At The Liberal Patriot, Peter Juul considers how the pandemic may figure in history. He argues that the misery visited by the covid pandemic may fade for future generations, as the devastation of the 1918-19 flu pandemic did, but developments sparked by the pandemic may leave a greater mark.
"But if future generations remember the COVID-19 pandemic, it’ll probably be because it heralded a major and fundamental shift in America’s domestic political economy. One major reason we still recall the Antonine Plague, for instance, is that it likely set into motion the centuries-long process that ended in the disintegration of the western Roman empire. The Black Death remains in a class of its own, its sheer scale enough to throw any society into existential disarray. It’s already clear that COVID-19 won’t likely have similar effects on American society, but all the same it’s accelerated the country and its politics beyond the model of political economy that’s prevailed since the late 1970s.
Forged by policymakers and politicians scarred by their experiences with stagflation in the 1970s, that model of political economy focused intently on fighting inflation and reining in federal budget deficits – except when it came to cutting taxes for the wealthy. A typical episode occurred in 2015, when the Federal Reserve under then-Chair Janet Yellen – now President Biden’s Secretary of the Treasury – raised interest rates amidst a still-weak recovery from the 2008 financial crash in order to ward off the phantom menace of potential inflation. Likewise, President Barack Obama found it politically necessary to find ways to ensure his signature legislative achievement – the Affordable Care Act – essentially paid for itself through tax increases, budget cuts, and other offsets.
Even before the COVID-19 pandemic hit, though, the wheels had started to come off this model of political economy. Persistently low interest rates even amidst large and sustained budget deficits throughout the 2010s led a number of economists and policymakers to conclude that their earlier ideas were outdated, if not outright wrong.
But it took the pandemic to truly shift the mindset of political leaders and policymakers in Washington. As COVID-19 made its way to the United States in February and March 2020, Federal Reserve Chair Jerome Powell opened up a “fire hose of lending” intended to keep the economy afloat. Over the past year, Congress has passed pandemic three major relief packages – the CARES Act in March 2020, a $900 billion bill in December 2020, and the American Rescue Plan Act this month – worth a combined $4.8 trillion and one of the world’s largest fiscal policy responses to the pandemic. Even so, Powell repeatedly called for more public spending to support the economy – and has given no indication that he intends to take his foot off the economic accelerator any time soon, saying that the Federal Reserve “will continue to provide the economy the support that it needs for as long as it takes.”
Muted and incoherent Republican resistance to President Biden’s relief legislation should be seen as a sign of the changed political times....
While it’s too much to expect that COVID-19 will leave behind a legacy of solidarity and common purpose akin to the Great Depression and World War II, it’s already shifted how many of us think about the role of government and our responsibilities toward our fellow citizens. That may not be apparent amidst the discord we’ve all seen and heard over the past few years, but it’s present – and it’s something liberal patriots should aim to build on moving forward."
Real the whole piece at The Liberal Patriot!