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Adapting to a Rapidly Changing Environment…of Economic Policy


I’m going to make the rather narrowly-focused argument that we’re starting to move from a scenario in which each bill stands on its own – in which case Green Lanternism is not a useful mode of analysis – into one where we’re seeing a broader bidding war over an overall issue, which requires a different mode of legislative politics.

Both in terms of political optics – it’s not an accident that Trump’s proposal comes in $100 billion larger than Schumer’s proposal – and in terms of policy (given the long-term implications of under-shooting the stimulus bill in 2009), this is not a moment for budgetary caution. Going bigger than the Republicans has real dividends at this moment.

This is an area where a fair analyist would have to say that Pelosi has a particular weakness. As much as the Speaker is a peerless vote-counter and builder of legislative coalitions, she is also tempermentally conservative when it comes to fiscal policy. Witness, for example, clashes over putting legislative momentum behind the Green New Deal or the adoption of PAYGO rules. This same phenomenon was very much in evidence when it came to the paid leave fight:

As someone who’s pretty MMT-adjacent himself, I don’t think it’s ever particularly helpful to adopt the “tax payer money” trope – which goes for Bernie Sanders in his fight with Amazon as well as for Pelosi – especially when the result is a paid leave program that isn’t going to get the job done.

However, it’s particularly unhelpful in the current circumstances. On a policy level, I think my colleague Erik Loomis is quite correct that the coming recession is going to be a really deep and long one – in addition to the huge disruptions to international supply chains and flows of travel, there are just too many sectors of the U.S economy that have had to shut their doors for an extended period of time to expect anything else. There are going to be a lot more people – mostly low-wage workers in bars and restaurants, retail, arts and entertainment, and so on – who are going to need help than can fit under the rubric of PAYGO. And those people are going to need new, broad-based initiatives that provide genuinely universal paid family and medical leaves, child care, direct job creation and substantial fiscal transfers, debt forgiveness…the list goes on and on.

On a political level, we’re now in a situation in which a President who’s never given a damn about budget deficits wants to pass a big stimulus that’s heavily tilted towards industry bailouts and payroll tax cuts. Consistently out-bidding him not only makes it more likely that we don’t go through another Great Recession or worse, but also that actual Democratic priorities get included in the final product.

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