Bringing the Economy Back to Life

Apr 17, 2020 · 137 comments
The next administration, even if Democratic, will not have enough time to fix the severe damage from this pandemic. Four years is not enough time to do what is needed. The American middle class is rightly fed up and wants to see and feel progress now, not tomorrow. What happens if, by 2024, some good things are happening and things are getting better but not good enough and not fast enough? Will Americans do what they so often do and vote Republican again out of frustration? That would be a huge mistake and would only set us back. It took 40 years to ruin the middle class and it will take more than 4 years to bring it back. I hope the Democrats are smart enough to make the case that they need a generation to fix this mess, not one term.
Sara (NYC)
@CJ My fear is that the next centrist Democratic administration will make the case that they need a generation, then use that as an excuse to fiddle around the edges and avoid the transformative changes needed, like the last two did. So I guess I disagree. Lessons from the Obama administration indicate that if Democrats can take both houses of Congress and the White House in November, they better assume they will only have the chance to pass legislation for 2 years before gridlock descends. And they better make those 2 years count like they've never counted before. Of course nothing Democratic leadership has said indicates they feel that way.
Nathan Hansard (Buchanan VA)
@Sara Though I share your fears, I think there is real reason for hope. Not from the Party of Trump mind you, which is even more rabid and insane than ever, but rather from the Democrats. The arc of thought there has moved leftward a lot in the last several years, and this is likely to accelerate this...
USNA73 (CV 67)
We could pay for much of what you describe if the Fed did not commit to bail out the speculators of Wall Street and PE yet again. I agree with your ideas. The American taxpayer needs to stop enduring propping up a system that delivers socialism for the rich and capitalism for the rest of us. The proper playbook was already written by FDR, Eisenhower and JFK. It rests on higher taxes on the wealthy and shared sacrifice. Not the magic of investment bankers.
Joseph Michael (Miami)
@USNA73 "Not the magic of investment bankers". Let's qualify "investment bankers"....maybe "unscrupulous, greedy" ones, or similar. Mr. Rubin, a thoughtful, caring expert on the economy, is an investment banker, and a former Chairman of Goldman Sachs.
SP (Manhattan)
@USNA73 JFK cut taxes on the wealthy and increased deductions.
Andy Maxwell (Woodstock)
@SP Yeah he lowered it to 70%
Mister Ed (Maine)
This is a very measured and practical response from an experienced financial leader that could be implemented quickly with the assistance of capable Republican leadership. Unfortunately "capable Republican leadership" and oxymoron in this day and age when only incompetent ideologues can get elected as Republicans. Rubin's proposals, however, are only a start on the road to recovery. We have to kill off the current version of virulent, winner-take-all capitalism and replace it with an economic system and climate like we had in the 1950s and 60s when CEOs earned only 20-30 times the compensation of the lowest wage earners rather than the gazzillions afforded by compromised boards of directors of today. It took this coronavirus and massive deaths to show that the current version of American capitalism was not sustainable.
Democracy / Plutocracy (USA)
Won't happen until the Democrats take Congress and the White House. Even then, the Roberts SCOTUS will resist.
heyomania (pa)
A Vacancy Vacant apartments, how lonely they stand - From one single room you can hope to expand, Trade up in space and freshen your outlook, Take full advantage when he went kaput, Last he departed he was carried right through His front door for keeps, his keys left for you; Good fortune for some, for other the pits – You’ve got a new space; don’t think it’s the Ritz.
James (St. Paul, MN.)
Rubin has a lot of advice for folks he calls "policymakers". He hopes to see experts in many fields come together to give our nation the best possible advice about how to heal and grow stronger. Who, I wonder, does he think will lead this process and collect the best minds in America to guide us? We can be sure it is not the lying, cheating, proudly ignorant grifters now occupying key leadership roles in our nation. One wonders who will rise to the occasion.
Kristin (Houston)
So the upshot of all these "Restart the economic engine articles" are "When can the 99% start making money for the 1% again? We need workers to go back to slaving away for us to boost our stock prices."
Wordsworth from Wadsworth (Mesa, Arizona)
"sound decision-making?" Bob, you were the one who advocated for a repeal of Glass-Steagall which passed in 1933 (at great benefit for yourself). We now have returned to 1933 economic conditions. Why should we trust you? Mr. Rubin, you give the Democratic Party a bad name. Exeunt, quickly.
Rex Nemorensis (Los Angeles)
I sincerely hope that the NYT will eventually stop running these endless "Because of (insert transient crisis X here) it is obviously necessary to implement the Democratic Party's wish last of the last 50+ years..." pieces. I am middle aged, and I've now read these articles for 25+ years after several recessions, terrorist attacks, etc. All that ever really changes is the date and the name of the author. I'm bored of reading them and poor Mitch McConnell must be getting tired of having to ignore yet another empty set of DOA policy proposals.
Louise (USA)
Small Business America is America... More individuals are employed by small business than big corporations... Main Street/Neighborhood Businesses die, we die...
4AverageJoe (USA, flyover)
cronyism, where private contracts go to buddies, where red states inexplicably get more FEMA equipment than blue states, where $770/dy of pay to private institutions for detaining illegal immigrants-- yeah, Come on Joe Biden! bring us some sanity!
JUHallCLU (San Francisco Bay Area, CA)
Unfortunately, Mr. Rubin is speaking to the deaf, dumb, and blind in this Administration and U.S. Senate. They've already compounded harms by their ineptitude. Look who we're having to rely on for leadership: Mnuchin, Trump, McConnell. A recipe for disaster.
Constance (Ft Worth, Texas)
And that said - America will always be the reserve currency of the world so we can print all the dollars we want and NEVER have a "Currency Crisis." “At some point, our debt will become the crisis that can’t be fixed with money,” ~Andrew Ross Sorkin Sorkin never ran the Treasury Department or Goldman Sachs so he is forgiven for making stupid statements like that one." Out of the mouth of babes and sucklings hast thou ordained strength …" If you are a politician or run the Treasury or Goldman Sachs, all problems are short term problems - the next election or the next quarter. The lowly financial reporter has the luxury of thinking beyond short term consequences. Cornell? Eco 101? Deal Book? How dare you make a statement that our gnomes avoid. "...the crisis that can't be fixed with money."
George (Florida)
Basically, undoing all the stupid stuff Trump has done and income to the economy!
Nathan Hansard (Buchanan VA)
"There will be ample room to increase revenues, on a highly progressive basis, for example, by increasing corporate taxes, restoring individual rates, repealing pass-through preferences and imposing a financial transactions tax. We should also pursue universal health care coverage, preferably through a public option, while at the same time reducing our system’s overall costs, which far exceed other developed economies’." ^^^^^^ This!
Charles Becker (Perplexed)
Speaking as a conservative Republican, this enormous tragedy is an opportunity to address the corrosive level of income inequality in this country. As others have pointed out, a necessary measure is to subsidize wages of displaced workers and keep small businesses afloat. The essential corollary to that is to substantially raise taxes on high income earners, estates over $X million, and corporate profits. Three things have to occur for this to be a possibility, all of them highly unlikely. First, this needs to be clean legislation. Using this emergency to push through unrelated legislation will sink it. Nancy Pelosi has shown no interest, ability, or willingness to legislate cleanly. Second, this needs to be pitched from the top, including the rich ... people like Gates, Buffet, and Bloomberg have to go public in supporting this and call out their fellow plutocrats who resist. Another part of that pitch has to be that EVERYONE, the rich AND the poor, have to do their part. Third, the for-profit media has to stop rabble-rousing and support those first two things, even if it means crossing their loyal fanbase. But yeah, this could be an opportunity for all of us to learn new and better civic behaviors. We could reclaim the good parts of the nation we once were. But we won't. Too much politics.
