I gave my first commentary back in 2005. In it, I identified Alan Greenspan and John Kenneth Galbraith as economists occupying two ends of the spectrum of economic policy choices discussed within the economics profession in the US. I ended the presentation with the following sentence:
“In these short descriptions of the Greenspan vs. Galbraith approach to the balance between individual liberty and cooperative political action to solve economic problems we see all the debates that have engaged and will continue to engage us as we attempt to chart our economic policy course in the 21st century.”
[I actually was limiting myself to the economics that is discussed in most textbooks and courses in the United States. IN doing that, I left out a third approach --- the approach of radicals writing in a tradition that dates back to Karl Marx. Though there are certainly some economists teaching in the US who are “radical economists” (I was one myself before I retired), for the most part their views are ignored at best and vilified at worst. I choose to restrict the current discussion to the differences between right-wing so-called “free market” economics and the more interventionist economics that builds on the tradition of Keynes. Readers should, however, be aware that there is this very different approach out there, even if it is not understood by most Americans, including most American economists.)]
Confining ourselves to the differences between the two mainstream wings of the economics field in the US, the short-hand version of the issues usually boil down to how much government intervention into so-called “market” of “mixed” economies such as the United States, Great Britain and the western European countries (and Japan) is appropriate. Those who lean towards Greenspan (on the right), usually start with Adam Smith and his book, An Inquiry Into the Nature and Causes of the Wealth of Nations, a book considered the first full length treatise on economics.
Smith is revered by those who support minimal government intervention into the economy because he denounced the mercantilist rules and regulations imposed on businesses and individuals in his day. However, that understanding of Smith presents a very narrow reading of what Smith wrote. He argued that were some absolutely essential roles for government. The most prominent was, in his words, “to provide for the common defense.”
Thus, the United States and other so-called market economies have government Departments of the Defense with their sub-categories, the army, navy, etc. Today because of the COVID-19 pandemic, it is essential that we widen our conception of national defense. The virus is as deadly as the shooting wars our military has had to fight in the past. Thus, it is essential that there be national coordination of the various steps necessary to fight that virus.
I have been very critical of the Trump Administration’s response to the pandemic. The first major error was the attempt to play down the danger of the virus. The Administration was unwilling to support national preventive measures because they damaged the so-called “great economy” that was going to be the basis of Trump’s reelection campaign. When the stock market tanked in April and the unemployment rate shot up to 14%, the Trump Administration attempted to APPEAR to be taking bold action. However, they were afraid to take on the responsibility for the national coordination of measures to slow the spread of the disease --- so they left it all to the states.
It is ironic that if the Administration had left it to the scientists to devise a strong national policy of containment of the virus, the economy would have suffered a few months of decline but once it reopened there would have been much fewer cases. With the caseload controlled (as occurred in most advanced countries in the world) the economic recovery might have been stronger and longer lasting and the Trump Administration might have been able to celebrate how successful they had been. Arguably, this would have helped Trump get re-elected. Instead, the administration pushed for early re-openings of the various states and pinned their hopes on a quick discovery of a vaccine. As the economy began to recover during the summer, they hoped that progress on the vaccine coupled with an improved economy would lead people to vote Trump in again. It almost worked. Luckily for us and the world it didn’t.
What does seem to have worked was the provision of both research funding and promised bulk purchases of successful vaccines. These incentivized private companies to work rapidly to develop an effective vaccine. Those expenditures were clearly within the role Smith cited – providing for the common defense. However, it is important to note that developing the vaccine is only the first battle in a long war. Virtually universal vaccination is the end game.
Here is where the refusal of the head of the General Services Administration (GSA) --- a political appointee named Emily Murphy --- is putting a criminal roadblock in the way of the incoming Biden Administration. During this period of transition it is essential that the new Administration be able to understand the strategies of the Trump Administration as it prepares to roll out the vaccine so that it actually gets used. Efforts begun in December need to be continued after January 20, 2021.
According to the Presidential Transition Act of 1963, the GSA administrator officially determines the "apparent winner" of a presidential election. Once that determination is made, the President-elect gains access to federal agencies and transition funds. This year, access to the federal agencies that are putting together the plans to subsidize the mass production, distribution and delivery of the vaccines approved by the FDA will be essential for the Biden Administration. Asked about the costs of the GSA’s failure to sign off on Biden’s victory, the President-elect was stark in his judgment: “People may die if we do not coordinate.”
Why? Because plans to mass produce the vaccines, plans to transport it to distribution centers and plans to make sure the population is vaccinated exist within the Trump Administration and Biden’s team needs to know those plans. Failure to coordinate would force the Biden administration is scramble to learn (and perhaps modify) the current Administration plans after January 20.
This is where popular outrage needs to come in. People may remember that, during the summer, when it became apparent the Postmaster General DeJoy was sabotaging the ability of the Postal Service to deliver absentee ballots in a timely matter, there were demonstrations outside his home and he was hauled before Congress to explain himself. It is my hope that if Murphy continues to refuse to sign off on opening transition funds and access to current officials for the incoming Biden Administration, such demonstrations (and even hearings) will follow swiftly. As Biden warned, every day of delay will add to the death toll.
Michael Meeropol is professor emeritus of Economics at Western New England University. He is the author with Howard and Paul Sherman of the recently published second edition of Principles of Macroeconomics: Activist vs. Austerity Policies
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