Second COVID-19 stimulus package stalemate highlights Trump’s flawed economic agenda
The mid-summer stalemate in Washington over the next round of coronavirus stimulus is unfolding in the shadow of two grim realities: a rising tide of coronavirus infections and deaths and news that America suffered the worst quarter in economic history this spring.
The protracted negotiations over the latter stimulus came more than two months after the House passed a plan to help American workers and state and local governments. The Trump administration’s delay and negotiating positions once again reveal that President Donald Trump’s economic agenda is corporatist and non-populist, and that his government agenda is undermining America’s global competitiveness, hurting our ability. to compete with countries like China.
Those on both sides of the aisle opposing Trump’s agenda and his mismanagement of the twin crises of the pandemic and economic collapse must do more than just criticize his mistakes – they must present an economic policy vision that binds one a national renewal agenda with a new approach to global economic engagement – one that does not repeat the naive mistakes of the past that opened the door to China’s rise and that learns from the mistakes of the Trump years.
Trump’s re-election handbook centers on a simple narrative: Foreigners have been taking advantage of America for decades. Trump touts the “best” trade deals, and he ties his domestic policy to an unpredictable foreign policy that amounts to treating America as his closed Mar-a-Lago, keeping the country away from the world’s problems while intimidating others with threats. swagger and unpredictable movements.
The coronavirus crisis shows that security threats and economic challenges know no national borders and respect no walls. The blurred lines between domestic and foreign policy complicate Trump’s political strategy. He will try to claim credit whenever he can, for example by citing a small number of salvaged jobs and stock market rallies as proof that “the crisis is under management” even though 2 in 5 mothers are struggling to save money. food on the table.
Today’s economic reality is the logical result of Trumpian corporate politics: double-digit unemployment, an economy shrinking at an all-time high, and a stock market rising to new heights. Its flagship achievement, a corporate tax cut in 2017, actually raised taxes on many families, racked up massive debt, and left the nation financially ill-prepared for the coronavirus crisis.
What does an alternative program of economic nationalism look like?
First, massive public investment in infrastructure, education, research and technology, especially biotechnology. Putting Americans back to work to rebuild the systems that led to our 20th century domination – quality schools, roads, communication systems, and new biotechnologies – is politically popular and smart policy.
Solving the COVID-19 pandemic is our primary health and economic goal and a reminder that biotechnology is of critical importance to our national security. Some might say that the massive debt that Trump has imposed on us means we cannot afford to fix our problems. On the contrary, more public investment is essential to jumpstart the economy and make the investments necessary to make America more competitive in the world. The key is to target our investments to maximize return by investing in new technologies to launch new businesses in green energy, futuristic transportation, and biomedical advances that will defeat COVID-19 and improve our health.
Second, a new economic nationalism uses tax and regulatory policies to prioritize American families and workers over corporate profits. CARES Act programs have generated billions in profits for banks, made federal grants available to so-called small businesses like the Los Angeles Lakers, and supported the debt of companies that report billions in record profits, like Apple. and United Health Care. Meanwhile, American families have received too little direct help with false hopes of money. This aggressive destruction of the social safety net at home makes America less competitive abroad.
At the height of the coronavirus recession, Trump’s Consumer Financial Protection Bureau struck down a rule requiring payday loans to be made only to those who could repay them, while people still waited weeks and months for receive their coronavirus stimulus payments. We should have learned the lesson from the financial crisis: we should not make non-repayable loans. And there’s no good reason America’s payments system is decades behind the rest of the world, causing billions in overdrafts, late fees, and costs for those who live on paychecks in. paycheck.
Finally, a new economic nationalism would mainstream foreign policy decisions with a greater emphasis on the effect that relations with other countries have on the priority of export-induced job growth in America. In response to the pandemic, the United States should seek to avoid zero-sum competition for medical supplies, such as personal protective equipment, and work with key democratic partners in Europe and Asia to effectively develop and deploy a vaccine once it is ready. Additionally, we need a more stable Commander-in-Chief than Trump, whose erratic moves on complicated issues like Iran and North Korea could easily drag America into yet another costly conflict overseas, like the Iraq war of 2003.
The debate over the next stimulus package won’t be able to address such an ambitious agenda as this – but congressional leaders can use the debate to set the framework for the long-term investments America needs to recover from the crisis. crisis and to revive America’s position in the world.
The authors did not receive financial support from any company or person for this article or from any company or person with a financial or political interest in this article. They are not currently an officer, director or board member of any organization interested in this article.