It is September. The pandemic is still raging. As a result, the real economy (if not the stock market) is still being gutted by bankruptcies, small business failures and unemployment. The term “K shaped recovery” has been coined to describe the path we are proceeding down, in which the wealthy experience an easy, upwards “V shaped” recovery after the spring’s momentary slowdown, while everyone else experiences a continued downward slope into poverty. State and local budgets across the country are broken. The winter will likely cause another surge in virus cases. Our only hope is another federal stimulus bill big enough to carry us through the crisis.
So naturally, we seem to be doomed.
You may recall that just a few months ago, the passage of another big federal stimulus bill was seen as a foregone conclusion. The CARES Act, which passed in March and did a decent job of staving off some of the worst effects of the initial coronavirus shutdowns, was clearly not going to last long enough, after the White House’s “ignore the pandemic” approach failed to make Covid magically disappear. The House passed the $3 trillion HEROES Act in May, a bill appropriately sized for the scale of our current crisis. It extended both direct cash stimulus payments to families, and the $600 weekly unemployment bonus — a benefit that has singlehandedly saved millions of Americans from financial disaster, and has enabled spending that has kept much of our economy afloat. It also included money for hazard pay, loan forgiveness, and assistance on housing payments. And, crucially, it contained hundreds of billions of dollars to fill the budget holes in state and local governments, so that public services don’t start shutting down. It is the bill that should have passed already, in a sane world.
We do not live in a sane world. The HEROES Act was never going to make it through the Republican-led Senate. We all knew that. We knew that there would be a process of winnowing that bill down to a smaller size that everyone could grudgingly agree on. But the real purpose of this column is to discuss the fact that it is now September — and not only have we not passed another stimulus bill, but it’s looking increasingly likely that Congress will not pass any new stimulus bill before the November presidential election. Which is — speaking solely from the perspective of someone who believes that unnecessarily impoverishing tens of millions of Americans is an undesirable policy goal — insane.
Since the Democrats passed the HEROES Act, Nancy Pelosi and Chuck Schumer, their leaders in the House and Senate, have been playing hardball in negotiations with the Republicans. This has not proven to be successful. As is often the case, the Democrats find themselves being on the right side of the policy argument in theory, but completely ineffectual in material reality. The Republicans initially countered with a $1 trillion package, and the Democrats figured they could land at $2 trillion, splitting the difference. Instead, the latest Republican counteroffer has been cut in half again, to about $500 billion — and even that may not get enough Republican votes to pass. Meanwhile, millions of people suffer without the benefits they need to survive, and countless businesses get closer to closing forever, and municipal governments prepare to slash services out of necessity. All of which will only make the situation for most people even worse.
It is not easy to negotiate with people who are willing to let the world burn. Republicans are not even willing to tell their constituents to wear masks that might control the pandemic that is destroying their livelihoods and endangering their health. There is no chance that Mitch McConnell and Mark Meadows will be persuaded to agree to an adequate stimulus package out of a sense of responsibility for mass national suffering. But in this case, Democrats do not have the luxury of being morally right while failing to get a bill passed. We need a fucking bill. At minimum, we need a bill that rescues state and local governments and continues enhanced unemployment payments while providing some money to tide over businesses to prevent mass bankruptcies. Failure to get these things, in some form, will cause a long and deep recession that will sentence millions of non-rich people to another lost decade, as the rich get richer. We need something right now, because people are desperate. So Pelosi and Schumer need to reimagine what their leverage is, in a more realistic way.
How do you negotiate meaningfully with people who don’t mind if everything goes to hell? By putting pressure on them, personally and directly. A significant number of Congressional Republicans are okay with letting you be evicted, starve, and catch a deadly disease. As long as the stock market hasn’t crashed, the entire Republican donor base is on the good side of the “K shaped” recovery. The rest of us are on the bad side.
Pelosi and Schumer miscalculated their leverage by failing to take into account what inequality has done to this country. We live in two nations, rich and non-rich, separate and unequal, and if the non-rich nation collapses into great suffering, that is not the concern of the Republican Party, which works for the rich nation. Therefore Republican leaders feel no great pressure to prevent such suffering by passing an adequate bill. One way or another, they need to be made to feel the suffering of the bottom two-thirds of the income distribution, who they do not work for. Traditionally that has been done through street protests and riots and a level of social chaos that grows so dire that even the rich can’t tolerate it. Of course, the reaction to that unrest from the right is often to dial up police oppression, rather than to solve the underlying social problems. If all of this sounds familiar, it’s because it describes what we are all living through right now.
The Democrats must recognize that their leverage is not in the halls of Congress. It’s in the streets. Time to stop disavowing it, and start embracing it. If the federal government lets months go by without coming to the aid of people who now have nowhere else to turn, the chaos will be all that people have left.
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Hamilton Nolan is a labor reporter for In These Times. He has spent the past decade writing about labor and politics for Gawker, Splinter, The Guardian, and elsewhere. You can reach him at Hamilton@InTheseTimes.com.