But the dip in municipal incomes didn’t have to be a long-term problem. The federal government can run deficits that local governments can’t, and there was a moment in 2011 when the scale of the stimulus package was debated among technocrats in the Obama administration and things could have gone the other way. But the Obama administration decided that a proposed $1.2 trillion package was too luxurious, so it, on the urging of Larry Summers, went with a package that was roughly half that amount. It’s hard to draw a straight line between this dismal decision and the resulting pain of the last 10 years, but The Wall Street Journal reported in May that state and local budgets had only recovered to their pre-recession levels last fall. The government sent $275 billion to states and cities in 2009, but the money was spent by 2012. The same article finds that evidence from the last recession suggests that every dollar states and cities are forced to cut will ultimately cost society between $1.50 to $2. The cuts are very literally not worth it.
NYCHA, a department that has experienced decades of budget cuts, was a victim of city, state, and federal austerity in the wake of the recession, surely delaying the process of recovery after Hurricane Sandy as well as a whole host of other deferred maintenance. Today, some estimate the city’s budgetary shortfalls for the next couple of years will reach $13.5 billion.
So in regards to Fauci’s hedge, the other question is, whose normal are we talking about? Because some people are already recovered. There are businesses and high-net-worth individuals who have seen their financial lives improve this year, while the poorest people in society aren’t even close to fine. As an International Monetary Fund study indicated this year, pandemics have a nasty tendency to widen wealth inequality, with the effects worsening five years afterward. Already we’ve seen this trend—wages for high earners have rebounded, while low-wage workers are still struggling. The average income for public housing residents in New York is just a little over $25,000, just barely above the poverty line.
Hurricane Sandy lasted only about 48 hours, and yet the residents of the Red Hook Houses are living with the fallout eight years on. Once the surge of the pandemic has receded, how quickly can we make the most vulnerable in society whole? It might be longer than we think. And is a return to 2019—when construction on the Red Hook Houses was just kicking into gear, when there were 34 million families below the poverty line—good enough? If normal was pre-pandemic levels of substandard housing, hunger, and poverty, we might be back there soon enough. However, if what we’re really asking is when we might live better—to have enough, where right now there is only scarcity—we have a long way to go.