Pelasgus (Earth)
@Kirk Cornwell wrote earlier, ‘...and now we will see the result of forever low interest rates and a parabolic money supply,“ and asked a question of Robert Rubin, who I am not. The purpose of artificially low interest rates is to shift the value of the savings of the many into the hands of the few. The better educated of the few know that the process will destroy American supremacy eventually; but they plan to replace the current world order, principally by socialising the classes beneath them in countries of any importance, while they run free.
Person (Wisconsin)
I'll accept it if Biden brings Rubin back in to the circle if he's positioned below Jared Bernstein. Rubin is good at this stuff. He's probably going to be essential in maintaining a stable economy. But I want Jared to keep him in line. Rubin has good advice here. I've had large disagreements in retrospect to his decisions in the past, so I know he needs a superior to prevent him from ignoring certain progressive concerns in the long run. But all in all, yea, Biden should bring him back in to a Democratic economic advisory role.
Pelasgus (Earth)
Robert Rubin is doing useful work in proposing higher taxes for corporations. The money shower in progress, once it is spent it must be accumulating somewhere. It must drained off by taxation to maintain a semblance of a balanced budget. It is increasingly obvious that the Democrats will propose a New Deal at this election, which will not be a leftward move for themselves so much as a movement in the political landscape itself. The political centre will move to the left by its utterance. If President Trump and his colleagues fail to recognise a shift in the landscape, their platform will rest on a blasted heath.
Michael Cohen (Boston ma)
Large scale testing is a bedrock of doing anything. That being said the current test has a sensitivity of 70%, In my view , testing with a very inaccurate test is worse than no test. This needs to be addressed immediately.
R Hinkley (Berry, NSW Australia)
Reopen the economy or not? So far, most look at this question like former Secretary Rubin—risking the economy continuing to disintegrate versus risking the health of every American. There is logic in this, but maybe not wisdom. What should be determinative is a matter of priorities? For the past forty years there has been no question of the country’s priorities. The economy has always came first. The Covid-19 pandemic now gives the country a chance to re-evaluate whether the economy should at all times be America’s top priority. Or, can worry about the economy be set aside for a short time to address a more pressing problem? Why take the risk? How about if, for six months or as long as it takes to defeat the pandemic, we resolved to stop worrying about economic growth and, instead, resolve that America’s number one priority be the elimination of the Covid-19 threat? Continuing the lockdown and limiting social interaction is the best way the scientists know to curb the spread of the virus. It will require massive amounts of aid to be sent to individuals to offset their lost wages, but this is a national emergency and eliminating Covid-19 earlier rather than later will decrease the overall cost and allow the government’s investment to be repaid quicker when the economy comes back on line safely. Maybe it’s time for Americans to stand and solve a pressing problem together by devoting their full attention to it. Make America Well Again, then worry about the economy.
michel ridgeway (cassville pa)
All the big shots have this stratospheric view but how are families going to be able to return to work without schools and child care? No responsible parent is going to leave their kids without care.
Kirk Cornwell (Delmar, NY)
...and now we will see the result of forever low interest rates and a parabolic money supply. What does Rubin (who understands money more than most of us) really think about that?
Mr. Rubin, essay give us a some glimpse , how complex and heavy the rescue operation is? I believe , even todays GOP has minds to come together and devise a recue plan. However, Our hopes perishes when it comes the issue President Trump, a.k.a Longest national nightmare. There is nothing there, a void, intellectually an politically is an abysmal void. Hopes perishes at Trump.
Michael Gilbert (Charleston, SC)
It used to be a choice between guns or butter, now it's a choice between lives or money. And it's clear what the Republican choice is - the party of "life" is really only interested in money.
Pecus (NY)
Mr. Neoliberal throwing us a bone. My favorite line: " And the Federal Reserve is offering liquidity to various parts of the economy." Yep, he and his buddies get the lion's share of this bailout as well as of the last one. Equities before equality is their motto, after all. He's a funny guy.
TB (New York)
Hey, NY Times: Please stop asking the arsonists how to put out the fire.
Harold (Bellevue WA)
On every point, Rubin gets it right. The "timing" issue is perhaps the most delicate because if the recovery begins too soon both lives are lost and the economy is damaged more by the pandemic resurgence than if the recovery were delayed. An academic economist would seek the optimum point in time. For example, Nobel Laureate Harry Markowitz identified "the efficient frontier" which gives the optimum strategy investing strategy for balancing risk and reward. That same strategy can be applied in theory to time the restart to balance the risk of pandemic against the reward for rebuilding the economy successfully. In practice, this is difficult to do, and even more difficult for the pandemic/economy scenario than for the investing scenario. I remember Markowitz responding to a query on how he personally invests. Does he use his efficient frontier? No, he does not. The optimum strategy depends on data that are not available. And there are easier alternatives that he actually uses. The lesson learned is that for the timing of the economy restart, available data may not yield accurate predictions of risks of further pandemic spread. It is better to err by opening too late than too soon. If the economy opens too soon, the ensuing pandemic will kill more people and further damage the economy. If the economy opens too late, it suffers additional loss that can be made up, but people's lives are saved in the meantime.
RVB (Chicago, IL)
Not to mention his repeal of Glass Steagall and knowingly understating the sub prime exposure of Citi leading up to the 08 crash.
GregAbdul (Miami Gardens, Fl)
I respect Mr. Rubin. But he and everyone is not paying attention to which way this train is headed. McConnell and Trump are not approving any more stimulus plans. Trump is telling everyone reopen as quickly as possible and his leverage will be withholding any more stimulus payments. We all still need to begin planning for what will happen when some conservative states with governors beholding to Trump re-open, while places like California and New York stay closed. Paul Krugman said it best; they are out to starve the beast. The flattening of the infection curve politically means we are back to normal and normal for them is they really don't care when people in blue states or black or brown people die.
APM from PDX (Portland, OR)
Committing to do some IN THE FUTURE is what politicians do. Enough with money given to intermediate institutions. Give the money directly to citizens ($2000/month) then when they file next year taxes, they repay all-to-none depending on their income. This covers all groups: employees, unemployed, gig workers, part timers, disabled, retired, with or without health benefits. We need more money in play now. Not the empty commitment to the after-election future. Also, infrastructure spending would be excellent . . .oh! I forgot. . .there are republicans involved. We’re screwed!
Dennis (Oregon)
Lots of luck getting Congress, with Mitch McConnell in the catbird seat, to approve anything except free money to corporations, billionaires, or "small business." This latter category I suspect the NYT or WP will ultimately discover includes many Trump cronies, if not the first family itself.
Gary Cohen (Great Neck, NY)
From the GS man that dismantled Dood-Frank which directly contributed to 2008 meltdown. This is not the type of expert we need to read.
lzolatrov (Mass)
It's breathtaking that Robert E. Rubin would write an Op-Ed in these times, and that the NYTimes would publish it, on the same online page as the article about how the virus is highlighting the gross inequalities in our society. So many of those inequalities were pushed through under Bill Clinton with Robert E. Rubin as Treas. Sec. He is the good fellow who pushed to get rid of the Glass Stegall Act. Shouldn't that be part of his bio at the end of the piece? Then he led Barack Obama's transition team and helped him choose all the revolving door Wall Street bankers (like himself) to run that administration. There are clear ways to fix what's wrong with America and even in this moment we could follow Germany with their "Kurzarbeit" program which pays 60% of a workers salary and the workers keep their jobs. 750,000 companies in Germany have applied for this program protecting millions of German jobs. It's not rocket science, we could follow the German's policies. But that would mean real change and might threaten the enormous wealth of people like him. This will not end well.
Johnny Comelately (San Diego)
If no one in power is listening, does it matter? How do we get the fools out of office?
