Beyer + Boushey

Rebecca sits down with Rep. Don Beyer, Vice Chair of Congress’s Joint Economic Committee, and Heather Boushey of the Washington Center for Equitable Growth, for the latest on where things stand on the federal COVID response. Subscribe to Off-Kilter on iTunes.

Continuing Off-Kilter’s ongoing series on poverty and inequality in the age of COVID19… This week brought the somber news that 2.1 million more Americans filed for unemployment in the past week. This brings the total number of unemployment claims over the last 10 weeks to 40.8 million — more than a quarter of the American workforce.

Meanwhile, 1 in 5 families, including 1 in 3 families with children, are reporting they can no longer afford adequate food.

Against this backdrop, Senate Majority Leader Mitch McConnell has vocally expressed his desire to slow down future stimulus legislation, rebuking House Speaker Nancy Pelosi’s HEROES Act, which would bring much-needed relief to workers and families as well as a next dose of economic stabilization… and to top it all off, this week, President Trump signed an executive order directing meat packing plants to reopen, forcing workers to choose between their paychecks and their lives.

So, for a look at where things stand with the debate over the federal COVID response in Washington, the economic response we need, and to run through some of our listeners’ top FAQ — like, what are automatic triggers and why do we need them? — Rebecca sat down with Democratic Congressman Don Beyer, Vice Chair of the U.S. Congress Joint Economic Committee (and self-described “econ junkie”) and Heather Boushey, president & CEO of the Washington Center for Equitable Growth and author of Unbound: How Inequality Constricts Our Economy and What We Can Do About It.

This episode’s guests:

• Congressman Don Beyer (D-VA), vice chair, U.S. Congress Joint Economic Committee
• Heather Boushey, president & CEO, Washington Center for Equitable Growth

For more on this episode’s topics:

Dig into recent JEC reports on:

• Automatic Support for Americans during the Coronavirus Crisis
• Massive Aid to State and Local Governments Needed to Slow Economic Damage
• McConnell Is Wrong: Forcing States into Bankruptcy Defies Logic
• The Impact of Coronavirus on the Working Poor and People of Color

And find a treasure trove of resources from Heather’s team at WCEG on COVID and the economy here.

TRANSCRIPT:

REBECCA VALLAS (HOST): Welcome to Off-Kilter, the show about poverty, inequality, and everything they intersect with, powered by the Center for American Progress Action Fund. I’m Rebecca Vallas.

Continuing our ongoing series on poverty and inequality in the age of coronavirus, this week brought the somber news that 2.1 million more Americans filed for unemployment benefits in the past week. This brings the total number of unemployment claims over the last 10 weeks to 40.8 million, more than a quarter of the American workforce. Meanwhile, one in five families, including one in three families with children, are now reporting that they can no longer afford adequate food per the Federal Reserve. Against this backdrop, Senate Majority Leader Mitch McConnell has vocally expressed his desire to slow down future stimulus legislation, rebuking House Speaker Nancy Pelosi’s HEROES Act, which would bring much-needed relief to workers and families, as well as a next dose of economic stabilization. And to top it all off, this week, President Trump signed an executive order directing meat packing plants to reopen, forcing workers to choose between their paychecks and their lives. So, for a look at where things stand with the debate over the federal COVID response in Washington, the economic response we need, and to run through some of our listeners’ top FAQ — like what are automatic triggers, and why do we need them — I’m so pleased to be joined by Congressman Don Beyer, Vice Chair of the U.S. Joint Economic Committee and self-described econ junkie, and Dr. Heather Boushey, President and CEO of the Washington Center for Equitable Growth and author of Unbound: How Inequality Constricts Our Economy and What We Can Do About It. Thanks to you both for taking the time to come on the show.

CONGRESSMAN BEYER: Thanks, Rebecca. It’s fun to be on here with Heather, also, Dr. Boushey.

HEATHER BOUSHEY: Oh, well, Congressman, it’s a treat. And Rebecca, it is always a delight to be on your show. I’m so glad that you’ve invited me back. So, thank you.

VALLAS: Well, Congressman Beyer, I should tell you, I was actually inspired to do this episode by learning that you’ve been doing weekly calls with economists. And so, the Off-Kilter team actually thought it would be fun for listeners to get to hear from both one of the economists that you’ve been talking with who is also one of my favorite guests, Heather, ever to have on the show. And from you, Congressman, as one of the members of Congress who’s most deeply engaged with tying nerdy economic analysis to policy through your work with the Joint Economic Committee. So, I’m really thrilled to do this. And I’d love to sort of start off with you, Congressman, to bring us up to speed. Where do things stand in Congress? I mentioned Mitch McConnell has said that the House’s activity around the next COVID relief package is DOA in the Senate, despite the harrowing unemployment numbers and rising hunger and more. What’s going on in Congress?

