Harvard political scientist Robert Putnam argued in “Bowling Alone” (2000) that Americans were spending less time together. Today, Americans aren’t merely alone—they’re not even bowling. Sports, theaters and restaurants are shut down, and the coronavirus is scaring off frequent flyers. This makes for prudent health policy and a brutal business environment.
Rather than pass an indiscriminate payroll tax cut that drip-feeds dollars and doesn’t ensure recovery in battered sectors, Congress and the White House should target the most vulnerable parts of the economy, which often employ the most vulnerable workers—janitors, ushers, baggage handlers, busboys. We propose that the federal government mail to each American household a debit card preloaded with $500 that can be used for services in the “out of home,” experience economy. Call it a “Menu and Venue Voucher.”
The card would have a start date of July 1, 2020, if public-health authorities relax social-distancing requirements by then, and expire a year later. A school trip to a Picasso exhibit, a bus ride to a bowling tournament, or petting sled dogs from a cruise ship in Alaska would qualify. A Netflix subscription wouldn’t. The point is not to make judgments about taste but to restore the nerve to go out.
Every stimulus plan raises doubts. While this plan, which would cost $64 billion, would not immediately inject cash, it would assure employers and their lenders that a rebound is on the way, so that business owners could receive bridge loans and keep going through the crisis. Targeting industries usually fails because lobbyists who make the fattest political contributions tend to grab the biggest bonuses. In this case, it’s obvious which industries are feeling the most pain. The share price of Invesco’s Dynamic Leisure and Entertainment ETF (PEJ) has, as of Wednesday’s close, plunged by 56% since Feb. 19, nearly twice as much as the S&P 500’s 29% decline over the same period. The same activities targeted by health officials should be beneficiaries of this fiscal offset.
This program wouldn’t be difficult to administer, and there are precedents. During the 2007-09 recession, Taiwan sent coupons to its citizens, which spurred buying during a worrisome time. In the U.S., health savings accounts often issue debit cards for consumers to buy medicines and treatments. The food-stamp program now uses a debit-card equivalent, too. What if some clever person began buying up the Menu Venue Vouchers? That would be fine, for families that sell their vouchers would be choosing to spend that money on priorities they deem more urgent.
Some economists might warn that such a program would kindle inflation in 2021. But we’ve been listening to such cries since 2009, with nary a blip, while as of Wednesday the yield on the inflation-protected 10-year U.S. Treasury note implies inflation of only 0.63%. And industries in the experience economy expanded capacity during the economic recovery, with sleek new hotels and cruise ships coming on line to accommodate demand. It’s highly unlikely they will be in a position to jack up prices, even with vouchers in place.
The government’s first priority is getting testing, treatment and aid to hospitals and clinics. Still, the coronavirus threatens not only our bodies, but the body politic. This proposal would aid those parts of the economy that can lift spirits and bring us closer together once the need for social distancing has passed. It would give Americans something to look forward to. Let’s make America fun again and save jobs while we’re at it.
Mr. Buchholz is former White House director of economic policy and author of “New Ideas from Dead Economists.” Ms. Buchholz is director of marketing strategy and special projects at Princess Cruises.
In the men’s room at the Windsor Theater in Hampton reads a sign instructing employees to wash their hands. Then under that it says, “Actually, it is probably a good idea for everyone to wash after using the bathroom.” Wise advice.
The media and politicians are going nuts over this coronavirus. The media is supported by donations and sales of advertising. There would be no media if the news were nothing but stories like “Fritz skins his knuckles installing a thermostat.”
Politicians would not have voters bowing down in adoration if they didn’t promise to save us from some catastrophe.
Winston Churchill, consumer of a quart of whiskey per day, put it well: “Never let a crisis go to waste.”
An average of 389,000 people die every year from the flu. So far 4,627 have died from coronavirus (Covid-19). In China there have been 3,200 deaths out of 1.4 billion people. It is rare to see a male over 12 years old in China who doesn’t smoke. Satellite images of China show drastic reductions in air pollution since industrial production ground to a halt in response to the virus. Now they’ve closed all the emergency hospitals there because of a lack of new cases.
The elderly are most susceptible to respiratory infections, and scams. In reaction to the “pandemic,” there have been endless calls for government “stimulus,” to boost an economy at a standstill.
But already the M4 money supply is growing at 6.9% annually. “So what?” you might say. Money supply or interest rates are tools used to manipulate the economy. They both do the same thing.
After years of “stimulating” the economy in order to reward donors, it has finally come to a point where the delusion is running out of gas. The low unemployment and strong economy was built on feet of clay produced by easy money. The easy money was conjured out of thin air. The devaluation of savings that resulted from an increased supply of money was finally coming back to bite people who worked hard and relied on interest and investments for retirement. I’ve talked to several retirees who had relied on disciplined savings plans who now fear they will be seeking employment in their eighties.
The rules have not changed so much, as the reality is slapping them in the face. I have friends who took the Honor Flight to Washington D.C. They were accompanied by caring helpers who gushed about their service and how much they were appreciated. Yet all along these veterans were systematically being drained of their hard earned wealth by the 2% inflation and stability mandates of the Federal Reserve. As new crises threatened, inflation was used to make spending seem more urgent than saving.
The seriousness of the coronavirus can’t be denied, especially by the 21 families of victims in one nursing home in Washington where, by the way, multiple violations of sanitation rules had been found in the past. But in the big picture consistent rules of hygiene which prevent a broad spectrum of illnesses would be more effective than the panic that is ruining livelihoods everywhere.
An economy in imminent danger of collapse has been toppled by a bug.
Franceska Mann, arrived at Auschwitz in 1943, when ordered to strip, she did so provocatively, distracting the guards. She grabbed the roll call officers gun and shot him dead, then wounded one more before other prisoners joined her rebellion, before all being shot dead, 1940’s
Regarding your editorial “The Coronavirus ‘Stimulus’” (March 4): Reducing the fed funds rate to 1% will do nothing to stop the spread of the coronavirus but will severely increase the pain already suffered by millions of senior Americans. They saved their money, as they were taught to do in the 1930s and ’40s, bought only what they could pay for during their earning years, and foolishly expected to live off their savings in their old age.
Today saving seems to be a hopelessly outdated concept, considered obstructive to the economy by the academics at the Fed. Thriftiness was considered a virtue by most of my generation. We survived the mistakes of our government leaders that led to the Great Depression. We stood in line outside banks with our parents, hoping the latest government mistakes wouldn’t make our savings vanish, and worked and saved during the privations of World War II.
We paid for what we bought and kept our savings in the most secure investments available. Now we can thank the academics at the Fed for an economy that will give us an income of less than $1,000 if you have $100,000 saved.
The attention of our nation is focused today on the election in November. For my generation there are no candidates, or even a political party, that seem capable of guiding an economy that protects the life’s work product of the generation that fought the wars, both military and economic, went without and paid their own way while paying for “entitlements” for the millions who have inherited what we produced.
David F. Sweeney,