The 2020 economicrescue has skimmedfrom the
responsestoboththeGreatDepressionandtheGreat
Recession.Butsofarit’sbeenheavilyslantedtowardthe
latterapproach,astheFedhasslashedinterestratesto
zeroandcommittedmorethan$2trilliontokeeprates
lowandcreditmarketsliquid.The$2trillionCARESAct
aimstoreplaceincomeandspendingforthose92%of
Americansundershelter-in-placeordersuntilthecri-
sispasses.MostofthatCARESmoneywillreplacelost
wagesforemployeesofsmallandmidsizebusinessesfor
a shortwhile;therestwillcoverlostrevenuefora few
largerbusinesses.There’salsomoneygoingtostates,
cities,andhospitals.
Theresponsehasbeenmoresubstantialthanwhat
thegovernmentdidduringthe2008-09crisis.Butit’s
stillnowherenearenough.
We shouldbe usingRFC-like partnershipsto
buildtechnologicalplatformsandinfrastructure
forthefuture.Thelistofpotentialareasis long—
butherearea fewideas:
①Climateremediation
Nineofthe 10 warmestyearsinrecordedhis-
toryhaveoccurredsince2005.What’sbeen
missingfromtheattemptstoaddressglobal
warminghasbeena comprehensivesearch
fora hugetechnologicalsolutiontoremove42
Bloomberg Businessweek May 4, 2020carbon dioxide from the atmosphere, or perhaps
a series of smaller ones that cumulatively have a
substantial impact. Accelerating this process could
have implications for avoiding what might very
likely be humanity’s next great crisis.
② Sustainable energy
One reason for modest hope in the
looming climate crisis has been incre-
mental improvements in the efficiency
of wind and solar energy, along with
battery storage improvements. Whatwe
need to make this energy technology much more
efficient would be a Manhattan Project of sorts,
aiming for fundamental breakthroughs in both the
science and the technology. The resulting cheap,
abundant energy would help reduce future carbon
emissions and pollution—and lower costs for ener-
gy-intensive businesses.
③ Infrastructure
The U.S. once had the world’s leading
roads, airports, and electrical grids.
We have foolishly allowed these to
fall into disrepair and decay. This low-
ers the quality of life, hurts economic
growth,and puts America at a disadvantage to
rising powers in Asia. The solution is to create a
Reconstruction Infrastructure Corp. to prioritize
projects for repair and rebuilding. Fund it with
50- to 100-year bonds issued at 2%. Infrastructure
is more than a make-work program; it’s the plat-
form that allows businesses to operate efficiently.
④ Smart roads
Speaking of platforms, it’s
only a matter of time before
self-driving cars are here.
Greater traffic capacity, faster
commutes, and reduced
automobile fatalities will be the happy result. But
whether this happens in a few years or, more pes-
simistically, a few decades is unclear. What would
speed things along would be a uniform set of
radio-frequency devices built into roads and vehi-
cles to allow safe navigation regardless of weather
or traffic conditions. A public-private partnership
could (among other things) create a set of standards
that allows different vehicle manufacturers to inter-
act safely on the open road. CONE, PANEL, STETHOSCOPE, THERMOMETER: GETTY IMAGES. ASTEROID: COURTESY NASA. CAR: COURTESY TESLAdramatically from rising prices. The Fed deserves credit for
some of that increase in asset values.
Another enormous windfall went to those employees who
had lots of company stock options. From October 2007 to
March 2009, the S&P 500 fell 56%. Many companies, includ-
ing Apple, Starbucks, and Google, allowed their employees
to trade in worthless stock options for new ones with much
lower strike prices in 2009. The biggest beneficiaries were
the executives who held the lion’s share of issued options.
As the market and the economy recovered thanks in part to
the Fed’s monetary efforts, these options became deep in the
money. Tens of millions of dollars in risk-free profit were cre-
ated for some already wealthy people.
While the financial sector recovered, Congress did little
to help the rest of the economy. In the past, when house-
hold and private-sector demand collapsed, the government
stepped in to replace it by spending more and cutting taxes.
For reasons people still debate—ideology? deficit concerns?
partisanship?—the fiscal response in 2009 was sorely lacking.
As people began to find new jobs, they were often worse
than the ones they’d lost during the crisis—with lower wages
and fewer (if any) benefits. Without a substantial fiscal stim-
ulus, the good middle-class jobs associated with large public
works projects or civil service employment never materi-
alized. Gains from the economic recovery never “trickled
down” to the working classes.