BEYER: Well, Rebecca, first, it’s wonderful to be on here. And when you mentioned all the calls that we’re doing through the Joint Economic Committee with these top economists around the country and around the world, it’s the conversation with Heather, not just the one-hour, but our ongoing conversations really at the heart of what’s most important. Because we’re, I would say, I think accurately and certainly sincerely, that the greatest problem we face right now is inequality in America. Inequality of income and inequality of wealth. And Heather, leading the Center for Equitable Growth, is at the very heart of the intellectual and policy thinking about how we overcome that. But in the meantime, what’s happening on Congress? We passed the CARES Act, or the HEROES Act, rather, CARES 2.0, about two weeks ago. Sadly, it was the first of our four or five coronavirus bills that was not overwhelmingly bipartisan. Everything else we’ve been able to do, you know, everybody pulling in the same direction. But here, sadly, the Republicans, with signals from the White House and Mitch McConnell, largely voted against it with one or two exceptions.

It’s a very good bill. The centerpiece is lots and lots more support for state and local government and extension of unemployment benefits and relaxation of some of the rules around the paycheck protection plan and more direct money to families that that are poverty stricken. I spent yesterday morning over at the Arlington Food Assistance Shelter, and that was in my district in Northern Virginia. And the line was endless the entire time I was there of people coming. They’ve gone from serving 3,000 families to 5,000 families in just a couple of weeks, in really a precipitous increase in the families that are potentially going hungry. But the state of play is Mitch McConnell and many of the other Republicans say they want to see how the first money works when it gets out there before they put any more money out there, which is a disaster. Because we see that the first CARES Act, which is now a month old, has taken most of the month to get half the money out. You just can’t pass a bill and get money in people’s hands. It takes a long time, structurally, for the IRS to send the checks, for state unemployment agencies to get up to speed to answer their phones and their emails. And we need to act now so that we’ll be ready for the situations at the end of June and into July and the months to come.

McConnell’s also bragged that he wants to let the states go bankrupt. He’s since backed off on that because our states are looking at oh, I think Governor Hogan from Maryland, a Republican who chairs the national governors, said that states will be $550 to $600 billion shortfall in their budgets over the next year, year and a half. And that then has direct effect on each and every one of us. Rebecca, I could go on and on, but right now we’re at the point where our House leadership, led by Nancy Pelosi is interacting, is going to have to interact with Mitch McConnell, with Steve Mnuchin on behalf of the White House, Chuck Schumer leading the Senate Democrats to try to find some kind of middle ground that the Senate will vote for and that the president will sign that continues to bring badly-needed aid to the American people. If not, the consequences are going to be tragic on a scale that we haven’t seen since the 1930s.

VALLAS: Well, and Heather, that’s, I think, a great place to bring you in, because I mentioned up top we, just had a couple of days ago, got new jobless numbers, the latest jobless claims report: another harrowing report. Would love to have you sort of provide a little bit of a table-setting overview of what we know about the economic impact of the pandemic so far, both for workers and for the overall economy. And to Congressman Beyer’s point, whether the scale of the COVID response that we’ve seen from Congress, or perhaps it’s more accurate to say the response Mitch McConnell has permitted so far, is adequate to stabilize the economy and to head off a long recession and depression, in addition to helping workers in the immediate-term in the ways that are so desperately needed.

BOUSHEY: Yeah. Thank you, Rebecca. And let me start from a place that I think it’s just really important to emphasize a few starting places for where the economy is right now. So first, we are here because of an infectious disease that people can pass without knowing that they have it. And that creates this real challenge for people going out there and engaging in society and in the market and in businesses. And for the health of us all, people and policymakers took these steps to say, “Hey, everybody go home for a while.” And we’ve seen this happen around the world. And yet we’ve seen that in the United States, both the health crisis and the ensuing economic consequences look to be both greater, deeper, more protracted than we’re seeing among our economic competitors. And I think it really speaks to, you know, as the Congressman laid out, that our elected officials see the problem, at first acted bipartisanly, although I would say that the administration didn’t act soon enough on the health front or effectively enough, but setting that aside for a moment.

We are now at grave risk of essentially repeating the errors of the Great Depression, whereby policymakers said, “Well, you know, let’s just see how it goes. Let’s see if the private sector can muddle its way through. Let’s not sort of do too much because we don’t want to overreach.” When in fact, we are on the precipice of something quite disastrous for the U.S. economy if the trends continue in the way that they are now. And so, the unemployment insurance claims, which come out every week, they track how many people who are out of work have applied for unemployment benefits. So, it’s one of the most real-time indicators of how the labor market is faring.

