NY Times: COLUMN: This Is the Stimulus We Need Right Now. It’s Not $1,000 for Every American.

This Is the Stimulus We Need Right Now. It’s Not $1,000 for Every American.
By Reed Hundt
March 20, 2020

The administration and Congress must act — but wisely. The place to start is the overwhelmed health care system.

The health care system like this hospital in Sarasota, Fla., needs urgent support.Eve Edelheit for The New York Times

All happy times are the same; all crises are different. Except one lesson is always the same: There always are two crises.

In all governmental responses to crises, leaders have to focus both on ending the immediate crisis and also on adopting ethical, practical methods of addressing the effects. This is the crisis for leaders.

The Covid-19 crisis really does threaten the American health care system’s ability to keep people safe.

The Trump administration could not have absolutely stopped the Covid-19 invasion. But it is hard to imagine any government doing a worse job to prepare for the event.

But now the administration and Congress must act — and as important, get the right order of action. First and most important, this means rapid federal funding and other executive action to expand and strengthen the health care system. Then we can see what has happened to the broader economy before deciding what to do. Don’t just guess, fearmonger or unethically throw money at the problem. This is what leadership is about — focus, coolheadedness and decisions based on evidence.

These are the obvious needs for federal funding: a billion test kits distributed everywhere to figure out what is the actual spread and possible reoccurrence of the new virus; an elevation of the United States ratio of hospital beds per person from roughly number 30 in the world, equal with Turkey, to tie with Japan for No. 1; urgent development and distribution of treatment choices for the afflicted, especially including at least a 10-times increase in the number of ventilators, as well as an effective means to send them where needed; doubling or tripling the number of health care workers, people who risk their lives to save ours.

This is the stimulus bill Congress must pass within days. The administrative job should be given to states but supervised by a “czar” — I nominate Bill Gates, who has the respect of everyone in technology and health care all around the globe and recently stepped down from the Microsoft board, to be available, even if he did not ask for this role. There is no need for this infinitely political administration to take charge of the management job.

Most important, do not send cash to every adult. The 100,000 people Amazon is now hiring do not need this money; all those who can work via Zoom do not need cash. The country can do without the bread-and-circus approach to this crisis.

Instead let’s have Congress send a $10,000 bonus to everyone in health care and give hospital administrators $20,000 for each new person they recruit to their valiant fighters. These folks are putting their lives on the line and they don’t deserve to watch bystanders get free money.

In perhaps a couple of weeks we can figure out if the data supports a macroeconomic stimulus program and what its size and composition should be.

The good news, if we can use that term, is that now the Republicans are very worried about the coming election. The two parties can strike a deal — but that deal should adhere to two principles: First, help needy people, not corporations. This means increasing unemployment compensation, paid sick leave, child care, access to food for children not getting lunch at school and other obviously humane moves. Second, do what has long needed doing but partisan division has blocked until now. This means public funding for the three major infrastructure platforms that need big investment: transportation, clean power and rural communications (including telehealth).

There are parallels to the response to the 2008 financial crisis. In 2008, the Lehman bankruptcy really did freeze the global financial system and the operations of global capitalism. I’ve seen troubling signs that we haven’t learned from that experience.

After the Lehman bankruptcy, the administration convinced Congress that the country was looking at another Great Depression. That means unemployment above 20 percent. They did this in order to persuade Congress to pass the infamous Troubled Asset Relief Program (TARP), the law that gave Mr. Paulson and his successor as Treasury secretary, Tim Geithner, $700 billion to invest in Wall Street firms, with few if any strings attached. It is among the most unpopular laws enacted in American history.

Treasury Secretary Steven Mnuchin has gone to the same rhetorical tool kit and made the same frightening statement. We are facing, he said, 20 percent unemployment. There is little evidence for this. It might be true and it might not be true. But he is not using this scaremongering to propose a spending package to solve the health care problems. And his proposal is so big it will limit Congress’s ability to spend what is necessary to continue to cope with the health care crisis.

This is why getting the first step right is so important. In December 2008 the incoming Obama team chose a magnitude of stimulus spending that proved about half of what was necessary and lacked long-term stimulus for infrastructure. Their view then and over the years was that the Republicans would not let them do more, and after the painful TARP vote the members did not want to spend much more.

To avoid repeating this history, it is critical to build support for a good initial stimulus by addressing the health care spending needs appropriately and immediately.

As to business bailouts, the lesson of 2008-9 is that the American people do not like, and indeed should not like, government saving from trouble companies that can adopt the business equivalent of “shelter in place.” Others, like Boeing, are integral to the long-run success of the economy, and these companies and their supply chains must be kept in business, not unlike the brave decision of the Obama team to save G.M. and Chrysler. There are very few such companies, and there is time to figure out how to help them on a fair and prudent basis.

This is in the first instance a health care crisis. Address that, Congress. Stay in virtual session. Vote by proxy. Use Zoom to work. Get the health care system the money to build the needed supply chains. Don’t start throwing handouts around like they meant nothing until you know what macroeconomic problem you are trying to solve.

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