In the last four weeks alone, there have been 22 million unemployment claims. While the registered unemployment rate for March was 4.4 percent, economists believe this statistic is widely understated, given that it did not account for the last week in March, when unemployment really spiked. Economists instead propose an unemployment rate between 12-15 percent—the worst unemployment rate since the Great Depression (24%).
In efforts to alleviate the pressure of these circumstances, Congress and the Trump Administration passed the country’s largest stimulus bill in history, the CARES Act (Coronavirus Aid, Relief, and Economic Security Act). While there are important components to this bill—outlined by Emerson McGinnis’ column last week, “Will the COVID-19 Stimulus Package be Enough?”—it largely fails to protect the working class and communities affected most by the virus, instead favoring corporate bailouts.
These corporate bailouts closely mirror those passed after the 2008 financial crisis, giving companies large sums of money with limited oversight. As the current pandemic cripples our healthcare system and economy, we have the opportunity to change our priorities and rebuild a system that places workers, immigrants, those with preexisting medical conditions and a sustainable future ahead of the profits of banks and the airline industry.
In addition to expanding unemployment benefits, delivering $100 billion to hospitals and giving stimulus checks to eligible Americans, CARES offers small business loans to incentivize owners to continue employing workers. However, private banks such as JPMorgan Chase, Wells Fargo and Bank of America have been given the responsibility of distributing small business loans, causing bureaucratic obstacles for many business owners when they tried to apply for a loan. Meanwhile, large corporations receive bailouts from the stimulus package with very little difficulty.
Pentagon Inspector General Glenn Fine was appointed to oversee the $500 billion of corporate bailouts included in the CARES Act. However, President Trump fired Fine, leaving corporations to receive money without any independent oversight, which allows any companies who do receive funds to largely use the money however they wish. The act outlines that $25 billion will be distributed to the passenger airline industry, $4 billion to cargo air carriers and $3 billion to airline contractors, while the other $475 billion goes to other large companies through Federal Reserve lending programs. Beyond airlines, CARES fails to include who else will receive bailouts and to what amounts.
Here is the first problem with the multi-billion dollar corporate bailout: A lack of transparency. Corporations will be allowed to use stimulus money as they please, and we—everyday, working Americans—do not know who will be receiving the money and for what purpose.
However problematic this is, we are still yet missing the bigger opportunity presented here. The coronavirus has wreaked havoc on most businesses, including large corporations such as the airline industry. But by throwing money at these corporations to make up for lost revenue during the pandemic, little will change in how they run their businesses.
In 2008, following the stock market crash, the Obama administration failed to hold any person or corporation responsible for the man-made disaster. Corporations, particularly the automobile, airline and banking industries, begged the government for relief. Obama passed an $800 billion stimulus package to help bail out the economy—these industries included. The stimulus package, of course, helped get the economy back on track, but the same could have been accomplished while demanding new industrial standards.
Today, we are offered the chance to repeat history—or learn from it. If we are able to do the latter, it could look something like this: We would still provide financial assistance to large companies, but we would have contingencies. The companies would have to commit to reducing carbon emissions by a certain amount and comply with higher standards—wages and healthcare benefits—for their workers. These companies and standards could be used to realize a green future by building reliable, mass transit and implementing a Green New Deal-like plan. This plan would ensure a transitionary period by which people working in the fossil fuel industry would learn the skills for the renewable energy industry, rather than render them unemployed.
Climate activist and author Naomi Klein commented on using a crisis to rebuild green infrastructure in her book “This Changes Everything,” saying “It [could become] clear to all that climate action is, in fact, a massive job creator, as well as a community rebuilder, and a source of hope in moments when hope is a scarce commodity indeed.”
The same rings true for our current pandemic. Some people stay at home, working and worrying about contracting the virus at a grocery store, while others are forced to continue working without proper safety equipment or a livable wage. Now is the time for a dramatic economic transformation to prioritize a green agenda, which would also address needs for healthcare and public health infrastructure so we can be more prepared for the next global crisis.
While we must demand more accountability and transparency for corporations—especially since the government’s stimulus bill isn’t—we should still celebrate the little victories. Foremost, the CARES Act did not include the $3 billion payout to oil companies that the Trump administration originally fought for. Fending off these actions is just as important as demanding responsibility from industries disproportionately responsible for carbon emissions.
For the 50th anniversary of Earth Day on April 22, think about what responsibilities corporations and countries should have in order to maintain a habitable planet. The presidential election this fall will mark a critical turning point. We must decide whether we want to continue the legacy of a president who tries to bail out the fossil fuel industry over the American working class and who uses an international crisis to relax environmental standards, or whether we want to give ourselves and our planet a fighting chance. And local elections and issues matter, too. Americans have a poor history of presidential voter turnout, but an even worse one at the local level. Environmental initiatives need to be supported by local, state and national representatives in order to hold big corporations accountable and ensure our planet will still be around to celebrate Earth Day in another 50 years.