I’m going to make one little sidebar point here. As an economist, typically in recessions, we say, “Oh, the unemployment rate is a lagging indicator,” meaning that you typically see businesses stop spending, GDP go down, all these things happened before the unemployment rises. But because of this unique COVID event, you actually saw all these people go home. So, unemployment rose first, and the other economic effects are following along. And that is actually, I think, a more dangerous situation than policymakers have wrapped their head around because the demand crisis is in front of us. So, as you noted in your opening, we have had over 40 million people apply for unemployment insurance benefits. And for those of you who don’t follow these data, over the course of, you know, day by day, week by week, year by year, back during the Great Recession, as we were tracking these claims each week, we knew it was a really bad week, that things were bad when more than 400,000 people applied for benefits in a given week. That was really the threshold. It’s like, oh, anything above that, we’re definitely in a recession. Normally, you know, COVID, it was about 250,000 people a week. Now, we are seeing millions of people applying each week.

So, this week, we saw 10 times as many people apply than one year ago, and this was the smallest week over the past few weeks. So, you saw the claims jump up right at the beginning of the crisis when everybody was told to go home. And it’s sort of, they’ve remained exceptionally high, but the pace has slowed a bit because now, all these people are already home, as you pointed out in your opening. And each of those people are at home either because they worked in a restaurant or retail or in a tourist destination, you know, where all these things have been stopped for the health and safety of us all .and policymakers quickly said, “Well, we’ll get you these additional unemployment benefits.” But I think what the Congressman is talking about in terms of the delay on Capitol Hill, these benefits that people are applying for that are absolutely critical for families and for the economy and then are our most important line of defense to not having this turn into a Great Depression, we’re at risk of letting them expire in July if Congress doesn’t act. So, just trying to kind of put a little bit of a big frame on this, but it is a very it’s a very difficult moment. And the only thing that can change the path right now is either Congress acting on the economy or the virus magically disappearing. And although I get up every day and just hope that I read in the paper that it’s just gone, that hasn’t happened yet. And I don’t think we can count on it.

VALLAS: I think that’s just such helpful context as we think about all of this. Always kind of a good reminder of how we got here, but also of thinking about why the policy choices that we’re making or not making matter so much, not just in the short-term, but also in terms of determining the long-term trajectory of what ends up playing out here. And I think this is actually a perfect segue way into the FAQ part of our conversation. A lot of this is informed very heavily by listeners and friends of the show asking questions on Twitter and other places, kind of wanting to know more about certain topics that are very relevant that, in some cases, become the kind of buzz words in this moment in the coronavirus economic response debate, but which are actually really worth spending a little bit of time explaining and understanding because they get so much mentioned but might be a little bit complex.

So, top of that list — and Congressman Beyer, this is a big part of why I was so excited to have you as part of this conversation — a total buzz word in this moment that doesn’t get enough attention in the context of policy conversation in mainstream media, but which is really, really, really important for folks to understand because of the role it could play in how effective or ineffective our economic response is, both for workers and for the overall economy, as you were describing, Heather, is something called an automatic trigger. And Congressman, this is a subject you’re particularly passionate about. You’ve been calling on Congress to include automatic triggers in the next relief package. Explain, if you would, what is an automatic trigger, and in the context of economic relief legislation like this, why it’s so important that triggers be included in the next package.

BEYER: Rebecca, you know, I wish I could say I’ve been a fan of automatic triggers all my life.

BOUSHEY: [laughs]

BEYER: But really, I’ve only become just really sensitive to them since the coronavirus kicked in and we started talking to the smartest economists we could find. And from Heather Boushey to [Jason] Furman to Jack Lew to Fed chairs like Ben Bernanke and Janet Yellen, they’ve all said, look, it’s crazy to try to have a political fight every time you want to extend unemployment benefits. If we go back to the Great Recession of ‘08-’09, in the years that succeeded that, when unemployment almost hit 10 percent, they had something like 13 different votes in Congress to extend unemployment benefits. And every one of those was a political catfight. There were political prices to be made and pay offs and just compromises, rather than looking at the economy and letting the numbers drive the policy. So, the notion of automatic stabilizers is when unemployment is unduly high, let’s make sure that there’s extra federal support for the unemployment dollars at the state level and for the individuals. And when it’s low, let’s cut it off. And we can titrate that by state so that —

This is particularly relevant. Picking up on Heather’s numbers, with 40 million people unemployed, right now, it’s one in four working Americans have applied for unemployment benefits. And the Congressional Budget Office says unemployment will be north of 10 percent all of next year, 2021. We’ve got to make sure that the unemployment insurance is in place for them. So, as Heather mentioned, it’s going to run out at the end of July. Our plan would keep it in place all the way through 2021 and even into 2022 for those states where the unemployment was unduly high.

