Three-quarters of a year into 2020, let’s all pray that the end of Covid-19 is mercifully within view. Great progress is being made on fast-tracking a vaccine, and once it is readily available, mass immunizations can begin, hopefully putting this scourge behind us.
Let’s hope, too, that the nation can make some real progress in race relations. Everyone should want peace in our minority communities, with better relations between police and the public they are sworn to serve.
But even after Covid-19 is defeated and law and justice advanced, there will remain a huge challenge to America’s leaders. Despite the mainstream media’s fixation on the pandemic and the unrest across our cities, the long-term test we will face is creating a broad-based and sustainable economic recovery.
Make no mistake, it’s the economy that New Yorkers are especially worried about. A recent poll listed it as their No. 1 concern. That’s not surprising, given that the latest unemployment rate for New York was 16 percent, compared with 10.5 percent for the rest of the country. In New York City the jobless rate was a staggering 20 percent. These are deep-recession unemployment numbers that will strain our state’s economy for the foreseeable future. And they hurt our poorest minority communities most.
How do we climb out of this economic hole? The first rule should be not to dig ourselves deeper into it. At the height of the greatest recession since the 1930s, economists of all political stripes generally agree that this isn’t the time to slap big new taxes on struggling taxpayers and businesses. Instead, over the past few months, Congress and President Trump — along with the Federal Reserve — have pumped several trillion dollars into the economy to keep Americans afloat. That prevented the economy from falling into a second Great Depression.
There’s broad-based agreement in Washington that more economic assistance will be needed to see the nation through the next few financial quarters. The president has indicated that he would support it, and Treasury Secretary Steven Mnuchin has repeatedly signaled he is ready to negotiate a realistic package with Democratic congressional leaders.
This could pump another trillion dollars into the economy, including more help for ordinary Americans to pay for rent and food, and additional assistance to struggling small businesses to keep their doors open and provide desperately needed jobs. For the rest of this year and into 2021, avoiding mass evictions and further losses of small businesses along with their jobs should be priority No. 1.
Americans will also have to decide, on Election Day, what type of economic policies they want to see in Washington for the next four years. Before the pandemic struck, the Trump administration’s lower taxes and regulatory relief had helped produce the highest employment and the best economy in decades. Minorities and women had been especially helped by the rising economic tide.
If in 2021 we take a step back to higher taxes, more burdensome business regulations and pie-in-the-sky boondoggles like the Green New Deal, our economy could end up hobbled for years. If you want to see what damage such heavy-handed energy regulation can do, look to California, where radical green-energy policies have left the state without adequate electrical power to keep the lights on. Rolling brownouts like those that plague third-world countries have become common across California.
Take that ill-considered approach nationwide and the current recession could last until the end of this decade, or beyond. Raising taxes, imposing economically stifling new business regulation and strangling our energy independence with bans on new energy development would dramatically slow the economic recovery. What will be needed instead for the foreseeable future are economic incentives for businesses and individuals to spur growth.
One promising incentive program I’d like to see more widely applied is the so-called Enterprise Zone initiative devised by South Carolina Republican Sen. Tim Scott. This program has broad bipartisan support. It targets tax relief to job-creating investments in some of our nation’s most economically distressed areas, helping lift hard-pressed communities. It should be expanded to cover more of those communities with broader investment incentives, especially for new manufacturing jobs.
Right here on Long Island there are pockets of economic distress that could significantly benefit from an Enterprise Zone program. And leaders in Albany should consider adding state tax incentives in these zones as well to amplify the benefit.
Because the economy needs emergency attention now.
Al D’Amato, a former U.S. senator from New York, is the founder of Park Strategies LLC, a public policy and business development firm. Comments about this column? ADAmato@liherald.com.