Paul Constant is a writer at Civic Ventures, a cofounder of the Seattle Review of Books, and a frequent cohost of the „Pitchfork Economics“ podcast with Nick Hanauer.
He writes that the Trump administration has done more to try and protect Wall Street from coronavirus than Main Street – where ordinary Americans own businesses and work.
He’s in Seattle, one of the hardest-hit regions, and has seen firsthand how businesses are suffering.
He says a middle-out stimulus that prioritized low- and middle-income Americans would pay for itself.
At this relatively early stage in the coronavirus outbreak, one thing should be abundantly clear to everyone: The Trump administration has done more to try to protect Wall Street from the negative effects of COVID-19 than it has to protect Main Street.
I’ve been thinking a lot about what a good national response to the coronavirus outbreak would look like. Of course, we should institute a healthy wealth tax in order to get our public health and scientific research sectors back up to fighting weight. Other nations have provided testing and public health activity that makes America’s response look pathetic in comparison.
But our workers and our entrepreneurs are suffering right now. Everyday Americans can’t make ends meet, and the businesses that they’ve invested their life savings into are going to die without some sort of intervention.
From here on the ground in Seattle - the hardest-hit region in the American coronavirus outbreak so far – I can tell you that Trump’s top-down economic response has it all backwards. My fellow Seattleites aren’t worried about their 401Ks at the moment: they’re worried about their next paychecks, or whether their small businesses can survive another few weeks of social distancing and self-quarantine.
Many Seattleites aren’t leaving the house except for essential supply runs, and as a result, bookstores and movie theaters and restaurants are empty. I’ve seen multiple local entrepreneurs state on social media in the last week that if the region continues to suffer under the shadow of pandemic for much longer, they might go out of business. (Some silver lining: In other parts of the country, workers aren’t sure how they’re going to pay rent if they can’t get to work, but at least Democratic leadership in Washington State recently passed a good paid sick leave law, so that’s less of an issue here.)
In 2008, when a mortgage bubble imperiled America’s largest banks, the federal government came together in a bipartisan effort to prop up the economy with taxpayer money. The stimulus package is largely considered to have curbed the Great Recession, lessening its impact on everyone. But that stimulus money never really trickled down to the average American. Our wages stayed stagnant in the years after the Great Recession, slowing the recovery down by throttling consumer spending across the economic spectrum.
The coronavirus, then, offers us a unique opportunity – a chance to correct one of the biggest economic errors of the last fifteen years. We can restore the economy, improve our communities, and generate wealth for everyone.
It’s time for a middle-out stimulus that prioritizes Main Street over Wall Street.
We know that the American economy is powered by consumer demand. That’s why communities like Seattle which raised their minimum wage have seen their local economies grow: when more people have more money to spend, it’s good for everyone – that money circulates in the community, from business to business, creating more jobs and more wealth for everyone.
If the coronavirus causes a recession, that could create a negative feedback loop: small businesses around the country will close, laying off workers who will then not have any money to spend in their communities, leading to more business closures. Giant banks have proven that they’re unable or unwilling to generate this kind of small-business growth, and giant employers like Boeing have proven that they’re terrible neighbors.
So it’s time for a stimulus that puts individual Americans first, encouraging growth on Main Street that will buoy the entire economy – including Wall Street. The fantastic thing about a middle-out stimulus is that it’s not an either/or proposition; the markets are largely informed by stability and consumer demand, so a stimulus package for low- and middle-income people would naturally help Wall Street stabilize by building economic stability from the ground up.
I don’t have the policy for a middle-out stimulus in my hand right now. It’s something that we’d need to quickly hash out in the next few weeks. But I can tell you that a few good organizations have been working on relief policies that would help soothe the pain of the coronavirus slowdown.
Congress should infuse money into state workers comp and unemployment funds, especially in the hardest hit states, so that these existing systems can provide benefits to all quarantined workers and those forced to work reduced hours (through short-time compensation). The federal government should also immediately increase funding for food stamps, housing, and utilities assistance, and suspend restrictions on access. A temporary reduction in federal payroll taxes would provide a little extra cash for both workers and businesses.
It’s obvious that we also need to offer low-interest loans and easy-to-access grants for struggling small businesses, as well as make loans available for people looking to start a business in the days after the outbreak.
And I’d also include freelance and gig economy workers in that grouping of small business owners. Here in Seattle, for instance, self-employed artists were dealt a huge blow when the coronavirus shut down the Emerald City Comic Con, which was scheduled for this coming weekend. Shoppers at the four-day convention provided up to a third of those artists‘ annual income – and as self-employed businesspeople, they should enjoy at least the same level of security that the oil and shale industry is demanding from the Trump administration.
And here’s where the wails and gasps and moans chime in: „That kind of a stimulus package would cost billions! How on earth are you going to pay for it?“
First of all, I’m not particularly interested in the answer to that question. While Trump and his administration were trying to sell their corporate tax cuts to the American people, they promised that the cuts would pay for themselves. The benefits of the cuts would trickle down to the American people, they promised, in the form of higher wages and better jobs.
None of that happened. The corporate tax cuts didn’t create jobs. They didn’t pay for themselves. Instead, corporations and wealthy Americans kept all the money.
A Main Street Stimulus Package, though, would absolutely pay for itself. With more money in their pockets, people would spend that money in their local communities. Business owners would invest in improvements. Competitors would open businesses to get a share of that increased consumer demand. And profits would trickle up the supply chain to the same corporations who failed to share their tax-cut wealth with us three years ago. Everyone benefits.
But as it happens, I do have an elegant solution for How We’ll Pay for It: Just ask Congress to revoke the Trump tax cuts, and then devote the increased tax revenue to employers of small businesses and entrepreneurs. We could be talking about trillions of dollars in stimulus money, depending on how long the program lasts.
The important thing is that we can’t allow the Trump White House to pull off a second tax scam – or, worse, a wholesale gift of billions in taxpayer dollars to the same people who squandered stimulus money last time. Instead, we need to treat this outbreak as an opportunity – a chance to give the American people a shot to rebuild this country from the ground up. Wall Street had their shot at fixing the economy. Now it’s Main Street’s turn.
VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
HALIFAX – The Nova Scotia government has introduced a bill that would kick-start the province’s offshore wind industry without federal approval.
Natural Resources Minister Tory Rushton says amendments within a new omnibus bill introduced today will help ensure Nova Scotia meets its goal of launching a first call for offshore wind bids next year.
The province wants to offer project licences by 2030 to develop a total of five gigawatts of power from offshore wind.
Rushton says normally the province would wait for the federal government to adopt legislation establishing a wind industry off Canada’s East Coast, but that process has been “progressing slowly.”
Federal legislation that would enable the development of offshore wind farms in Nova Scotia and Newfoundland and Labrador has passed through the first and second reading in the Senate, and is currently under consideration in committee.
Rushton says the Nova Scotia bill mirrors the federal legislation and would prevent the province’s offshore wind industry from being held up in Ottawa.
This report by The Canadian Press was first published Sept. 10, 2024.