Rick W (Los Altos)
We know the answer: #voteBlueNoMatterWho
Jay (NYC)
Why are investment firms made eligible to receive "employee protection money" from the recent stimulus package??
Aluetian (Contemplation)
Let me throw this out. What if COVID19 is actually follows the typical path of a seasonal flu? If true, that would mean that what we are seeing now is only a fraction of the impact it would have during its prime season. In 1918, the first wave came during the summer and by fall (flu season) it had mutated into a monstrous version of its prior self. Since we simply can not trust the current occupant of the WH, I'm hoping our Governors will proceed with great caution.
ivanogre (S.F. CA)
You are talking about science, decency and common-sense. That's not going to get Trump back in the White House. He needs to pump up his base and keep them pumped up from here to Election Day. What better way to do that than to foment a rebellion by his followers against the 'egghead elites'? The political math on this is simple. Trump's Governors throw open the doors and set the citizens free while Trump smiles down benevolently as they resume their lives. People in other states will see this and the Tragedy of the Commons will unfold. 'Resistors' in other states will rise up, demanding their 'freedom' too. Trump will get lots of love from the plutocrats for this, and the dittos will love him too. These demonstrations could go on in one form or another till Election Day. If the Republicans can consistently frame the situation as "We are in this bad situation because those 'know-it-alls' imprisoned us in our houses, not because of that flu!" there is a slim chance that they could pull it off. But when the citizens start dropping dead the Governors will take cover by pointing their fingers at their glorious leader Trump, saying "He said it was OK, I was only doing what I was told", and meanwhile, aside from the old folks who were ready to go anyway, over 80% of those who voted for Trump in 2016 will survive to vote him back in this November.
Miss Anne Thrope (Utah)
Mitch to aide, "Small businesses, huh? How much did they 'donate' to my PAC? How much? Forget 'em! Hey, set up a call with Sheldon Adelson for me, OK?"
Len Charlap (Princeton NJ)
I would like to ask Mr. Rubin why he supports a public option which would perpetrate the enormous admin costs of thousands of different insurance plans and make lowering health care costs extremely difficult. It would simply add more complications to an already grotesque system. I offer him: The Heliocentric Theory of Health Care Reform Before Copernicus and Kepler, people generally believed the sun and the planets revolved around the earth, but as we got more data it became increasing hard to reconcile this basic idea with the observed facts. People thought up the Ptolemaic system in which the heavenly bodies didn't just revolve around the earth, but they revolved in small circles called epicycles as they went around the earth. That eventually turned out not to be sufficient, so they hypothesized epicycles within the epicycles. The last iteration of the Ptolemaic system was an incredible complicated mess that was almost beautiful in it's complexity. That is what Mr Rubin wants to do. He wants to add yet another epicycle. If Kepler were alive, I am sure he would say, "If you simply give everyone Medicare, you wouldn't need all this complication, and I'll bet it would be cheaper, too."
Fritz Basset (Washington State)
@Len Charlap : I always enjoy your posts; you consistently explain in a cogent manner how money is created and the danger of paying down the "National Debt". We are Monetarily Sovereign in the United States and will have to create a lot of currency to end this crisis; perhaps $7 trillion that goes to the taxpayers, even though their taxes are destroyed upon receipt. If we don't do this, the downturn will be far worse than 1930-39. I'm not worried about inflation either, except when we run short of food, which could happen with the lack of leadership in the Federal sphere. Also: I agree with you on healthcare, esp. as I lived in Canada for 5 years and am a dual citizen.
Charles (New York)
@Len Charlap We are slow learners. After all, it took the church some 350 years to accept Galileo.
Unconventional Liberal (San Diego, CA)
I'm glad to see that Mr Rubin has come around to touting the virtues of progressive taxation. Much of our current huge disparities in wealth and income can be traced directly back to changes in tax structure and regulatory policy made during the Clinton administration, while Rubin was Treasury secretary. Specifically, they slashed the income tax rates on dividends and capital gains (rich people income) to well below the rates on earned income, aka actual work (poor and middle class income). This caused the paradoxical situation, often mentioned by Warren Buffett, that his secretary paid a much higher tax rate than he did! Rubin and the Clintons were the embodiment of Third Way, Goldman Sachs Democrats who favored the rich. Funny, Mr Rubin doesn't mention his 26 years at Goldman Sachs in this Op-Ed. I have to take his current advice with more than a grain of salt.
cassandra (somewhere)
@Unconventional Liberal Very well said. A reminder of Rubin's "achievements" on behalf of the neoliberals.
David Wallance (Brooklyn)
I don't understand how opening different regions or cities on different timelines can contain the virus. People move fluidly from state to state and region to region. As the governor of Connecticut has pointed out, there are hundreds of roads that cross his state line. I would like some one to really break this problem down and explain how it will work.
Kevin (Austin)
Help small businesses? That's a laugh. I contacted Bank of America two weeks before the PPP legislation even passed and said "you are going to be overwhelmed with desperate requests. How do I get information about how to keep afloat?" They said "we've no idea." I applied the minute after they lifted the requirement you have a business card attached to the business account. (I've had an account for 30 years with them.) Since then, I've had no reply, despite repeated queries. Now the PPP is out of money. The Senate has adjourned. Yesterday 10,000 people lined up in San Antonio desperate at a food bank. I do believe in the paraphrased words of the late Leonard Cohen, "they have summoned up a thundercloud, and they are going to hear from us."
Mac (Boston, MA)
@Kevin I work in cyber security for a midsize bank in New England. We are the largest SBA lender in our region. Over the past 10 days we have processed more SBA loans than over the past 10 years combined, no exaggeration. Loan officers worked in shifts 24 hours a day to process as many loans as possible before funding dried up. Point is, banks have never seen demand like this before.
Dejah (Williamsburg, VA)
@Kevin You've heard the term "Security Theater?" This is Great Depression Theater. The Congress passed a VASTLY under-financed law, administered by a VASTLY too small agency, to give VASTLY too little money, to a private industry VASTLY unable to pass the money out in a way which would keep the economy afloat in an effective way. THEN THE PROGRAM FAILED. The program was NEVER expected to succeed in the first place. Republicans can say, "See Government Intervention cannot succeed!" I mean, they DESIGNED it to fail. Democrats can call for more stimulus, but Republicans can block it pointing to the failure of early stimulus, which was DESIGNED TO FAIL from the beginning. And if you aren't paying attention, you will not notice the $500,000,000 that Trump is using to line his own pocket and the pocket of his cronies. Not to mention the *unprecedented* "Donald J Trump" on the stimulus check American families are getting. Greater Depression, here we come.
Vern Lindquist (Illinois)
I would feel so much better if actual members of the actual government were so clearly charting our path forward. One hopes that those people are at least reading articles like this one. They do read, right?
george eliot (annapolis, md)
Words of wisdom from a former director of Goldman Sachs. Wall Street will save themselves, while they contribute nothing to the betterment of the world.
Dwight McFee (Toronto)
Robert Rubin? Geesh! Shall we enumerate the failing up of Robert E Rubin? Follow his professional life and you will discover that the Neo conservative agenda was front and centre. That Rubin would be interested in small business is another canard. Shareholder capital was the cry and Rubin won that war while the nation died. What’s he doing giving advice to small business at all?
Hugh Massengill (Eugene Oregon)
We are in an emergency. In an emergency, like a world war, one taxes the rich until they reenter the land of the...real. If we don't control the big money boys, we are doomed to becoming Russia, a land of pretend democracy, pretend rule of law, and certainly, pretend independent media. I bet that more than a few of the American oligarchs are your friends. What do they say about restoring individual rates? To go back to what caused income inequality of the past, we need to go back to the policies of the past. But to actually mend this broken heart called America, we need to go back to what happened after WWII, when taxes were over 90%, when the draft equalized things for all. Hugh
Pgathome (Tobacco,nj)
we are this 'spot' because of policies pursued by Clinton and Rubin, the trader. The idea that in this environment Rubin gives advice is beyond the pale. we have listen enough from the traders who rip off the economy. he should 'shut-up' and go away.
