“You never want a serious crisis to go to waste.” That was the sentiment of President-elect Obama’s Chief of Staff Rahm Emanuel at the Wall Street Journal’s annual CEO Council in November 2008 at the beginning of the Great Recession.
From November 2008 through December 2009, the US saw nearly six and half-million jobs disappear from the economy. That translated to the unemployment rate jumping from a pre-recession low of 4.9% in February 2008 to peaking at 10% in October 2009.
How did Emanuel and the Obama Administration respond to this profound level of human suffering? They used the Federal Reserve to buy up trillions of dollars of toxic financial assets like mortgage-backed securities and collateralized debt obligations that supposedly risked the stability of the global economy. These ‘too big to fail’ measures led to Wall Street financial institutions consolidating power in the wake of the crisis.
Emanuel did not waste the crisis and has since been rewarded for his efforts. He now has a swanky job with the boutique investment firm Centerview Partners as a senior advisor.
An economic crisis that took place 80 years before the Great Recession also did not go wasted. The October 1929 stock market collapse plunged the American economy into a decade of unprecedented unemployment, soaring rates of poverty, and innumerable levels of misery. Unemployment reached a peak of nearly 25% in 1933. The average American family’s income drop by 40% between 1929 to 1932.
What was the response to the crisis? President Herbert Hoover infamously refused to take sweeping action to confront the Great Depression. He instead protected entrenched elite interests by signing the Smoot-Hawley Act and avoided making structural economic reforms. With the economy in free fall, Hoover suffered a humiliating electoral defeat to Franklin Delano Roosevelt, winning just six states in the 1932 election.
FDR’s victory was launched from the agenda to use the Great Depression for economic transformation, despite significant shortcomings like centering development around white communities. The organized labor moment pressured FDR and helped enact the New Deal — a series of public works projects, worker protection legislation, and regulatory reforms.
The New Deal was so successful it helped propel FDR to win an extraordinary four presidential elections, leading Congress to pass the 22nd Amendment of the Constitution that limited presidents to two terms in office. Organized labor, the working class, and FDR certainly didn’t let the crisis of the Great Depression go to waste.
Now, we are facing the Coronavirus crisis. In the six weeks, more than 30 million Americans have filed for unemployment. With these job losses, the current unemployment rate may be as high as 23%. Worst yet, some economists predict we could reach 32% unemployment by July. The economic pain currently being felt by so many is simply taking place on an unfathomable scale.
SCROLL TO CONTINUE WITH CONTENT
Never Miss a Beat.
Get our best delivered to your inbox.
Congressional aid in the form of the CARES Act is unsurprisingly insufficient, particularly for the most economically vulnerable. Workers making less than $75,000 a year are currently receiving a measly one-time payment of $1,200 that is somehow supposed to last ten weeks.
Meanwhile, rent and mortgage payments are stacking up. Student loans, medical debt, credit card bills, and car notes still need to be paid. Essential workers around the country delivering packages, stocking grocery store isles, fulfilling orders in warehouses, producing food in factories, and providing care to the elderly are not even receiving hazard pay for working in unsafe conditions, often without access to necessary protective equipment. American workers are getting squeezed.
Aside from the woefully inadequate direct cash payments, the CARES Act also effectively created a $4 trillion rescue fund used to prop up the financial markets and Wall Street. The airlines, cruise industry (many are registered as foreign companies to avoid Federal taxes), fast food giants, oil companies and titans of Corporate American are all lining up. $1,200 for the recently unemployed. $5.8 billion for American Airlines.
Congress, corporations, and the president are using Coronavirus to radically transform our already fissured society into an ever-widening two-tiered plutocracy. Those in power are not letting this crisis go to waste.
We can’t allow this crisis be used to accelerate the gap between the have’s and the growing have-not’s. Lucky for us, there’s strength in numbers. Corporations fear of the collective power of the many. Amazon — one of the most powerful corporations in the world — fired Chris Small, a former New York warehouse assistant manager, in retaliation for organized a small protest to demanding safer working conditions and hazard pay. Amazon understands worker power, and they’re terrified.
This crisis could be used to create a different kind of society. We can choose to ensure every person has access to a good-paying job. We can respond to the disaster by guaranteeing everyone access to high quality affordable housing. This crisis can be a catalyst for securing access to clean air and water for every person. We must not waste this crisis.
Many workers and activists see the potential for these objectives to be delivered through a Green New Deal modeled after FDR’s transformative program. A New New Deal is the type of bold plan that meets the scale of this crisis. Crucially, the Green New Deal is also designed to equitably empower all people across the country, particularly focusing on historically forgotten, marginalized communities.
Workers and their allies can make sure this crisis does not go to waste. Walkouts and rent strikes are tried and tested mobilizing tools that are effective at obtaining power. There’s no telling what could be achieved through nationwide strikes and meaningful solidarity actions from the middle class.
Today, workers and their allies can use this crisis to fight for a Green New Deal and a 21st-century era of social and economic justice. If we choose to let this crisis go to waste, we know precisely how nefarious forces will do everything they can to wield this catastrophe for themselves.