The American states of Ohio and Illinois shocked the country over the weekend when they announced that all bars and restaurants would close indefinitely. California, New York, New Jersey, Spain, and Ireland all followed with similar decisions within 12 hours of the announcement. The whole world, it seemed, was shutting off and going into quarantine.
With no relief plan or stimulus in sight for most of these U.S. states, workers can expect they will be unable to pay rent, utilities, groceries, and other basic needs.
In the United States, this highlights a situation progressives have been screaming about for years: the median wage earner has no cash reserves, survives without or with minimal health resources, and cannot survive a shock to the economic system.
Coronavirus and Unemployment
Ohio’s Governor Mike DeWine responded to this situation by telling all of those affected to apply for unemployment. This is a truly disastrous approach. The unemployment institution has been hyper-politicized and deliberately sabotaged through years of concentrated anti-welfare ideology.
Unable to process just a small number of applicants in a timely period, even in the best market circumstances of 2019, this institution will crumble swiftly beneath the burden of this crisis. It will cause bankruptcies to skyrocket when lenders come to collect – and, by extension, a run on the banks nationwide.
Unemployment is also a cultural phenomenon. Many people who need help will be too stubborn or ashamed to ask for it. Most Americans are taught never to ask for assistance. It must be offered and given freely. Yet the system of unemployment requires not only that we ask for help, but that we aggressively pursue help, that we demand help, that we argue for it, that we track our records and maintain data to prove that we are even worthy of support.
For the average person, self-conscious about asking for any help to begin with, it’s a shameful and dehumanizing experience which they will not even consider. Many of them would prefer to suffer, starve, and go homeless. And they will. They absolutely will. I have seen this happen, and it will happen now.
Nightmare Scenario
Needless to say, an influx of homeless, unemployed, uninsured Americans walking the streets is less than ideal during the outbreak of a highly contagious global pandemic.
The stark reality of this nightmare scenario has caused even conservatives like Mitt Romney to support a crisis-era Universal Basic Income, originally introduced by the unlikely alliance of Tulsi Gabbard and Alexandria Ocasio-Cortez, and then picked up and supported by small business champions.
This stipulates that every American will receive a living stipend for the duration of the crisis, deftly bypassing the unnavigable bureaucracies of the unemployment institution, the homelessness institution, the food insecurity institution, and others besides.
It is the only real option we have to save our national economy.
I served as a small business crisis counselor for the federal government on two different disaster tours from 2017-2018, and I met a lot of hard-working local entrepreneurs who give their profits back to their workers. For the most part, these business owners can’t even absorb the costs of 30 days of no activity. All of them will go under, all of their property will be foreclosed, and all of their employees will be laid off.
Saving the US Economy
A major stimulus package needs to include both individual and company debt deferral and a cease-order to prevent banks, landlords, and lenders from trying to force-collect payments from affected persons and businesses. The legislation needs to be hard-hitting, and it needs to be passed in the coming days to prevent a catastrophic economic meltdown.
That relief bill needs to be paired with a real emergency stimulus that guarantees a universal living stipend to all people during this crisis, and an overarching deferral on major recurring expenses, including debts and land, in order to prevent mass bankruptcy and a run on the banks.
Photo: Timothy A. Clary, AFP
Landlords should also be permitted to file for state or federal relief in an expedited emergency-schedule process, as they can expect their tenants – residential and corporate alike – will be unable to make their payments.
We need to take all of these steps, we need to take them together, and we need to take them now.
I am proud to see civil leaders taking aggressive, proactive measures in their public health policy to mitigate this pandemic, including those in the states and countries that have chosen to shut down or go into lockdown.
We can continue to lead the fight and set an example for other U.S. states and countries, but we need to build economic protections into our disaster response agenda while we do that, which means guaranteeing all of our citizens and all of our local businesses a basic safety net.
If we fail to take these steps this week, the crisis we create will have our blood on it, and it will be as real of a crisis as any crash ever was.