Walter Ingram (Western MD)
Trump's failure to bring testing to the levels needed, has doomed any economic recovery for months.
mrfreeze6 (Italy's Green Heart)
None of the expert advice you Americans are receiving and are going to receive from current and past Market World experts/leaders amounts to a hill of beans. They are going to spin the idea that the U.S. is going to somehow transform itself, by bringing back manufacturing, rebuilding old industries, "going it alone," investing in infrastructure, etc. This is almost laughable because even during (supposed) good times, your leaders spend more time making excuses not to invest in these things. You're in for some big surprises if you believe this nonsense. These masters of Market World (private equity, venture capitalists, banks, hedge fund managers, etc.) are, I'm sure, already planning heaps of austerity and higher taxes for all you working stiffs. After all, they will game the system again and park their wealth off-shore. They own the government. You don't.
Mochilero (Mazatlan, Mexico)
Let’s not miss the obvious. The Walmart model and invasion destroyed local economies all over the country. Move in, offer low prices, shut everyone else down, then enjoy a monopoly. Mom and Pop never stood a chance. Even here in Mexico I see well-educated liberal retirees flocking to Walmart and Sam’s to the detriment of the local economy. Boycott the mega-corporations or die. Of course it will never happen, particularly when they have the cash to run Fox, Sinclair, talk radio and all the other house propaganda organs.
stan continople (brooklyn)
This is the second Op-Ed piece by Robert Ruben in several months. How is it that someone who discredited themselves by promoting banking deregulation in the Clinton administration then cashed in to the tune of $100 million at Citibank, and paved the way for the 2008 crash, gets their own personal soapbox? Oh right, that's the American way. We see the same thing with the folks who gave us the Iraq War; we still see their smarmy faces on TV as "authoritative" foreign affair commentators. Even Henry Kissinger is still writing opinion pieces. As George Carlin said, "It's a big club, and you aint in it", and nobody in that club ever pays a price.
Julie (Portland)
Typical neo liberal agenda with some crumbs for people and small business. Hopefully we can get rid of neoliberalism in order to save "we the people" who needs representation. All neoliberalism gave us was more wealth and power to very few multi billionaires. How many billionaires have 100 billions?
Jay Orchard (Miami Beach)
Obviously, we need "sound-decision making" to properly respond to our "harrowing health and economic conditions." The problem is that these decisions can't be postponed until January 20, 2021.
That's What She Said (The West)
I walk around the block, small business -going out of business signs-left and right. Then I see construction non stop on luxury apartments, construction on improvements. What the What? This is an obviously contrived locked down-where is the help for the little guy. The rich get richer and the corrupt get more corrupt is all I see developing.
Jonathan (Boston)
@That's What She Said Read your history. During times like this - a bear market - money returns to its' rightful owner. It's an old saying, and it's been going on for a long, long time. As for Rubin, I do believe that, as Robert Kuttner said, he is an un-indicted co-conspirator of so many of the financial and self-serving shenanigans of the various FOBs (Friends Of Bill) from the late 1990s.
Taykadip (NYC)
It's hard to look to Mr. Rubin--who exemplifies those that have benefited from the neoliberal policies he as Secretary of the Treasury, along with the Clintons and other corporate Democrats (not to mention most Republicans), helped put in place--for advice on how to recover from a crisis made far worse by those very policies. Sorry to say, I'm afraid he or someone like him will be back if are lucky enough to have a Biden administration.
stjohner (NH)
The question is not "when" to revive the economy, but "what" economy to revive. Wall Street's casino must be surgically removed as a malignancy on the pursuit of happiness. As with the Green New Deal, we need to re-think how we live on earth.
Marc (Vermont)
I am afraid that we will have to wait for a different President before your ideas can be considered rationally. We now have a President that has no interest in either the medical or economic welfare of anyone but himself. His only interest is in his reelection and enriching himself, his family and associates.
Julie (Portland)
@Marc Plus we do not need a neoliberalism recovery. We need them gone.
David (Cincinnati)
There will be ample room to increase revenues, on a highly progressive basis, for example, by increasing corporate taxes, restoring individual rates, repealing pass-through preferences and imposing a financial transactions tax. We should also pursue universal health care coverage, preferably through a public option, while at the same time reducing our system’s overall costs, which far exceed other developed economies’. There is no way this will pass. It is totally anathema to the GOP's vision of government. Not only does it do nothing to help the wealthy and rich, in fact, it will costs them.
d ascher (Boston, ma)
There is no way to rebuild this economy (or a better economy) without getting rid of Trump and his enablers and sycophants in his cabinet and administration and in Congress. Karl Marx, Adam Smith, and Maynard Keynes could develop a brilliant plan they agree upon, but it would never get through the gate as long as Trump is in power.
Lsterne2 (el paso tx)
The depression lasted a decade, and, in once sense, the country was better equipped to cope with it then than now: at that time, 50% of our population lived on family farms. They were able, at least, to feed themselves, and, in smaller communities, to provide some relief to others. Today, less than 2% of the population lives on family farms. Harvesting fruits and vegetables require labor, and the living conditions provided for these people expose them to infection on an epidemic level. This is also true in meat and poultry processing plants. It's scary to consider, but we could be facing something much more serious than grocery shelves with no toilet paper: empty meat and poultry sections.
Miss Anne Thrope (Utah)
@Lsterne2 - You betcha! My rents' families lived in West Hicksville, PA. They said they never really knew there was a Depression - they didn't depend on the "outside" economy, anyway - didn't have anything before, during or after. After musing about our garden for years, our kids are all suddenly digging out the bluegrass, buying chicks, and calling for advice (we'll see how they like the butchering/plucking part? 'Specially, after their kids name 'em). Some positive changes will (might? Hopefully?) come out of this Global Wake-up Call.
kathyb (Seattle)
Good ideas, but we need a Congress that will implement them. In this moment, the Republicans will not make changes to the next round of the PPP that would benefit small business owners that don't bank with the big banks. Large corporations get the big bucks while my restaurant, which sells takeout to try to keep going, most likely gets nothing. Income inequality is already at high levels. This must not be be the time when the rich continue to get richer and a lot of hard working Americans lose everything. And when they lose their houses, let there not be a repeat of rich people buying up the bargain homes to sell in better times. We need to increase goodwill and cooperation, not resentment, despair, and outrage. That requires voting Republicans who favor the big and rich at the expense of the small and struggling out of office. But how many small businesses will be lost between now and the election? Any small business owner or employee, regardless of party affiliation, need to contact their representatives in Congress and urge them to take effective action now.
Fourteen14 (Boston)
Mr. Rubin's fine-tuned plan sounds complex with many possibilities for it to go wrong. I don't know if we have the institutional capability to make the adjustments required to keep it on track. But the big error is that it tries to get our old economy back. We need an entirely new economy that reverses climate change, and this is the time to do it. It is now or never.
Julie (Portland)
@Fourteen14 hip hip horay! we need a different economy that values work and workers and the Green New Deal would do exactly that. No more neoliberalism, thank you
Jonathan (Boston)
@Fourteen14 So when the answer is NEVER what will you do? AOL is not going to save you? Joe Biden certainly won't. Bernie is gonzo. Elizabeth Warren has a plan but can't deliver. What WILL you do?