For example, Virginia is doing pretty well right now because we have lots of federal workers, lots of military bases, a big defense industrial base going on. Nevada, on the other hand, is getting killed because it is based so much on entertainment and, you know, very different. And I expect the recoveries to be different in those two different kinds of states too. So, Nevada’s going to need a lot more unemployment insurance help than Virginia will be. And the automatic stabilizers would automatically turn it on for states that need it, turn it off for states that don’t. Let me make, by the way, a conservative argument, a Republican argument. Milton Friedman from the Chicago school back in the ’50s and ’60s talked about how difficult it is to stop government programs because they get built into constituencies. Well, which should appeal to conservatives, here’s a program that turns on when it’s needed and turns off when it’s not needed.

By the way, Rebecca, stabilizers are not limited to unemployment insurance. We’ve been looking at that specifically because of the frightening numbers that we face. But it could be of particular help for food stamps, for SNAP benefits, and for the federal support for Medicaid. Because, again, in times of great economic stress, the number of people turning to Medicaid is going to go up, and they’re going to need more federal help.

VALLAS: And Heather, I’d love to bring you in here to sort of help us make this a little bit more concrete, right? I mean, what you are starting to reference, and Congressman Beyer has been explaining kind of a solution to the problem that we’re staring down the barrel of right now if Congress doesn’t act to adopt automatic triggers like he’s describing, help us understand in the context of unemployment insurance, what is at risk of happening if we don’t see Congress take, at a minimum, further action to extend benefits beyond July in a way that emergency kind of plus ups are currently in place. And I’d love for you, kind of as we continue this FAQ, to kind of explain as part of that how replacement rates work in unemployment insurance. Why do we have a plus up, that famous kind of $600 bump that some unemployed workers are receiving right now, and which some media coverage kind of frames as though it’s like extra generous or something beyond what workers might need? Explain a little bit of how UI unemployment, UI replacement rates work and kind of what’s at risk of happening absent these automatic triggers.

BOUSHEY: Yeah. So, let me just start from the basic point, which is that the reason that so many economists think that automatic triggers are a good idea is because we know what you need to do when the unemployment rate rises. We have 100 years of learning, here in the United States and from other countries, about what happens to an economy when people don’t have the money to go out and buy things, right? Because that’s essentially what’s happening right now. You’ve got all these people who’ve been sent home. Their businesses have been, the doors have been shut. The business can’t pay them. And so, they don’t have income. And so, if they don’t have income, the whole thing, this whole economy thing, kind of comes crashing down. If my employer says, “Well, you know, Heather, because we work in a restaurant, we’re going to have to shut down because of COVID-19.” And I go home, and they say, “Well, we can’t pay you.” And I say, “Oh, OK.” Well, now I can’t buy food. Now, I can’t pay my rent or my mortgage. I’ve got to cancel all my subscriptions, right? It’s a, you know, you can see the flow of consequences from me not having money. And you multiply that by 40 million people in a country that has 320 million people, and that’s a lot of money that is just, that would not flow through the economy unless you gave people unemployment insurance benefits. So, this is our first line of defense. We know this. It’s something we’ve learned a long time ago.

And to some extent, unemployment insurance is what we would call an automatic stabilizer because it is a program that is always there, right? Whenever people get laid off for no fault of their own, they can go and apply for unemployment benefits. Not everyone is typically eligible. You have to work for a certain number of months and you made a certain amount of money and the like. And then typically, you get about 40 to 50 percent of your pre-unemployment wages replaced. Because in a normal moment, in a normal recession or even in a non-recession moment, if you get laid off, we kind of, we don’t want you to, we want you to have some encouragement to try to find a new job. And also, some of your costs have gone down when you get laid off, and there’s some assumption that you’re also saving a bit. And so, having that wage replacement rate of about half of your earnings kind of makes sense. We might want it a little, some of us might want it a little bit higher. But in general, there’s some economic logic there, and it helps people to maintain that basic spending so that the economy doesn’t all just implode while people search for a new job.

