Guy Raz, of NPR’s Live with Guy, talks with Sinek on why he is hopeful that businesses who prove resilient and sustainable during this pandemic will stand the test of time.
Month: April 2020
US Response To COVID Reveals The Country Reagan, The GOP And The Democrats Created
Workers are compelled to go back to work, often for minimum wage. Small businesses cannot get the loans they need because big corporations scooped them up. Hospitals don’t have enough protective equipment for nurses, and sick people cannot get the tests they need. Unemployment benefits, paltry by design to “encourage” (minimum wage) work, doled out reluctantly by states who have archaic IT, are delayed and denied.
These failures are the result of a 40 year bi-partisan agreement that as former GOP President Ronald Reagn put it, “government is the problem,” and as current Democratic Speaker of the House said, “we only want as much government as we need.”
So under limited government, who is doing well?
Professionals, mostly white, work from home in relative safety. The wealthy escaped to their islands, the Hamptons, and Lake Tahoe. Sheltering in place celebrities suffer from lack of attention, so they showcase their talents and their security. The Wall Street Journal assures readers COVID_19 is not much worse than the flu.
Except, of course, if you are Black, in which case fatality rates are double, or more, compared to Blacks’ proportion of the population. Except if you are obese, or diabetic, or over 60, or have hypertension. Latinos, including undocumented people, make up a large portion of workers considered essential, and are dying without, in some cases, basic treatment. These groups add up to a significant portion of our country.
In sum, if you an agriculture worker in the fields, or in warehouses and grocery stores, or as a healthcare professional or now in retail that is allowed to open, because the US social safety net is so frayed and weak, decisions are made out of financial necessity that should be made based on individual or public health. But if you can’t get benefits, if your business is shut out of loans, or if your state cannot provide timely unemployment benefits, what choice do you have? Governors can’t easily correct these faults during a pandemic — and clearly many don’t want to.
To paraphrase David Bryne, “How did we get here?”
Through a combination of neo-liberal, anti-government policies that buttressed false notions of social value and individual worth. In the US acutely since 1980, money is the metric of what’s good. That is how Elizabeth Rosenthal described the US healthcare system in which money has become the metric of good medicine. “Greed is good,” was either a parody of the 80’s or a precise description. At the least, traders, corporate raiders, and investment bankers are highly valued, and until last month, much more valued than say, Registered Nurses.
Under capitalism, labor is valued to the extent it produces profit. A meritocracy of money will lift up not all boats, but those who “earn” the most. That’s the opposite of assigning social value to labor based on it’s worth to society. In the Reagan world where there is no society, only individuals, and government is the problem, the private sector is all and their profits the gauge of success and worth. In the Democratic version, public-private partnerships are the preferred social program, so we “means-test,” to make sure only those who “need” help get it. The result is lower taxes, lower wages and greater inequality.
The COVID pandemic threatens the foundation of this bi-partisan approach. Suddenly, lower paid workers are essential. It’s not high-tech and specialty drugs that stop the virus, but basic equipment and public health practices, ultimately by the publicly-funded development of a vaccine.
Imagine if businesses did secure their loans in a timely fashion, and all workers had already received their first $2000 and on May 1st will get their next payment. Unemployed workers — gig or otherwise — were immediately covered. And all healthcare services were guaranteed — no out of pocket costs, no sign-ups — already paid, already covered.
Imagine the security. Imagine the peace of mind.
We would not be debating whether to “open the economy,” because we are taken care of so we can consider first how to protect our health. Rather than paying workers more — a classic “money is the metric” response, we would provide a completely safe workplace and pay workers a living wage every day. Front line workers would be considered essential every day, because humanity, social value and community would be the new metric of success.
Health Crisis Has Now Become A Wealth Crisis
Economics is not a cult. It is not a set of definitive, unchanging rules. It is not a religion. There is no creed. There are no believers and there is no dogma. While there are clubs or factions, membership of those is optional. At its core, economics is the art of the possible. It is the study of a complex system that is never at rest, a dynamic and adaptive system of enormous energy and potential. It evolves rather than grows or contracts.
The economy is like an immune system, dealing with new dangers, learning on the job and constantly acclimatising. Despite what most economists say, there is no such thing as equilibrium. A moment’s thought would tell you that an economy in equilibrium is a ludicrous notion.
Economic policy comes with a box of various tools to be used depending on circumstances.
Right now we are faced with the spectre of a once-in-a-lifetime pandemic, driving us into lockdown and a recession which could lead to a depression unless we replace shibboleths with hard thinking. As Van Morrison might say, there is “No guru, no method, no teacher”. When faced with a crisis like this, every policy reaction is possible. Nothing can be ruled out.
We are only at the end of the beginning. We are now going into phase two, when concerns about national and individual health, though still central, give way to concerns about national and individual wealth.
In a crisis the first thing to do is define reality, not as we would like it to be, but as it is. Then you see what policy tools are available.
Our reality is that the economy has been shut down not by debts, spending, a property bubble, too much lending or bad policy, but by a virus. And we don’t know how long it’s going to take to be free of this curse. Some 600,000 are on the dole and national income is set to fall by at very minimum 10-15 per cent. Tax revenues are collapsing and State spending is rocketing. Most retail and hospitality businesses will struggle to reach 40 per cent of last year’s revenues. The summer as we know it has been abandoned.