Rocky (Mesa, AZ)
I agree with the recommendations of Mr. Rubin, but I think we need to be doing more now to preserve business and help people. When people become seriously ill with the virus, they may be put in a coma to give the body more time to heal. America should put the economy in a coma by declaring a 3 month holiday on paying rents and leases (apartments, office buildings, cars, whatever) and loan payments (again of any kind). Leases and rents would simply be forgiven. Loan payments would be added to the end of the loan, extending the term. Forgiveness and deferment would give people and businesses a break during the crisis. Those owning the assets for which rent and lease payments are forgiven will lose a little, but it is the rich who own assets and the loss will only be a small percentage of the value of the asset.
KM (Hanover, N.H.)
Some might think this piece is about fiscal austerity. Quite the contrary, it is Mr. Rubin's version of "you're going to need a bigger boat". But he also correctly points out, issues of debt/GDP will need to be addressed further down the line because the virus hasn't repealed the financial "law" of the sustainabilty of debt. This is true for the US or any other country, even for the country of the world's reserve currency.
Len Charlap (Princeton NJ)
@KM - How does the "financial "law" of the sustainabilty of debt" apply to a country that can create as much money as it wants out of thin air and MUST create that money and get to us to support a growing economy?
KM (Hanover, N.H.)
@Len Charlap If the money is borrowed, then debt is created. At present, there are plenty of savings to absorb that debt sitting on the sidelines. Unfortunately, given the level of unprecedented and unsustainable inequality (wealth and income) in this country, those savings are not in the hands of enough people. As for printing money out of thin air, we are not there…yet. If and when that should happen- something that would require an act of Congress- history tells us that the outcome will be highly inflationary. On the other hand, in theory such printing could be done in a more or less responsible way. But that’s the rub.
Jim Mamer (Modjeska Canyon CA)
We already create money “out of thin air.” The government does it and so do banks when they lend multiple times more money than they have. When done responsibly it works, but when investment banks, savings banks and insurance companies were allowed to merge, thanks to Clinton and Rubin, responsibility became an option. Then came the disaster of George W Bush. I suggest we bring back Glass-Steagall, bring back highly regulated Savings and Loans, forbid the transfer by sale (or bundling) almost all loans and then add in a few recommendations of Rubin ... for example, “increasing corporate taxes, restoring individual rates, repealing pass-through preferences and imposing a financial transactions tax,” pursue universal health care coverage, while at the same time reducing our system’s overall costs.
tjd (atl)
Thanks, Bob. This is all good advice. Only two problem: gop orthodoxy will not allow giving benefits of any kind to humans. Only big industry that can afford to buy their own politicians get benefits. And on top of 40 years of gop destruction of government, we now have the most incompetent administration in the history of the world. So... there's that...
Charlton (Price)
Wht about these requirements, Mr. Rubin? just for starters: Everyone with some gross income (especially if its "gross") should pay into Social Security. Meet health care expenses with public funds = taxes. Remove the recent enormous tax giveaway to those with the highest gross incomes. Stop allowing interest payments to be carried forward...
Kingfish52 (Rocky Mountains)
" way to reconcile any differences is for the administration and Congress to convene a small group of independent and respected public health experts and economists to weigh these interdependent health and economic considerations." Certainly, with a normal, responsible President and Congress this would be a good idea, but with Trump and the Republicans, we've already seen how they refuse to listen to experts, and live in denial of reality and facts. I'm afraid nothing of real help can happen until we rid ourselves of these anti-intellectuals and reality deniers. If they hadn't been in charge, we might not have the shortages of tests, and medical supplies, or the defunding and shrinking of organizations like the CDC that has led to many thousands of unnecessary sick and dead. We might be able to get a handle on how many people are infected or who have been, and thereby be able to make informed decisions about how to proceed with re-opening the country. But these know-nothings, interested only in themselves and their wealthy benefactors have always placed profits ahead of national security and the well being of people. So, Mr. Rubin, while your knowledge and experience could be very helpful in addressing this crisis, in this Administration you would be ignored and ultimately fired.
tjd (atl)
@Kingfish52 Yep. Mr. Rubin's advice will fall on deaf ears, or be read by blind eyes. That is if the #FakePresident actually reads newspapers, which he doesn't. But not to worry, we have Kudlow, who has been wrong about everything.
Bill H (Stoughton, WI)
From the man who reportedly prevented regulation of the market for financial derivatives.
Displaced (New York, NY)
Thomas Edsall's piece earlier week talked about the Democratic hobbyist, that bloc of mostly wealthy Wall Streeters and Silicon Valley executives. They are neoliberals without exception, with a tenuous attachment to the great advances made by iconic Democratic leaders like FDR and LBJ, and nurse a deep suspicion of all progressive proposals. Robert Rubin is the poster child for this DINO bloc and his OpEd article with fake compassion concealing its real message, namely genuflection to "future fiscal repair", a.k.a austerity, confirms it.
Matt (VT)
"But too many small businesses can’t survive without more being done. Even those that receive loans under the Paycheck Protection Program are likely to find the funding insufficient to reopen." The Paycheck Protection Program ran out of money within two days. Most businesses that have applied for these loans will receive nothing unless additional funds are allocated by Congress. This is not only bad for small businesses, but removes incentives intended to ensure workers would continue to receive pay. The reality is much worse than you acknowledge.
new conservative (new york, ny)
@Matt And the democrats are holding this up to damage Trump's prospects for re-election. They also don't love small hard working business people who complain about their tax burden. Democrats would rather have people dependent on them for unemployment and other benefits - even though they offer a pittance compared to what people could earn from a job at even a small business - and thus secure more votes for the democrat party.
Len Charlap (Princeton NJ)
@new conservative - Actually the Democrats support sending more money to small businesses than the Republicans, but they also see the need to get funds to state & local governments and hospitals. It is the Republicans who are holding up the money. But like most conservatives, you don't let facts get in your way.
new conservative (new york, ny)
@new conservative As reported in the WSJ today: "In a joint statement Monday, Speaker Nancy Pelosi and Minority Leader Chuck Schumer called for “further changes” to the Paycheck Protection Program, plus “significantly increased” funding for disaster grants and loans, plus “additional support” for the food-stamp program, plus “adequate funding” for nationwide virus testing and personal protective equipment, plus “the collection and publication of demographic data” so that “we can accurately determine the level of impact on under-served communities and communities of color.” Identity politics and the social pork barrel trump jobs and business solvency."
Bruce Pippin (Carmel Valley, Ca.)
As long as we are characters in Trump’s reality show, it is impossible to say where this goes. Because of the Covid-19 epidemic, it has become painfully clear America has lost its way. Between Trump’s dystopian reality universe filled with people who deny climate change, any scientific information, facts, truth, and believe only him, so-called news sources that are purveyors of wild conspiracy theories and outlandish propaganda, and crack pot politician who promote corporate interests over human life, we can’t handle the basic decisions necessary to combat a health crisis. Testing and personal protection has always been job one, we have failed and continue to fail so badly it’s pathetic. It’s very simple, you can’t fight an enemy unless you can see it, detect it, and protect yourself from it and we just can’t seem to handle that fundamental concept.
Jumblegym (Longmont CO)
"Business as usual" is neither a possible nor a desirable outcome. Income inequality is not sustainable. Environmental ravages are not acceptable. The Donald has shown how rapidly a great society can be brought to its knees. Building is more difficult than kicking over someone else's tower of blocks. Our Toddler-in-Chief is out of his depth.