The thing is, is that in extreme economic circumstances, deep recessions or in this crisis right now, you’re going to need more benefits. Because as the unemployment rate gets higher and higher, it’s harder and harder to find a job. So, we want to bump up people’s replacement rates, as you said, the amount of their wages that are replaced. Because if unemployment is 8, 9, 10, 15, 20 percent, it’s really not possible for me to get a new job. But the more my money is still flowing through the economy, the less likely other people will be laid off, and the more likely that we’re able to get back on track faster. So, you want to raise that replacement rate. And so, the triggers usually trigger on these higher replacement rates, which is essentially what we’re talking about now.

As you noted, because of COVID-19, Congress said, OK, we’ve told people to go home. We want to give them 100 percent of their earnings so that they don’t have to cut any spending, so that maybe we can have what economists would call a V recession, where you just you go down really quickly, we solve this COVID thing, we can all get back to work. So, you kind of wanted to give them as much money so that the rest of the economy so, while, all the wait staff and the bartenders and the you know, all the people in face-to-face contact went home, they could still spend so that the rest of the people could still keep working if they could do that safely from COVID-19. So, that is the question. And I think, you know, the Congressman’s proposal is to have these extended benefits that either go on for more weeks or are higher replacement, be pegged to what the unemployment rate is, not whether or not Congress feels like voting on a particular package or whether or not we can get the political support in that moment. That’s what we’re really talking about here.

So, to kind of summarize that succinctly, we know in recessions you need to get money to the people who are out of work, the people that are going to continue to spend, because we all are dependent on this cycle of the economy, the flow of funds working through. So, we know that unemployment benefits, aid to the states. As tax revenues fall, the states will stop spending if you don’t support them. These are some of the most important things. And because we know that this spending stops as the unemployment rate rises, you can create triggers so that you automatically increase those programs in bad economic times. And then a trigger off, so that in good economic times, you stop that spending. And as the unemployment insurance does, you increase the taxes, right, so that more people are paying money into the UI system when we’re all employed. And that’s the way it should work: you save money for a rainy day? During the rainy day, you spend it. And that’s really what we’re trying to do here, because we know that these programs work.

I mean, I could just, you know, you aren’t here in my office. You can’t see me today. But there’s piles of reports and papers from the top economics journals, top economists from all over the world that show that this is what we need to do in a recession. And you asked, what happens if we don’t act? And just to make it real for your listeners, if we don’t act, unemployed people don’t have money. They stop spending. Other people lose their jobs. They don’t have money. They stop spending. Other people lose their jobs. That’s what happened in the 1930s. And that is the precipice upon which we are on now, because that’s just the way the economy works.

VALLAS: And that also feels, in many ways, like it’s somewhat parallel in importance and in the kind of number of economists and Democrats in Congress who are screaming from the rooftops about automatic triggers, although not landing on particularly receptive ears with Mitch McConnell or with the White House. And I’m saying that generously. But parallel to that is also the call for state and local aid. And Congressman, you mentioned this actually earlier in our conversation already, the unprecedented budget shortfalls that states are facing amid the pandemic. And you’re among the Democrats in Congress who’ve been calling for federal aid to states and localities to help them weather the pandemic and avoid being forced into bankruptcy, something that Mitch McConnell actually seems to have said and then kind of walked back from as what he thought might should actually happen. What is the picture for state and local governments right now? You started to speak to this, but I would love to hear you really kind of explain why state and local aid is so important to slow the economic damage of this pandemic. That’s something that your Joint Economic Committee has been really focused on of late.

BEYER: Rebecca I think Dr. Boushey put her finger right on the top of the precipice that we are so close right now to having tens or maybe pushing 100 million Americans in really destitute situations if we cut off the money, either the direct payments or the unemployment insurance or anything else. You know, we had a third of Americans late on their rent or didn’t pay it at all last month, which is an unprecedented high. So, one of the places you see this most dramatically is in state and local governments. I mentioned the $550 to 600 billion number earlier. I look at my own little city of Alexandria, Virginia. $800 million budget, and they’re are $100 million short for next year. And that, first of all, what that’s going to mean is that every infrastructure project in America stops, all the ones that are funded by local government, which is basically all of them, and state government. So, no more road building, but not just new roads and bridges and tunnels and infrastructure, but fixing the old ones, because everything wears out. And you just have to look at some of our older cities to see how sad it is when our infrastructure’s allowed to deteriorate.

But then also, there’s the direct workers. They recently called this most recent coronavirus act, the HEROES Act, with it’s almost a trillion dollars for state and local governments. Because that’s the money that’s used to pay firefighters and police and nurses and teachers and Child Protective Service workers and the people that pick up the trash and do the recycling. All the folks that make our communities work that give us the quality of life that we enjoy are basically paid for by state and local government. So, if we bankrupt them or just starve them to death, it’s going to rebound into the quality of our lives almost instantly. Which ironically, is why I feel optimistic about us going forward. And why McConnell, after his foolish”, Let them go bankrupt. Let them eat cake. Let them drink Clorox” has backed off from that. Because he knows his members, the Republican senators and Republican House members, represent jurisdictions that are going to suffer greatly. We will see what magic Speaker Pelosi can work in the coming days. But we need to get as close to that trillion dollars as possible. That, by the way, is the rest of 2020 and most 2021 also, as we begin hopefully to see an economic recovery.

