New Issue: The Coronavirus Economy

March/April 2020 cover

Our March/April issue is out, with coverage of the emerging coronavirus economic crisis. Today we posted Gerald Epstein’s piece on Fed Policy, The Fed and the Coronavirus Crisis.

Here is the p. 2 editors’ note for the issue:

The Coronavirus Crisis

We’re still in the early days of the economic crisis triggered by the coronavirus pandemic, yet the economic data are already unprecedented—and frightening. Our cover art by Brian Hubble includes a stunning graph showing how the spike of 3.3 million new unemployment claims from the third week of March towered above the one-week claims over the previous 20 years. Now we have data for the last week of March—an even more astonishing 6.6 million initial claims, for a total of 10 million new claims so far, just weeks into the crisis. By all accounts, we are facing a severe recession, even with the unprecedented multi-trillion-dollar spending by the federal government.

The virus is not the sole cause of this economic meltdown. A political and economic system that was unprepared for either a pandemic or its economic fallout has made both crises far worse than they needed to be, as Richard D. Wolff points out in the first of three “Making Sense” pieces on the coronavirus crisis in this issue. The private profits of capitalist firms didn’t give them the incentive to prepare for a pandemic, and a corporate-minded government wasn’t able to put public health first, as governments elsewhere have been able to. Leaving such a system intact after all of this “will guarantee the next catastrophe.”

Emmanuel Saez and Gabriel Zucman offer a proposal for social insurance to deal with the economic disruption of stay-at-home orders during the pandemic, based on the idea that the government should act as a “buyer of last resort.” Such a plan would keep businesses alive through the crisis, preserving difficult-to-restore relationships between businesses and employees until demand picks up and social distancing is no longer required.

Gerald Epstein’s contribution to this issue helps us understand the Federal Reserve’s actions so far in response to the crisis. The Fed must deal with both its traditional mandate of managing unemployment and price stability and also with preventing a meltdown of the financial sector. Epstein’s analysis puts the Fed’s actions in the context of the mostly unregulated financial system outside the banks and the troubles in the corporate bond market that were already brewing even before the pandemic hit. Epstein’s prescription is to turn the Fed into more of a public bank, but with greater accountability, transparency, and help for the (non-financial) “real economy” than we saw in the last crisis.
Paul Engler’s feature article depicts the pandemic as a “trigger event” that should show us the need to remake our social, political, and economic landscape through social movements. Reactionary forces will push austerity and a corporate agenda, so activists need to have plans for how to seize the moment and push forward “a counter-agenda rooted in a commitment to democracy and a deep sense of collective empathy.”

When you publish a bimonthly magazine, most articles are in the works for two months or more. But D&S’s perennial topics like inequality (the focus of John Miller’s column in this issue) and the need to move to a green-energy economy (the focus of Arthur MacEwan’s column) are as salient as ever. Débora Nunes’s feature on Brazil’s Movement of People Affected by Dams shows the struggles of activists in a country with a reactionary leadership whose response to the current pandemic will likely be catastrophic.

Our May/June issue will be our Annual Labor Issue, and we have lots of coverage in the works on the ongoing crisis and the labor movement’s response to it. Until then, stay healthy and safe. We will weather the storm.

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