There must be a criteria for any assistance. For example does the small ill conceived 3 month old restaurant that was on a fast road to failure anyhow, deserve government help only to close. The help alleviates its owners bills, but how does it help a broader group, like the servers or cooks? They still lose their jobs. With much talk about rent strikes and rent freezes, I'm shocked to realize that the advocates for these measures rarely if ever understand that not all landlords are wealthy tycoons who can carry the expenses that everyone is relieved of paying. Do people not understand the interconnectivity of it all? How does the owner of a building make the property tax bill and pay for the new heating system if no one is paying rent? If he is relieved of a tax bill, then how does the county pay for the road repairs, water mains, and other essentials that break, age and so forth? Endless forgiveness leads to a complete breakdown. Yet doing nothing brings the same results faster. It's a real quagmire.
rshapley (New York NY)
What about a rent-forgiveness program so that small businesses only have to pay 50% of their rent for the next year? Otherwise a large fraction of the hundreds of billions of dollars the US Gov. is giving to small businesses is going to landlords not to the employees or the entrepreneurs.
cassandra (somewhere)
@rshapley But America loves the "rentier" class. The entire economic construct depends on it. It's nothing more than a neofeudal system.
Jack (Middletown, Connecticut)
I can't argue with anything Mr. Rubin says here but one must remember his role in the economy we currently have. Mr. Rubin was one of the key players in pushing to allow banks to use aggressive borrowing and speculation. Basically allowing $1 of assets to be backed up by $33 in debt on a balance sheet. After he left the Treasury, Mr. Rubin already a very wealthy man from his days at Goldman Sachs went to Citigroup as a grossly overpaid senior advisor. The policies Mr. Rubin pushed for (Excessive Leverage) caused Citigroup to implode and be bailed out by the government. Should Mr. Rubin now offer advice or should he just not remain silent and enjoy his windfall. Sir you have done enough damage for a lifetime.
Ryan Collay (Eugene Oregon)
We need to support, the least of these, as small, street corner, businesses lose income...targets small, 10 or fewer employees, single owner operator...they have been the hardest hits and need to recover first. The second thing is to build a book of protocols they can use the safety open, yes with differences but at least a path forward! If we could give restaurants guidelines for safety, to help assure returning customers, and maybe a small grant to cover a portion of the loses of tables, they could open. If we did things like this, neighborhoods could return to the new normal...there’s a mixed statement for sure. And we should be able to assure they have access to all the needed protective gear, at cost, if not for free. People can get used to hand sanitizers, masks, disposable menus...but businesses and their employees need solid advice! From the CDC!
manfred marcus (Bolivia)
Your recommendations sound not only reasonable but that when 'business as usual' can resume, we all shall be better equipped for it...and avoid the excesses 'imposed' by the current economic inequality, an awful condition that has been 'our' scourge' for far too long.
Miss Ley (New York)
Thank you, Mr. Rubin, for your views on how to save small businesses and services in impoverished neighborhoods, adding that additional funding for Community Development Financial Institutions is needed to nourish small Business in our underprivileged communities. In 1995, I purchased a small pad in midtown Manhattan and commuted to work on foot. Rockefeller Plaza was evolving like the rest of The City, and small businesses were losing traction on Third, Second and First Avenues. When visiting my uncle and his wife in Connecticut, life-long supporters of The Democratic Party, I would be asked to bring a cake from Maria's. It held strong, and finally collapsed. The economist I worked for in those days was redoubling his call to restore and rebuild our country, well received by Washington's House of Representatives, and placed on the economic back-burner. Should you ever have a window in your schedule to visit the rural regions of New York State, it will not surprise you to see small towns and villages wiped out. We can not live on hope, chocolate and spirit alone; a viable financial national program is needed more than ever, and one day I plan to go to Olana to see how beautiful America once was and could be again, while revisiting the 'Golden Rule' in the times of Norman Rockwell.
Ron Boschan (Philadelphia)
Mr. Rubin doesn't seem to realize that banks are not interested in lending to small businesses, and are not set up to provide that service on a timely basis. Of course, in times of distress, they are willing to take trillions from the Fed and slowly lend it out while taking five percent off the top. Nancy, Chuck, Elizabeth, what this country needs is a new type of local institution that are created just to specialize in lending and providing services to small businesses in their community, similar to savings and loans, and regional banks did in the past. They, and the services they provided to their communities are gone. There are plenty of entrepreneurs who would be happy to start these companies. Congress would have to institute fair rules of the road, including limits on interest rates. While I realize this new small regional bank system can't be set up quickly enough to solve this problem, Congress has to realize why we are not capable of helping small businesses now, and create a vehicle to fix the problem in the near future. I believe under the CARES act, the provision to allow individuals to borrow up to $100,000 from their retirement plans does provide a bridge loan for small business owners to buy time for government aid to arrive, and save their business. This provision could be raised to a much larger amount, and interest on the loan or tax on the distribution could be waived if the funds were used to maintain or start a new small business.
Mike K in Indianapolis (Indiana)
@Ron Boschan Good thoughts! I would advocate immediately breaking up the banks to operate only in 1 Fed District. I would also propose adding regulations like limiting interest rates that can be charged by any Federally chartered bank and other reforms. That way, if the people of Delaware or South Dakota want to allow banks based in those states to charge rapacious interest rates to their own citizens, have at it! But don't use those states as a base to incorporate there and charge outrageous rates to consumers in other states.
Andy (San Francisco)
It has become tragically clear to me that the US is incapable -- at least under Trump's so-called leadership -- of widespread testing, a choice (and I assume it's a choice and not a plain old failure) that is completely baffling. It's. Not. Happening. Unless, of course you're sick with the virus and even then they may just call it a presumptive positive. So we really need to discuss plans for slowly opening the economy recognizing that we'll be flying blind, and subject to starts and stops as the virus does its work and cases surge again. Until we get a vaccine, that means huge swaths of the economy -- the elderly, the obese (a whopping 40% of Americans), the infirm -- will still be largely housebound. We'll have (maybe) antibodies tests and (maybe) contact tracing -- which will (maybe) limit the damage as the virus spreads. A very rough road is ahead. And I'd like to see some plans that are realistic about the country's shortfalls.
jerryg (Massachusetts)
This is a strange article. Everything is pretty conventional until the last paragraph, which suddenly starts in about the dangers of debt, even though it says that debt was at a low level prior to the crisis. Then it starts talking about legislative measures to reduce debt in the longer term, but says that we’ll need them soon because the debt will impede recovery. Seems that if the piece really wanted to be about dangers of debt and short term vs long term tradeoffs, it should have made its case somewhere. If history is any guide, the biggest danger at this point is excessive fear of debt. It was a serious problem for Roosevelt and also for Obama. That doesn’t mean we shouldn’t pay it down in good times, using the kind of suggestions mentioned. But it’s hard to imagine that debt is going to do much in the near term to impede recovery.
617to416 (Ontario via Massachusetts)
@jerryg It's interesting. As long as borrowing is stimulating growth and not causing inflation we can accumulate vast amounts of it. Heck, I think we can go full Modern Monetary Theory and just have the government spend without even maintaining the fiction that the government will pay it back. But I fear what happens if growth doesn't happen in response to the spending. At that point does borrowing lose its potency and do nothing but drive down the value of our currency and push us further into recession? To get out of this economic disaster we almost certainly have to borrow and spend in vast amounts. The question will be whether it stimulates the hoped-for growth or doesn't. That may be a life or death question for the United States.
Girish Kotwal (Louisville, KY)
I would like to hear a honest assessment from economists like Robert E. Rubin as to how much impact spending borrowed money and piling on our national debt will have on our national security? Should there not be a substantial spending cut across the board to prevent any further rise in national debt which is hovering around 25 Trillion? The funds allocated to small businesses have already dried up. Unemployment benefit funds will soon dry up. The treasury is printing money at a faster pace. Is Washington gone reckless with adopting Sen. Bernie Sanders wish list? Was the decision by governors to shut down businesses a flawed precursor to economic disaster. The paradigm shift from responsible fiscal policies to supporting a "nanny state" going to ruin US. Death and taxes are inevitable but nature decides who is the fittest to survive and live past their normal life span, by stretching life and fighting nature at a great cost is going to be counter productive. The responsibility to help live longer for those on their death beds is not that of govt but of the individual. My point is that the shut down of businesses by governors was an admission that their capacity to stretch lives is being stretched to the limit. Also our nursing homes where a very high percent of the COVID-19 persons died are not Gods to ensure that their occupants live forever. I think the Trump admin. so far has gone above and beyond what was humanely possible to compensate for job and business losses.