VALLAS: Here’s another FAQ for you, Heather, and this is something that comes up a lot in the mainstream media. I feel like it’s also kind of a big part of econ Twitter almost every time that it does. It seems like almost every day, the White House and/or Senate Republicans float payroll tax cuts as though they are the great panacea to the moment that we are currently living through. Talk a little bit about why payroll tax cuts are actually a pretty poor idea in the current moment.

BOUSHEY: Well, you know, I think that when you think about policy, you need to start by thinking about what is the problem you are trying to solve and what tools do you have at your disposal and what evidence do you have about what works? So, again, the problem that is in front of us is that after decades of rising economic inequality that has left our society more fragile, more susceptible to economic shocks like something like the coronavirus, we now have this situation where you have 40 million people applying for unemployment benefits, employment at highs that we haven’t seen in any of our lifetimes, and the question is a payroll tax cut. So, that is a tax cut on the amount of money that employers pay for each worker on their payroll. So, explain to me how that is going to address either the coronavirus crisis that is really at the root of this economic crisis. I know I keep bringing this into every answer, but I think it’s so important to remember that that is the core of why we are here.

And just one small, sorry, a distraction. But back to what the Congressman said about state and local governments, they are our first line of defense for addressing this coronavirus crisis. That is what the president has said. They are having to make all the decisions. They are supporting all of the families and their communities. They need all of their resources. A payroll tax is going to do nothing to support them, right? It’s not going to do anything to support the people who are laid off. It’s not going to do anything to make sure that we have protective gear so that workers are safer in their workplaces or customers are safer outside in the marketplace. It seems like it would just, for those firms that are fine, right, those firms that still have people on payroll, it would mean they pay less in taxes. OK. So, that’s great. But that’s not where the problem is. And in fact, in doing so, you’re actually then starving the government, you know, in dribs and drabs, of the resources that we need to actually address the crisis.

So, we would do this payroll tax cut and then we quote-unquote “wouldn’t be able to afford” to do things that would actually help people, help families address. I mean, so, you know, it seems to me that our first thing that we should be thinking about is what can we do to make sure that we have testing and contact tracing? And let’s hire a bunch of contact tracers all around the country. The federal government should be investing in that rather than giving tax cuts to employers for their payrolls. I don’t, it just doesn’t make any sense at all. It’s one of those classic cases of a solution in search of a problem. So, I will stop there. I mean, I don’t think I, it’s…there’s just no, there’s no economic logic for it in this particular economy.

VALLAS: A solution in search of a problem for sure. And also, this does seem to be an administration and a set of Senate Republicans who never met a problem that didn’t seem to have tax cuts as the solution. So, maybe not surprising. Here’s an FAQ for you both. And that is that you’ve referenced a couple of times that there’s this kind of push, especially by Mitch McConnell, to say, “Well, maybe we should wait to see if things are working.” What a dangerous idea that is. But at the same time, you’ve got a lot of Republicans pointing to the stock market and trying to use that as some kind of evidence of, well, anything to do with the pandemic with reference to how average families and laid-off workers are feeling. And so, I’d love to hear actually, both of you talk a little bit about some of the work that’s underway among economists like Heather, your team at Equitable Growth, and on the Hill — and Congressman Beyer, you’re sort of part of the team working on this legislation — to really try to measure if what we’re doing is actually helping Americans recover equitably in the wake of the pandemic, and to make sure that we have the data that we need so that we know whether or not the economy has recovered for average Americans, recognizing the stock market is not the economy. And Heather or Congressman, I’m not sure which one of you would like to take that first.

BOUSHEY: If you don’t mind, I would love to jump in on this one first, If you don’t mind, Congressman.

BEYER: Go ahead.

