John Raoux/AP Photo
Free meals are set out for curbside delivery at a restaurant, April 1, 2020, in Orlando, Florida. Florida residents are having a difficult time navigating the state’s unemployment system during the coronavirus pandemic.
The administration is totally screwing up the process of getting out the money that Congress approved to keep the economy from collapse. State unemployment offices are overwhelmed. As David Dayen reports, the banks that manage the emergency small-business loan program on behalf of the Small Business Administration are treating it as a profit center and taking their time in even inviting applications.
The solution: The federal government needs to stop outsourcing these urgent programs to private bankers and to right-wing state governments that hate social programs. In Florida, where two Republican governors cut unemployment benefits to the bone, as a program for the undeserving poor, the current GOP governor, Ron DeSantis, is now under fire from outraged, laid-off middle-class citizens who can’t get benefits from an understaffed and underfunded system.
In the New Deal era, the federal Home Owners Loan Corporation didn’t work through banks to refinance underwater home loans. The agency hired about 50,000 retail loan officers directly, to save homeowners from foreclosure. Its record was exemplary.
So first, we need to federalize unemployment compensation and hire enough people at the Labor Department to staff it. Second, we should take away the $350 billion payroll protection program for small business from the SBA and the banks. Some combination of the IRS and the Fed could extend these credits directly.
Where would government find qualified people to process these applications? More than a million spring college graduates will have no jobs. They could enter into a crash training program, and be offered six-month or one-year government jobs. Their universities could give them provisional degrees so that they could take jobs as soon as government starts hiring.
By helping promote the recovery, they will be accelerating the day when they can return to the private job market. As the meta lesson of this crisis keeps proving, there are actually things government can do a lot better than the private sector and that Washington does better than government-hating states.
First, of course, this government needs to get its act together. But even Trump has belatedly invoked the Defense Production Act to produce critical medical supplies. Just as time wasted in fighting the virus is catastrophic, likewise time wasted in heading off the Corona Depression.
