top of page

Opinion and Analysis

Could the COVID-19 Depression Help Save Us?

The pandemic’s disruption of our lives and businesses may be the best opportunity in generations to rebuild a fairer society—but only if we focus on the right goal and the right tactics.

By November 1932, the American people had had enough.


Following a first, dramatic tumble over the edge with the stock market crash of October 1929, the United States had plummeted headlong into an economic abyss deeper than anyone imagined possible. Congress and the Hoover administration tried to grapple with the situation, concentrating largely, in accord with the reigning fiscal wisdom of the time, on strengthening the major players in business and finance. Result? Not good: the Great Depression persisted, relentlessly, in earning its name.


Three years of escalating chaos and suffering—bank failures, food riots, loss of jobs, homes, and farms—made it bitterly apparent to voters that top-down, free-market fixes simply weren’t going to work. Galvanized by their fright and anger, the public opted for wholesale change: in the fall 1932 elections, Franklin Delano Roosevelt displaced Herbert Hoover as president; the Democratic party took control of the Senate and expanded its majority in the House of Representatives.


Sound familiar? It should. In 2020, we are likewise faced with economic disaster—tripped up on this occasion by a different cause, but quite plausibly staggering toward a similar chasm. In the autumn, we too have an electoral opportunity coming, analogous to the one in 1932. It’s imperative that we use it in the same way, because we have, over the last half-century, been herded back into the same trap.


Progress and Backlash

The decisive mandate FDR received at the polls enabled his far-reaching response to the Depression: the New Deal. New Deal programs directly created millions of desperately needed jobs and saved farmers and homeowners from foreclosures. They invested heavily in the nation’s infrastructure, resulting in a huge trove of dams, bridges, park improvements, courthouses, post offices, and other facilities that have continued to serve us since.


The fundamental consensus that underlay those programs—that government had a legitimate, important role to play in providing public works and public services, was charged with maintaining an equitable playing field for the conduct of business, and had a responsibility for the basic welfare of its citizens—lasted through the 1960s, even as those same decades after World War II saw the greatest expansion of general prosperity in our nation’s history. Industry thrived, inequality fell, and a much broader swath of the population than ever before achieved a comfortable lifestyle.


Who could be unhappy with that?


Well, some people could. Many right-wing conservatives never reconciled themselves to what had happened during the Roosevelt years, remaining committed to positions that you’ll hear echoed practically unchanged on Fox News today: anti-tax, against the regulation of business, emphatically for “pure” capitalism and the sacred primacy of the individual, deeply suspicious of the government’s role in—in almost anything, actually. These intransigent voices gained growing leverage inside the Republican Party. And, particularly following the conservative ascendency that arrived with Ronald Reagan in 1980, their fight took on aspects of a crusade to reverse everything the New Deal stood for.


The Crux of the Problem

Through constant repetition, two especially damaging assumptions have gradually been elevated to the status of divine law. One is that the unfettered pursuit of the biggest profit will always guide free markets to the optimal outcome. The second is that goods and services produced by private companies for private consumption are a boon, while goods and services produced by government for public use are, at best, a necessary evil.


As a result, we’ve been sucked deeper and deeper into the kind of world where corporations can enjoy free speech rights but are deemed largely exempt from civic responsibilities. Business schools turn out leaders who can undertake actions like plant closures, the offshoring of jobs, union busting, and predatory pricing of pharmaceuticals guilt-free, in service of the greater good of the firm. They are perfectly comfortable paying themselves 200 or more times what their company’s average worker takes home, and can even feel smug about their superior virtue as maximizers of efficiency and value.


Is it any surprise, then, that health and welfare programs, organized labor, graduated tax rates, concerns about pollution or sustainability, and business regulation of all kinds—much of our human-centered heritage, that is, from former decades when the New Deal’s influence remained strong—have come increasingly under attack as impediments to achieving the highest returns? We’re back, in short, to Herbert Hoover’s America. The accumulating weight of the powerful and privileged, and their cheerleader-servants in politics and the media, is crushing the prospects of too many in our society.


Economist Thomas Piketty’s Capital in the Twenty-First Century proposes that extreme inequality of wealth has been humanity’s common condition in the past and is likely to be so in the future as well. In his view, the mid-twentieth-century interlude of greater universal prosperity was a fluke, and we are now tending back to the norm. This is not an outcome we can afford to risk.


Shared Pain Makes Allies

Casting a ballot on November 3 to chuck Donald J. Trump headfirst out of the White House is not sufficient. Ensuring progressive majorities in both the House and the Senate is only part of what’s required. The goal must be to install candidates who will push through the kinds of reform policies that haven’t been seen for nearly 90 years. Similar to, but more sweeping than, reforms that were fleetingly considered and instantly quashed in the aftermath of 2008’s financial meltdown.


We can use the widespread angst and frustration our country is experiencing in the wake of COVID-19 to regain ground in the tug-of-war between overclass greed and the common good. But only if we band together, concerned Democrats and Republicans alike, will we assemble a team muscular enough to hold our own in the contest.


Donald Trump’s MAGA-hat-wearing partisans may see themselves as the antithesis of urban communities of color or Millennial “socialist” supporters of the Squad. In dollars-and-cents terms, however, these disparate groups are equally harmed by our society’s skewed distribution of blessings. It would be wise, therefore, not to focus solely on ideological differences; if you’re on the losing end of the economic scale, voting your class resentments will get you much more than voting your cultural resentments.


The fight for New Deal 2.0 means reaching out to voters on left and right with direct, unpatronizing messages that make clear the ways in which an active government can help. Historian Lizabeth Cohen may be correct when she suggests, in a recent piece in The Atlantic, that we “cannot simply copy the New Deal’s programs and apply them to our contemporary challenges.” Yet much of what was achieved in the 1930s is just as relevant—and just as achingly needed—now.


We still have plenty of highways, bridges, dams, and parks in urgent want of improvement, and we have plenty of 21st-century projects that could be undertaken with federally supplied funding and workers: developing renewable energy, providing public Internet service and WiFi (on the model of places like Chattanooga), transferring housing out of flood zones, moving new enterprises into areas that older industries have abandoned, bringing critical manufacturing back to the U.S., implementing universal healthcare, and the like. A plan of action combining aspects of the Roosevelt-era agencies with last year’s Green New Deal, you might say.


Yes, the notion that progress can only be made via the catalyst of disaster is a little depressing. Can we merely stand by, though, as it becomes increasingly evident who will benefit most from Washington’s botched responses to the coronavirus? Do you seriously think the invisible hand is best suited to carry you safely through a post-COVID depression?


Since disaster is what we’ve got, we’d better make it really count. A new New Deal is waiting for us to start it. Get out there, unite, and fight the right fight!

Anchor 1
bottom of page