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Our Never-Ending Recession

What does it mean to be staring down economic collapse for the workers still living in the shadow of the Great Recession?

Mario Tama/Getty Images

For the last four decades, “the economy” has been less a measure of any kind of shared prosperity than a weathervane for the investment portfolios of the 1 percent. That was never clearer than during the so-called recovery period after the Great Recession, in which the markets bounded back to life with generous assistance from the government while high unemployment rates, home foreclosures, and stagnant wages dogged most workers for years.

Now, as dozens of countries struggle to contain the spread of the coronavirus, economists are predicting a new global recession. To the disappointment of investors and the president, the onset of the pandemic stamped out what was previously the longest-running bull market in American history. But it’s worth recalling that the same record-breaking market didn’t deliver much to the majority of Americans over the last 11 or so years. Most crucially, the bulk of economic gains during the Great Recession recovery went to the rich: According to one 2016 report from the Economic Policy Institute, the top 1 percent captured over 85 percent of total income growth between 2009 and 2013. In fact, it wasn’t until 2017—a full 10 years after the official start of the recession and about two before the first case of the coronavirus was reported—that median household income finally bounced back to pre-recession levels. And even that just meant a return to real wages that had barely budged for decades.

This is to say that in many ways, the damage of the last recession is still so fresh that it often feels like it never ended at all. At this moment, student debt totals over $1.7 trillion, economic inequality is still at a record high, and “deaths of despair” among the working class have soared; though those crises began well before the Great Recession, they were exacerbated in its rot. Even before the coronavirus crash, the economy had essentially ceased to function for most American households, and that fact—a working class that is more or less frozen in time, with workers of color disproportionately carrying the burden—is where we should start as we prepare to weather the next major downturn.

The conditions that may trigger a coming recession are, of course, quite different from those that gave rise to the last, but in the unique crisis that lies ahead, there is also an opportunity to avoid the missteps of the last recession and send austerity politics to the grave where they belong. As the spread of the pandemic accelerates by the day, even libertarians have begrudgingly accepted that heavy-handed government intervention will be necessary, and deficit hawks’ ongoing paroxysms over federal spending have all but evaporated. The government response to the coronavirus disaster—so far a mostly bipartisan effort to craft a makeshift emergency social safety net—might also serve as the groundwork for developing long-term public resources that last beyond the next recession.

Even as his presidential campaign has faltered, Bernie Sanders’s coronavirus relief proposal offers one promising model for getting the recession recovery right. Prior to the coronavirus relief bill signed by Trump on Wednesday, Sanders had proposed an even larger $2 trillion relief package that included an immediate Medicare expansion to cover all health costs, and monthly payments of $2,000 to every adult during the duration of the crisis. According to the Roosevelt Institute’s Mike Konczal, those payments are exactly the type of support that could stave off a recession, particularly if they were set to automatically renew for as long as an economic slump continued. “The most important lesson from the Great Recession,” Konczal wrote, “is that the serious risk is in doing too little, not in doing too much.”

If you further study Sanders’s coronavirus plan, you begin to notice that many of its planks fit neatly into the senator’s longtime talking points: Waive student loan payments, prevent price-gouging by pharmaceutical companies, bail out working people and not corporations. To some, that familiarity was an annoyance. “There was something strained and strange about Sanders’s repeated pivots from the pandemic to income inequality, from the pandemic to corrupt pharmaceutical executives, from the pandemic to how many millionaires and billionaires have contributed to Biden’s campaign,” The New York Times’ Frank Bruni wrote after last week’s debate, in which Sanders and Biden sparred over coronavirus relief. But it wasn’t strange, really, if you believe, as Sanders does, that one major reason why the virus poses such a threat to the United States is because of our deeply unequal economy and patchwork public sector.

The Biden approach to the pandemic and the subsequent recession, on the other hand, seems to be to ramp up social services as a one-time emergency response but forgo the type of fundamental reworking of the economy that might mitigate such a disaster in the future. “It has nothing to do with Medicare for All,” he said of the coronavirus, which I suppose is true in the sense that a single-payer system wouldn’t have prevented the outbreak—but it could have spared early victims large bills, incentivized the uninsured to seek treatment faster, and prevented anyone from falling into medical debt should their particular flulike symptoms not qualify for coronavirus-specific fee-waiving.

We also have an idea of what the Biden response to a future recession might look like because he served in the executive branch for the last one. While the Obama administration’s 2009 recession stimulus did provide some safety-net provisions that softened the worst of the recession—including Medicaid and food stamp expansions—it was also defined by post-welfare reform measures like tax credits, which bypass the most disadvantaged and do little to combat inequality. “Instead of pushing for an aggressive stimulus to rapidly expand employment and long-term structural reforms in how the economy worked,” Farhad Manjoo wrote in 2019, “Obama and his team responded to the recession with a set of smaller emergency measures designed to fix the immediate collapse of financial markets.”

As unprecedented as a coronavirus-induced economic recession may be, the challenge ahead, then, won’t be a dearth of policy proposals, limited funding, or lack of a popular mandate, but rather to finally close the door on the stunted politics of austerity from both Republicans and Democrats. We can’t afford to forget the mistakes of the last recession; after all, we never really left its shadow.