By MATT STOLLER<\/p>\n
At the end of February, President Donald Trump dismissed concerns about Covid-19. As he put it, the virus is \u201cunder control\u201d in the US and the \u201cwhole situation will start working out.\u201d But according to Politico, Trump is privately voicing worries that the impact of the virus will undermine his chances of reelection. His panicked actions of late \u2014 including preventing an American from being treated in Alabama, at the request of a fearful Sen. Richard Shelby \u2014c onfirm that this virus is a political event of the first magnitude. While few in Washington have internalized it, the coronavirus is the biggest story in the world and is soon going to smash into our electoral politics in unpredictable ways.<\/p>\n
As Jon Stokes notes, we will, in all likelihood, be locking down travel in some areas of the U.S. for several weeks, as they did in China. People may be advised against gathering in large groups. It\u2019s not clear what any of this will mean for campaigning or primary voting, whether most of us will vote by mail or have our votes delayed.<\/p>\n
Moreover, the coronavirus is going to introduce economic conditions with which few people in modern America are familiar: the prospect of shortages. After 25 years of offshoring and consolidation, we now rely on overseas production for just about everything. Now in the wake of the coronavirus, China has shut down much of its production; South Korea and Italy will shut down as well. Once the final imports from these countries have worked their way through the supply chains and hit our shores, it could be a while before we get more. This coronavirus will reveal, in other words, a crisis of production \u2014 and one that\u2019s coming just in time for a presidential election.<\/p>\n
We\u2019ve been through something like this once before. My book \u201cGoliath\u201d describes the 1932 campaign for president, one that was carried out at the depths of the Great Depression and during an era when our productive capacity was shut down. Though the crisis at that time was caused by a banking collapse, not a pandemic, the political backdrop was analogous. Eighty-eight years ago, \u201cold order\u201d politicians, as they were known, proved unwilling \u2014 even in the face of crisis \u2014 to have the government apply its power toward the broader public benefit. Their recalcitrance prefigured, in certain ways, the reflexively libertarian thinking of today.<\/p>\n
A toxic ideology invited disaster in 1932, as policymakers did little in response to the collapse of thousands of banks and businesses. At the depth of that depression, cotton hit its lowest price in 200 years and steel production fell to 15% of capacity. The situation became so desperate that in just one city, Toledo, Ohio, 60,000 of the 300,000 residents stood in bread lines every day. Children were competing with rats for food. And thousands were dying of dysentery. The politics too turned desperate, with one labor leader telling Congress that \u201cif the Congress of the United States and this administration do not do something to meet this situation adequately, next winter it will not be a cry to save the hungry, but it will be a cry to save the government.\u201d<\/p>\n
And yet, the old order had no answers. Congress held hearings, but businessmen, academics, and bankers proffered only belt-tightening. Within the Republican establishment, President Herbert Hoover worked 18-hour days, exhorting confidence while refusing to take even basic steps such as having the government guarantee bank deposits. Instead, his administration\u2019s army attacked hungry protesters in Washington, D.C., a move that prompted an angry Republican congressman, Fiorello La Guardia of New York, to remind the president: \u201cSoup is cheaper than tear gas bombs.\u201d<\/p>\n
Meanwhile on the Democratic side, conservatives and progressives in the party were locked in a bitter battle for the nomination. Many Democrats agreed with Hoover. Maryland governor and presidential candidate Albert Ritchie, for instance, argued that we should rely \u201cless on politics, less on laws, less on government.\u201d Another candidate, Speaker of the House John Nance Garner, claimed the greatest threat was the \u201ctendency toward socialism and communism\u201d and pledged a massive cut in government spending, as well as a sales tax increase. Others turned to extreme racism and xenophobia. Only Franklin Delano Roosevelt, who went on to win a contested convention, campaigned on aggressive government involvement in the economy \u2014 or as he put it, a \u201cworkable program of reconstruction,\u201d which later became the New Deal.<\/p>\n
That era\u2019s political desperation is alien to us for a few reasons. First off, we haven\u2019t faced shortages of such magnitude for a very long time. More importantly, we have for decades lived under a political framework known as affluence, a term popularized by economist John Kenneth Galbraith in the 1950s. As an affluent society, America automatically produces a surfeit of jobs and wealth, and the problem is solely one of distributing the bounty.<\/p>\n
Under the siren song of affluence, we began offshoring critical production capacity in the 1960s for geopolitical reasons. In 1971, economist Nicholas Kaldor noted that American financial policies were turning \u201ca nation of creative producers into a community of rentiers increasingly living on others, seeking gratification in ever more useless consumption, with all the debilitating effects of the bread and circuses of imperial Rome.\u201d Still, Bill Clinton and George Bush accelerated this trend throughout the 1990s and 2000s.<\/p>\n
Affluence politics is not the politics of being wealthy, though, but rather the politics of not paying attention to what creates wealth in the first place. That is to say, it\u2019s the politics of ignoring our ability to make and distribute the things people need. With the banking collapse in 2008, the election of Trump in 2016 and his mourning of empty factories, and with Bernie Sanders dominating the early primaries, that era may at last be passing. A pandemic disease outbreak would only hasten this progression and force us back into the politics of production.<\/p>\n
With potential shortages of goods, and restrictions on people\u2019s movement, both parties are heading into unknown territory. It is likely Democrats will use this opportunity to further their case for Medicare for All. Pandemic surveillance and medical bureaucracies focused on billing do not mix well \u2014 stories about astronomical out-of-pocket costs for Covid-19 testing are already circulating. Republicans are likely to take a more xenophobic approach, emphasizing restrictions on foreigners and infected Americans. When it comes to managing shortages, however, both parties are split, just as they were in 1932, between their Wall Street factions that assume affluence and the less mature populist factions that seek assertive public power. The Democratic Party primaries certainly echo those of the Great Depression, with candidates from Bernie Sanders to Amy Klobuchar trying to wrap themselves in FDR\u2019s mantle.<\/p>\n