BOUSHEY: I feel just so passionately about this. It is, you know, [chuckles] it is really quite stunning when people look at the stock market and say that’s the economy. Because, of course, the vast majority of Americans aren’t invested in the stock market. They might have a little bit of their funds for their retirement. But for the most part, the vast majority of the money comes from those at the very, very top of the income ladder. Now, that’s not a bad thing necessarily in an economy that is where you’ve seen growth deliver across the income spectrum. But in our society, for over the past nearly half century now, we’ve seen that economic growth has disproportionally benefited those at the top of the income ladder. We’ve seen rising concentrations of wealth. We’ve seen rising income inequality and the stock market and actually, our measure of aggregate economic growth, gross domestic product (GDP) also. So, both the stock market and GDP increasingly only represent what’s happening to rich people. So, it used to be the case when the GDP went up, the vast majority of Americans saw their income rise at about the same rate as that national income. And that was the case in the 1960s and ’70s. So, if you saw the GDP report and it said, you know, initial income grew by 3 percent, everybody across America saw their incomes grow at about that rate. And in fact, rich people would see their incomes grow a little bit slower. Poor people see those grow a bit faster.

Since 1980, since we shifted the way we enforce antitrust, since we shifted the way we tax at the top of the income ladder, since we’ve seen the sharp demise of unions in this country, since we have shifted away from the kinds of social insurance systems that made our economy strong in the middle of the 20th century, as we’ve made all those policy shifts, we’ve actually seen that growth is now really about what happens at the top. So, when you see GDP go up by, say, 3 percent, it is actually only the case that those in the very top of the income distribution see their incomes grow by at least that average, and in fact, see it grow much, much more. And the vast majority of Americans don’t see their incomes grow nearly as much as the average. We’ve become very top-weighted towards those at the top.

There’s actually a little piece of text in the HEROES Act that would support work by the Bureau of Economic Analysis — the entity inside the government that creates the data that we look at to measure national economic progress — that would encourage us, that would get them to disaggregate our economic growth measures so that we would know quarter after quarter, who’s benefiting from growth. And it’s so imperative. And Congressman, I’d like to throw the baton over to you, because I know you’ve been a supporter of this idea. And but, also I know you have thoughts on what the stock market. I’ll hand it over to you.

BEYER: I feel insecure talking about equitable growth in front of you.

BOUSHEY: [laughs]

BEYER: [inaudible]. But I’m heartened that, I’m so pleased about your multi-multi-year effort to get this equitable GDP growth act into place. And there is a milder version of it included in the HEROES Act. We would like it to be even stronger, which would include data sharing from the IRS, anonymized, of course, but to be able to know, based on how much people are making and how fast their incomes are growing. But let me also set the larger stage. First of all, back on tax cuts, on payroll tax cuts, Republicans had never met a tax cut they didn’t love, even those that are pernicious. And the best pernicious example I can think of is the infamous Tax Cut and Jobs Act of 2017, where 83, 84, 85 percent of it went to the top 1 percent. And we saw enormous amounts of this money being used for share buybacks and for dividends, rather than growing wages. And wages grew, other than some of the thousand-dollar gifts that were done one time to employees, there was very little else that came from it. So, my great hope from this tremendous crisis we have is that we actually can build a structure. This forces us to think about the Center for Equitable Growth’s larger ideas about how do we build the economy back better than it was before?

You know, we’re doing all this in an environment that is also just torn apart by the crisis of race. And it’s not just police officers killing Black people: the George Floyd case in Minneapolis. It’s also the fact that there’s an incredibly disproportionate impact of coronavirus on people of color and people at low wage. Our Joint Economic Committee, led by wonderful young economist Kyle Moore did a report on the working class and people of color in the coronavirus that shows the extraordinary disparate impact. By the way, we have a Ways and Means hearing on this, this week, and it happily was very bipartisan to recognize how this has happened. So, if we look at this and say, we’ve got to have a better America coming out of this. So, that means let me just throw out half a dozen ideas, and Heather could add 20 more. A much higher minimum wage. A retreat from shareholder value is the only thing that we value in a corporation. Thinking about co-determination, so the workers have some say in what happens to a company. Much stronger anti-trust laws. We have found that as we’ve rolled up company after company after company, we’ve taken away power from workers. And that then leads to no share productivity. Productivity may increase 10 percent, and the workers’ wages go up 2 percent because all the wealth is concentrated in management and ownership at the top.

There’s so much more that we could do. But this is a wakeup call for us. The great challenge to our democracy right now is the fact that for many, many, many people, maybe a majority of the American people, social mobility is gone, economic mobility is gone, and there’s no American dream. And it all starts with this unequal economic power. And I’m thrilled to be partnered with Heather on looking about how we make this happen in policy in years to come.

VALLAS: And I so appreciate your offering kind of broader context and a broader agenda, because it bears repeating. I think we say it extensively on probably every episode of this show as part of this COVID series, but, you know, the levels of inequality and the levels of poverty and economic instability that are rampant in this country predated COVID, were not caused by the pandemic, but are now on full display in a way that, at least as one silver lining, has the public debate focused on at least some of the types of policies that you two have been lifting up and that many of us have been calling for, long before we ever knew what the coronavirus was.

