What the recession tells us about economic fragility
Within hours of his swearing in, U.S. President Joe Biden got to work introducing his vision for the U.S. With several strokes of a pen, the president reversed Trump-era policies such as the construction of a border wall and the “Muslim Ban.” President Biden also began introducing his own agenda on immigration, climate change, health care and racial justice.
Despite being an efficient method for enacting a president’s policies, executive orders can not be President Biden’s only instrument for change – especially when it comes to the financial crisis we find ourselves facing.
The 46th president publicly stated that he wants to pursue a $1.9 trillion economic rescue package that includes greater funding for vaccinations, another round of stimulus checks and a host of other investments. This type of government stimulus is needed to help improve American lives, save American jobs and help our economy gain momentum. However, the necessity of such spending is indicative of a deeper issue that America is unwilling to acknowledge.
The American market needs reforming. In my lifetime alone, I have seen two economic recessions. One was caused by unregulated Wall Street greed, risk taking and predatory loans, and the other by a global pandemic the world was clearly unprepared for. Based on what I have seen in my 18 years in America, I would be led to believe that this type of economic volatility is natural. Recessions happen, right?
As I was reading former U.S. President Barack Obama’s “A Promised Land” over winter break, I found myself constantly reflecting on his handling of the 2008 financial crisis. As Obama writes about his economic team’s decision making and thought process while they were stewarding the nation’s economy, I found myself agreeing with the policies they pursued.
I believe that the Troubled Asset Relief Program (TARP), and more importantly the Recovery Act, were policies that were correct short-to medium-term solutions. They saved people’s jobs, homes and led the economy to 75 straight months of job growth. However, they did require massive government spending. As I was reading, I kept thinking to myself – “Is this sustainable?” I always came to the same answer – no.
Today, we find ourselves at a similar inflection point. While thousands die per day from COVID-19, the billionaires are thriving and the average American is barely surviving. President Biden and his team believe the nation needs more massive government spending, and given our current system and circumstances, they are correct. But, as COVID-19, it also reinforces what many people felt during the financial crisis of 2008; something about the American economy is not right.
No system, no economic modality that requires massive stimulus and bailouts twice in two decades is without need of improvement. We need a change. Wall Street needs to be regulated. Those at the top should not be allowed to watch their wealth exponentially grow as the overall economy suffers. The fact that the stock market is at its highest point ever is further evidence that the stock market is not an indicator of the economy as a whole.
Furthermore, the pandemic is proof that our social safety nets need to be improved. Millions found themselves uninsured and without income simply because of a pandemic. This cannot happen. Nobody should be devoid of health care, whether it be public or private. Nobody should be a productive member of society one day, and then worry about how they will feed their children the next, out of no fault of their own.
Now, I am aware my rhetoric may sound bitter or radical, but it is the opposite. I am more frustrated that America is less than what it can be. I am not advocating for socialism, but a reformed version of capitalism–one where those at the top don’t receive bailouts, those at the bottom don’t cover the nation’s losses and the economy works in a way that creates prosperity for everyone.
In addition, the social safety nets that we have in our society need to be strengthened. Social Security will no longer be viable without reform, the Affordable Care Act needs improving and we need to move towards an economy that puts money into the hands of the middle and lower class of society and doesn’t have tax breaks for the 1%–because history has taught us trickle-down economics do not work.
I look forward to watching what the Biden administration does. I believe their shift towards renewable energy is just one example of how they are changing the economy for the better. I believe their pursuit of a return to bipartisan politics is the correct strategy to shift Washington and the nation away from our increasing polarity.
I believe President Biden will be able to remind Americans what Obama loved to say – in the end, the presidency is still a job, and a job in which you are supposed to work for the benefit of the majority of your constituents, not the few.
