The Case for a Permanent Stimulus

As WPA administrator Harry Hopkins wrote in The New Republic in 1937, “We will never do away with mass unemployment until we actively direct the resources of government and industry toward making more employment possible.” A long-term fix requires that unemployment “no longer be regarded as an emergency problem.” There was no reason, he added, why the unemployed “should be asked to live as exiles in their own country, finding courage only in the hope that some day they may be admitted to the magic circle” of private sector employment. “Either a way must be found to admit them to participation in the economy of private enterprise or else they must be given a definite and respectable status as recipients of insurance benefits or as public workers.… No arrangements, necessary and good in their time but labeled ‘temporary’ and ‘emergency’ in order to preserve the unstable nature of our relief measures, will meet this long-time need.”

Ironically for those balking at their potential CBO scores, automatic stabilizers serve to streamline the policymaking process. By setting a floor below which no one living here should fall, they make it so that whether people get vital things like food and shelter isn’t left up to political games. In the current case, that would mean a stimulus package that keeps expanded unemployment benefits in place until jobless rates drop below a certain threshold. But there are more creative options, too. Such a framework, as Nathan Tankus wrote in his newsletter Notes on the Crises, could be used for instituting eviction bans, to ensure people aren’t left homeless in a pandemic when rising unemployment threatens their ability to pay rent. Both of these would help respond to the more uncertain future climate change practically guarantees. But to offer just one example of a more direct and obvious climate-geared automatic stabilizing policy: Agricultural laborers could be paid to stay at home when extreme temperatures make it too dangerous to work outside.

Many millions could be forced to leave their homes and jobs as seas rise. Meanwhile, the core business model of the fossil fuel industry has to be scaled down dramatically. Coal is already in terminal decline. And when the price of oil swings up and down, the sector can—and has, in the past year—shed tens of thousands of workers at a time. Transition programs tend to focus narrowly on what happens to fossil fuel workers themselves. But whole regional economies are bound up in coal, oil, and gas. The most generous retraining programs for roughnecks in West Texas won’t put waitresses or gas station attendants back to work once traffic slows down. Automatic stabilization policies, however, could.

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