Instead, his administration’s army attacked
hungry protesters in Washington, DC, a move that prompted an angry Republican
congressman, Fiorello La Guardia of New York, to remind the president: “Soup is
cheaper than tear gas bombs.”
Meanwhile
on the Democratic side, conservatives and progressives in the party were locked
in a bitter battle for the nomination. Many Democrats agreed with Hoover.
Maryland governor and presidential candidate Albert Ritchie, for instance,
argued that we should rely “less on politics, less on laws, less on
government.” Another candidate, Speaker of the House John Nance Garner, claimed
the greatest threat was the “tendency toward socialism and communism” and
pledged a massive cut in government spending, as well as a sales tax increase.
Others turned to extreme racism and xenophobia. Only Franklin Delano Roosevelt,
who went on to win a contested convention, campaigned on aggressive government
involvement in the economy—or as he put it, a “workable program of
reconstruction,” which later became the New Deal.
That
era’s political desperation is alien to us for a few reasons. First off, we
haven’t faced shortages of such magnitude for a very long time. More
importantly, we have for decades lived under a political framework known as affluence,
a term popularized by economist John Kenneth Galbraith in the 1950s. As an
affluent society, America automatically produces a surfeit of jobs and wealth,
and the problem is solely one of distributing the bounty.
Under the siren song of affluence, we began
offshoring critical production capacity in the 1960s for geopolitical reasons.
In 1971, economist Nicholas Kaldor noted that American financial policies were
turning a "a nation of creative producers into a community of rentiers
increasingly living on others, seeking gratification in ever more useless
consumption, with all the debilitating effects of the bread and circuses of
imperial Rome." Still, Bill Clinton and George Bush accelerated this trend
throughout the 1990s and 2000s.
Affluence politics is not the politics of
being wealthy, though, but rather the politics of not paying attention to what
creates wealth in the first place. That is to say, it’s the politics of
ignoring our ability to make and distribute the things people need. With the banking
collapse in 2008, the election of Trump in 2016 and his mourning of empty
factories, and now with Bernie Sanders dominating the early primaries, that era
may at last be passing. A pandemic disease outbreak would only hasten this
progression and force us back into the politics of production.
With potential shortages of goods, and
restrictions on people’s movement, both parties
are heading into unknown territory. It is likely Democrats
will use this opportunity to further their case for Medicare for All. Pandemic
surveillance and medical bureaucracies focused on billing do not mix
well—stories about astronomical out-of-pocket costs for Covid-19 testing are
already circulating. Republicans are likely to take a more xenophobic approach,
emphasizing restrictions on foreigners and infected Americans. When it comes to
managing shortages, however, both parties are split, just as they were in 1932,
between their Wall Street factions that assume affluence and the less mature
populist factions that seek assertive public power. The Democratic Party
primaries certainly echo those of the Great Depression, with candidates from
Bernie Sanders to Amy Klobuchar trying to wrap themselves in FDR’s mantle.
Regardless, the end of affluence politics means focusing
on whether medicine is on shelves, not bitter disputes over bloated and
wasteful hospital and insurance billing departments. It means caring about
bureaucratic competence in government, and accuracy in media, not because these
are nice things to have but because they are necessary to avoid immense
widespread suffering. It means understanding that pharmaceutical mergers that
benefit shareholders while laying off scientists are destructive, not just
because they are unfair, but because they make us less resilient to disease.
(Shareholders, as it turns out, also have lungs.) Finally, it means recognizing
that wealth, real wealth, is not defined by accounting games on Wall Street,
but the ability to meet the needs of our own people.
We came to these realizations once before in 1932, and
created a vibrant democratic state over the following few decades—one that
rapidly expanded our life spans, defeated the Nazis, and helped create Silicon
Valley. The convergence of the Covid-19 outbreak and the presidential election
will force us to do it once again. We've lived in the world of unreality for
far too long.
As Richmond Federal Reserve Bank president Tom Barkin
recently put it, “Central banks can’t come up with vaccines.” It's time to get
ready for what that implies.
ABOUT
Matt Stoller (@matthewstoller) is the author of Goliath: The Hundred Year War Between Monopoly Power and Democracy (2019) and a fellow at the Open Markets Institute.
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