Cheryl (New York)
@Girish Kotwal "Responsible fiscal policies" are those that support what you call a "nanny state". You don't cut government spending in an economic downturn. Read, for instance, Adam Tooze "Crashed", about why the US recovered faster than Europe from the 2008 crash. Government is for the people. ALL the people, not just the rich. Massive income inequality does not make for a prosperous country. If we had a fair tax system, access to health care and education and an adequate minimum wage, maybe we wouldn't need your so-called "nanny state".
Girish Kotwal (Louisville, KY)
@Cheryl from New York. Are you saying we should not cut defense spending on missiles, fighter jets, nuclear war heads, aircraft carriers, tanks and a military build up. What good is the military industrial complex in fighting a nano sized virus invisible to the eye or even in a light microscope. If there is a appropriate time to cut defense spending, it is now. Like right now during an economic downturn when spending has to be fiscally responsible and for the right reasons.
Cheryl (New York)
@Girish Kotwal We could definitely cut defense spending. But we would need to absorb all those workers somehow. Infrastructure? Alternative energy investments?
True Believer (Capitola, CA)
Sooo. All that pedigree and we get this: Borrow. A lot. In the real world what is happening is the material standard of living will go down. A lot. The only question is when people are honest enough to state it as such.
Ed (Western Washington)
Economically we should think of this like WWII. We should not spare money to keep businesses and and people afloat. The Government should start a campaign to sell savings bonds at a good interest rate (5%) to help pay for this. Then when it is all over they should institute tax policies similar to what we had post WWII. with a highly progressive system with a top tax bracket of maybe 60% progressively dropping to maybe 10% for the lowest tax bracket. Add to this a system of personal tax cuts designed to incentivise job creation. And interest rates of around 5%. Plus putting a lot of money into the Public University System to drastically lower tuition and of course lots of money into healthcare. This would place us on a similar economic trajectory to 1945-1980 a period of economic expansion
T. Schultz (Washington, DC)
This is a surprisingly progressive vision. But sometimes crises mean the need to change our approach and outlook. Republicans, unfortunately, serve only the interests of their donor class and greed. Because of political realities they do not actually starve the beast, they just feed public debt and shift as much money as possible to those who need it least.
4AverageJoe (USA, flyover)
Great idea. What do you want to bet, that we see a payroll tax freeze show up again by the Republicans They are living the dream! Starving the state and local budgets who are desparate to pay firemen, policemen, medicaid nursing homes, hospitals, front line emergency staff, and holding them hostage by agitating on ALL MEDIA, that the only fault is "shut down" problems in progressive states.
C (New York, N.Y.)
Headline is Rubin Concedes Deficit No Problem, Advocates for Small Businesses. Mostly a centrist approach, thankfully bent by the leftward tilt Bernie Sanders has moved the Democrats towards, and really the entire country. He's behind the times since now that the Republicans neck is on the line, practically no one is complaining, least of all Republicans, lest the call for higher taxes come to the fore to offset the needed increased spending (the opposite of starve the beast, but correctly used). Good comments already pointing to defect of just public option, not enough savings, but neither is Medicare for All the only other option (see Europe). Confusing, especially due to earlier comment by someone claiming the Rubin took the opposite position, but Rubin concedes a higher debt ratio is ok. This is the lesson learned from 1932, 1937, and 2009, that Larry Summers practically single handedly destroyed the American economy, the Obama economy, Democratic party, and gave us Trump. Summers, the Rubin protege at the Fed was afraid of the too high deficit and advised Obama accordingly.
Len Charlap (Princeton NJ)
@C - You are correct that Europe gives us many different examples of efficient universal government run health care system. The reason I support M4A is that is is only an incremnetal change for us. We already have it for the part of the population that uses the most health care. We know how to run it.
C (New York, N.Y.)
@Len Charlap Economist Dean Baker has some excellent writings on how to transition to M4A, starting with lowering the age by one year, and then lowering gradually as experience teaches us how to scale the system and change how it works. M4A is not only an incemental change, especially since it's not even M4A. Those on current Medicare may encounter large limited treatment and very large fees. The healthcare system rations Medicare treatments and also offsets lower payments to Medicare patients with higher fees to everyone else. The waste and fraud in Medicare wouldn't allow needed savings to properly expand coverage. The overall healthcare system in the US is a failed system, too expensive and underserving the needs of the public with poorer healthcare outcomes than other developed nations. Medicare is part of that failed system. To copy the advantages of universal healthcare, copy from other systems that work. Few working systems if any are modeled as the Bernie Sanders envisioned M4A. Sticking to just that one plan in the face of contradictory science is an unecessary risk to American's health.
Len Charlap (Princeton NJ)
@C - The "A" in M4A stands for "ALL" People now on Medicare like me will be covered just the same as everyone else. No fees at all. It is incremental, but the increment is not only the extension to everyone, but improvements on current Medicare. All the universal government run systems have an entity that can gather data and analyze it and make recommendations based on science. We cannot do that because much of the data is held by private insurance. Under M4A we will be able to do so. This will make our system more efficient. Bernie's plan is just an improved version of Canada's. Since Canada pays less than half per person of what we pay, that give us plenty of leeway (about $2 TRILLION a year) to pay for the improvements and still save a bundle. Finally cost shifting is a myth. You believe that because Medicare does not pay enough, the hospitals are forced to shift the cost to private insurance. i.e. there is causality. I do not believe in this causality because if there were such causality, then hospitals with a greater percentage of income from Medicare would have to charge private insurers more than those with a smaller percentage. So there would be a correlation between the percentage of income from Medicare and the fees to private insurers. But there is MedPac data that shows no such correlation exists. Hospitals charge private insurers as much as they can, and the larger and more prestigious ones can charge more. This is independent of Medicare billings.
Kevin (Austin)
A total fiasco. And one that was easily predictable with simple back of the envelope math. I outlined this plan over 5 weeks ago: The scope of this quarantine is unique; the economic response should be unique too. Counterintuitively, we should be stimulating essential businesses: municipal works, utilities, medical care & research, food production—not artificially "stimulating" dormant businesses. Government should have provided essentials for living in quarantine: food, (shelter if needed), and medical care. Dormant businesses would not pay payroll, but could not fire employees, just as during jury duty. All bills should have been suspended—utilities, insurance, mortgages, rent. (That goes for landlords too so lack of rent would not lead to foreclosures and utility cut-offs.) As businesses reopen and people start working, gradually if needed, delayed bills would be apportioned over 12-24-36-48 months. Why this way? It at least cauterizes capital losses, slows money gushing from people's pockets, preserves all the investments that went into creating businesses in the first place, gives everyone (especially the least fortunate) assurance and peace of mind that their basic needs will be provided, and stems employment losses. Most of all, this would be far less expensive in the long run, as we are realizing (this was easily predicted) that supporting closed businesses by printing trillions of dollars is simply impossible, both financially and logistically.