I would love in the last few minutes that we have — and I wish I could actually talk with you guys all day because there’s many more things we could certainly put in this FAQ list — but I would love to offer you both the opportunity to share any closing thoughts that you have about kind of where things go from here and what key takeaways listeners need to have in this moment about where the debate is and where it should be. And, Heather, I’ll turn that over to you, and then Congressman, you’ll get the last word.

BOUSHEY: Well, thank you. And it’s just, it’s such an honor to share this podcast with the two of you. And thank you, Congressman, for all the work you do on these issues. It’s just a delight. I can’t wait to continue to work with you on these. I’m sorry it’s under such awful circumstances. But I think that the way that you just frontloaded issues around structural racism, issues around inequality, understanding that that is the starting place for how we think about the solutions that we need to propel our economy forward so that we can be the kind of economy that has mobility for all, that is vibrant, that is competitive, and that I will also note, can address some of the environmental sustainability issues that are going to be the next sets of shocks and crises that are going to impact our economy in devastating ways if we don’t think about it in advance. That is the starting place for the question: whether and how inequality affects the economy and what we can do about it.

And I just want to leave us on an optimistic note, which is that we’ve been at Equitable Growth. We’re in our seventh year, and we’ve worked now with hundreds of scholars, funded a lot of research, and there is so much out there that shows us the path forward, and that it starts by thinking about how it is that we can strain inequality at the top, how we create counterweights to concentrated economic power, think about the role of institutions in creating those counterweights. And so, there’s a lot of really good ideas. And it takes leadership, like the Congressman to turn those good ideas into reality. So, I’m optimistic that we can address this.

VALLAS: And Congressman, you’ll get the last word, as I said.

BEYER: I share Heather’s optimism. I have long believed that history has a direction, a positive direction. It’s uneven, and [chuckles] I may not be right. But I choose to believe that. And we have much to overcome. Right now, we have a president who is not only racist, but completely ignores the rule of law. And these firings of the inspector generals in the last couple of days and weeks has been very, very upsetting. And then there’s China and the terrible relationship that we have with the world’s other largest power, who happens to be five times larger than we are in population. You know, I’m a political preacher, so I have to end by saying that ultimately, all these decisions come back to the leaders that we choose, the people that we elect. I don’t mean to be partisan. I’m not saying Democrat or Republican. But please, whoever’s listening, go find the women and the men who best represent your values, work for them, give them money, knock on doors, whatever you can so that we get people with the strongest values that care about the things that you and I care about to change the structure of our economy, the structure of our government, to allow us to grow and to evolve. We’re not going to do with Donald Trumps, and we need a different kind of person. And I hope, by the way, that many of them are Republican because we need really good, thoughtful, strong Republicans too. And with that, Rebecca, I’m so thrilled to be on your show. And fun, really fun and honored to be on with Dr. Boushey.

BOUSHEY: [chuckles]

VALLAS: It’s a real pleasure to get to do this with both of you. And I really appreciate you taking the time. Please, just a shameless plug for our listeners to check out the nerdy syllabus page, which has a bunch of stuff written by the Joint Economic Committee staff, the amazing folks that work with Congressman Beyer and others to generate the analysis that helps to inform policy decisions, or should inform policy decisions, being made on the Hill, as well as a number of reports and resources from the Washington Center for Equitable Growth. I appreciate both of you for being such important and leading such important platforms for educating the public and the media and policymakers at this critical juncture.

Heather Boushey is the President and CEO of the Washington Center for Equitable Growth and the author of Unbound: How Inequality Constricts Our Economy and What We Can Do About It. And Representative Don Beyer represents an area of Northern Virginia that includes Alexandria, one of my favorite spots of Virginia. He’s also the Vice Chair of the U.S. Joint Economic Committee. And I think every time I talk with you, Congressman, I’m going to have to remind you that you call yourself an econ junkie because I love that. Thanks to you both for taking the time.

BOUSHEY: Thank you.

BEYER: Thanks, Rebecca.

VALLAS: And that does it for this episode of Off-Kilter, the show about poverty, inequality, and everything they intersect with, powered by the Center for American Progress Action Fund. I’m Rebecca Vallas. The show is produced by Will Urquhart. Transcripts are courtesy of Cheryl Green. Find us on the airwaves on the We Act Radio Network and the Progressive Voices Network, and say hi and send us your show pitches on Twitter @OffKilterShow. And of course, find us anytime on iTunes or wherever you get your podcasts. See you next time.