A. Stanton (Dallas, TX)
I have a better and much simpler plan to stimulate the economy. I would issue all Americans over the age of 18 a monthly check of a thousand dollars from the Powerball Lottery -- with just the requirement that all the lucky winners be made to splurge all of it every 30 days on things like big-screen TV’s, new cars and box seats for the opera. Anything that is fun and keeps the economic pot boiling. This money could not be used to pay hospital bills or college tuition. Those places are already rich enough and should simply be required to wait for their money We already have too many people who win the Powerball Lottery who end up buying their mother a house and saving all the rest of it, which is no fun and ruins it for the rest of us.
pmbrig (MA)
@A. Stanton Let's see: $1000 per month per person over 18 would be somewhere in the neighborhood of 12,000 x 250M = $3 trillion per year. I've been unable to find out how much the Multi-State Lottery Association takes in per year, but It looks as if it's on the order of $1B. If' I'm wildly off and it's $10B or even $50B, that's not even close to 1% of the funds needed. Kudos for thinking outside the box, but the numbers don't seem to work out at all.
W.A. Spitzer (Faywood, NM)
"But if we wait until there’s zero risk of further contagion, the hardship caused by this severe economic disruption could become far worse."......Until there is a vaccine or an effective antiviral people are generally going to avoid, restaurants, hotels, airports, mass transit, sporting events, and anywhere else there might be crowds of people. It is true that a vaccine or an effective antiviral drug take time, but you will never be able to really open the economy until one or the other exists. Where is the government effort to accelerate the process? There should be a Manhattan like project and it should have begun two months ago.
Sean (Westlake, OH)
Infrastructure spending has been talked about for too long with little action. With a health crisis like Covid 19 you would think that an infrastructure bill would be common sense. For the politicians that care it could be a loan program to the States and public utilities. Updating our roads, bridges and major utilities would be beneficial to all Americans. Best of all it would aid job creation at a difficult time in our history.
Suzylaine (Irvine, CA)
@Sean Infrastructure work is a need all over the USA. Now is an excellent time to work on the roads while folks are staying home. The downside is it takes awhile to get these projects going. Maybe there are some projects that are pretty close to ready and all they need is the funding. Congress, get to it.
Mike (Republic Of Texas)
"But, while remaining focused on those imperatives, officials must begin planning when and how to regenerate economic life for the shorter and longer term." Put a mask on everyone. EVERYONE. The only business that can't return to full capacity, sit-down restaurants. Air passengers, get a mask. Mass transit commuters, get a mask. Schools will have masks for students and staff. I'm sure there will be a billion dollar government subsidy for voice enhancing, disease stopping masks. If the mask is an effective means to stop transmission, it is thereby safe to say, we can have social distancing and quarantine on the move.
Tournachonadar (Illiana)
Another reminder to paraphrase Karl Marx's troublesome maxim that the true God of Americans is money. He said it differently of course but the meaning remains valid. The federal government has been coopted into a private consortium that exists to make the Trump family and their chosen friends wealthier. Those who were picked for his cabinet have but one qualification: wealth. In most instances they have a glancing, if any, familiarity with what their department does. It's crystal clear from everything our brattish puerile president has said and initiated that it's all about making his personal wealth grow. Human lives during this coronavirus pandemic mean nothing, the loss doesn't register with a person whose only God is money.
chickenlover (Massachusetts)
" ... one way to reconcile any differences is for the administration and Congress to convene a small group of independent and respected public health experts and economists to weigh these interdependent health and economic considerations." There are many words here that will spook Trump and his minions: independent, respected, experts, interdependent. Far too complex, far too may syllables, and far too many words.
reaylward (st simons island, ga)
Might as well go big, and Rubin goes big with this essay. My observation is that PPP loans went to small businesses that needed the loans the least; indeed, applications were being made before the law even went into effect, which explains why all of the appropriated funds were committed in less than two weeks. When it's eventually revealed who received the bulk of the funds, public enthusiasm for more government relief will drop as fast as Trump drops advisors.
Jean (Cleary)
The first decision "sound decision-making" sums up our problems. There is very little of that right now in the Administration and in the Senate. The first sound decision should have been made many months ago, like having enough tests, enough protection equipment for those on the front lines, having enough masks and gloves for every citizen in the country. We are so behind at the moment because of egos getting in the way of common sense, it will take more time than would have been necessary. If the Administration really cared, they would have the best economists, the best of health care experts and let both Dr. Fauci on the Health side and someone like yourself or Robert Reich head up this Committee. Until then, we will still have little progress. Look how badly and bungled this mess is already with the lack of thinking through the roll outs of small business loans, the bailing out, and that is what it really is, of the Airline Industry, etc. And forget about enough equipment for the healthcare workers With FEMA stopping shipments to States and hospitals, being confiscated by FEMA , the Federal Government agencies who should be aiding this effort, are interfering with progress.
Len Charlap (Princeton NJ)
I have 4 complaints about this Op-Ed. 1. Mr Rubin does not appear to know where money comes from. 2. He never mentions private debt, household & business debt, which is at least as important as federal debt. 3. He does not understand the purpose of taxes. 4. He believes that we must lower the federal debt ratio and that will guarantee prosperity. 1. There are 2 kinds of money, real money which is created by the FED out of thin air & credit money which is created by banks when they make loans. Credit money is merely a promise to provide real money upon demand. Thus banks have to have reserves of real money to come with when needed. (Actually they can also borrow it for short periods from other banks or the FED.) The important point here is that banks make loans in amounts that are many times what they have in reserves. They can get away with this because people usually write checks or use credit cards, but obviously this can only go so far. It is the job of the FED to impose a limit on how much a bank can lend out. Today the big banks can only lend out 10 times their reserves. In 2007, thay had lent out 27 or 28 times. They way real money gets to us is the FED buys Treasury bonds & the gov spends that money into the economy. So the gov never really needs to borrow money from the public because the FED can never run out of funds. Since the FED returns the interest on these bonds & they can be rolled over, there is no cost to the taxpayer. The only limit is inflation.
Len Charlap (Princeton NJ)
2. While the gov can not run out of money, we can. As we have seen in 1., banks cannot lend out arbitrary amounts of money. Thus too much private debt is deadly. 1929 & 2008 are both examples. Before each of our 7 financial crises, there was an explosion of privare debt caused by the federal gov not providing enough real money for us to conduct commerce. Hence banks lent too much. 3. What about inflation if the FED creates a lot of money? If the federal gov spends the money so it goes to the people who need it & will spend it, by the miracle of capitalism, production will increase; we will make more goods & services. Since more stuff lowers prices, this will control inflation. We will only get into trouble if for some reason (like an oil embargo), we can't increase production. That's where taxes come in. They take back the excess money. The purpose of taxes is NOT to pay for gov operations. The federal gov doesn't need your money. The purpose of taxes is to control the amount of money in the private sector. 4. It is easily seen why the federal debt ratio is not a very useful parameter. It was only 16% in Oct of 1929. That did not indicate a healthy economy. It was 121% in 1946. That was followed by the 27 years of the Great Prosperity. After both WWI & WWII, the debt ratio decreased. What was the difference? After WWI, the debt (in dollars) decreased because the gov taxed more than it spent. It took money away from us. After WWII, the debt increased; money was sent to us.
Richard Winkler (Miller Place, NY)
@Len Charlap: I'm likewise concerned about taking advice from Mr. Rubin. You are right that he never mentions private, household or business debt. And back in the '90s he didn't appreciate the risk to the economy in allowing an unregulated derivatives market that resulted in the Great Recession of 2008. Irresponsible excesses in the private marketplace ultimately become the government's responsibility.
Ryan Collay (Eugene Oregon)
I would redo the GOP’s tax cuts by removing the money that went to people who didn’t need it...that would bring back billions to pay for the needed service...they should be happy to contribute!
Thank you, Secretary Rubin, for a comprehensive plan written for us, the non-economists. You have helped me understand what to communicate to my representatives in government and how to choose to vote!
See also