Prevent bankruptcies
Therefore, the primary objective should be to keep as many businesses – particularly small businesses – afloat. We must prevent bankruptcies, which prompt defaults, which are contagious. Unless we do this, we will face a raft of bad loans in 2021-22, crippling the banking system once more. The banking system has a huge interest in saving its own loan book now, keeping small business solvent.
The second objective is to ensure that the pandemic expenditure does not lead to a spike in debt-GDP ratio, a rise in interest payments or an austerity budget being introduced over the next couple of years. Austerity budgets affect the poor most because the poor depend on government most. There is no reason for an austerity budget if we deploy all the economic tools at our disposal.
How can we achieve these two objectives?
All roads lead to the Central Bank. The Government uses the Central Bank as its clearing house; it provides overdrafts when taxes fall short and revenue shoots up. It does this by crediting the government’s account.
The European Central Bank (ECB) has said it will do “whatever it takes” to save the European economy and the euro, meaning the Irish Central Bank has a green light to act as it sees fit.
The ECB has shown itself to be extremely flexible in a crisis. This is its second such scenario and last time (after it dumped the tragic Jean-Claude Trichet), Mario Draghi tore up the rulebook and used the central bank’s printing press to buy government debt and corporate debt in the secondary market, to save the euro.
Now its current boss Christine Lagarde needs to keep the free money flowing. The ECB has made €750 billion available to finance state spending, and there will be more where that came from. One of the Central Bank’s jobs is to “magic up” money, and the Irish entity has the power to do so.
Print money
Can I let you into a secret? It costs nothing to print money or credit every business account with a zero – or two for that matter. This many seem odd to you, but this is the great trick of monetary economics. In the wrong hands at the wrong time, such as in Zimbabwe, a powerful central bank can destroy a country; but in the right hands at the right time, it can save a country.
We should print money and credit business accounts until every business has enough money to make sure it survives the Covid-19 shock.
There are no catches. This is “helicopter money” that goes into people’s accounts directly without going through the cumbersome banking system. It is quantitative easing for the people. When the problem is too little money, more money solves it. Who doesn’t understand that?
The Government’s account should be similarly credited, so that State expenditure doesn’t raise debt ratios, interest costs or demand austerity in the future.
And if the “inner accountant” in you gets uncomfortable with this free money idea, the State could issue a perpetual bond to pay for everything. A perpetual bond is never repaid. There could be an interest rate paid, but this should be close to zero.
If the Central Bank undertook to buy it and provide infinite liquidity, the financial market would follow suit and use it as a proxy deposit. The accountants satisfy their demand for credits and debits, the Government issues a perpetual IOU, and we chill out and wait for a vaccine.
It’s that easy, and it’s free. So why isn’t it being done?
Easy answers
You’d be amazed how many clever people hate easy answers. It’s natural to believe these things are complicated, but they are not. In economics, what is complicated is rarely useful and what is useful is rarely complicated. As with many fields, only those who truly understand their subject have the self-confidence to opt for the easy answer.
Should we be afraid of inflation? With 600,000 on the dole and oil prices close to zero, rising prices are not coming any time soon. If the Central Bank is worried about inflation in the future, it can put lending limits on the banks. We know how to stop inflation – it’s deflation that’s the real killer.
I understand why we might fear one institution having such power. However, this is why the world’s central banks aim to behave conservatively in normal times, so that when a crisis comes they have the credibility to act in a one-off temporary fashion to save the economy.
Extraordinary times demand extraordinary action. We are in extraordinary times.
Jeffrey Sachs On How We Must Defend Multilateralism
James Chau of The China Current interviews Sachs on COVID-19, China’s response, and the role of multilateralism in solving global challenges.
Nina Turner Interview On ‘Useful Idiots’
In an interview on Rolling Stone’s Useful Idiots, Senator Turner discusses predatory capitalism in the age of coronavirus and the future of progressive politics in America.
Stuck In The Past On The Climate
If you want to know why young people increasingly despair that the rest of us will leave them without a habitable world, consider the case of Lee Raymond.
At a time when millions are losing their jobs, JP Morgan Chase said this month that 81-year-old Mr. Raymond would be up for re-election to his post as the bank’s lead independent director when its shareholders meet in May, despite the fact that he led a company that has helped cause chaos on a scale hard to even imagine.
The bank said that Mr. Raymond had offered not to stand for re-election, given his age, but that the bank’s board wanted him to retain his seat because “his broad experience” both within and outside JP Morgan was “in the best interests” of shareholders.
And his previous outside experience?
He was the chairman and C.E.O. of the oil giant Exxon from 1993 to 1999 and of Exxon Mobil from 1999 to 2005, years when it helped pioneer corporate efforts to create doubt about climate change. Even though, according to internal company memos, the company’s own scientists knew that global warming was very real and very dangerous, and even though Exxon started doing things like safeguarding its infrastructure projects against the sea-level rise they knew was coming, it didn’t tell the rest of us.
Instead, with its peer companies, Exxon helped build the expensive architecture of deceit and disinformation that brought us 30 years of phony debate about whether climate change even existed.
Exxon Mobil has said Mr. Raymond’s statements on the climate have been largely misunderstood. But he seemed quite clear about the subject in a 1997 speech he gave to leaders at the World Petroleum Congress in Beijing shortly before the Kyoto climate talks. His remarks were summed up by Bloomberg News this way: “First, the world isn’t warming. Second, even if it were, oil and gas wouldn’t be the cause. Third, no one can predict the likely future temperature rise.”
Indeed, he told the conference, the earth had been cooling in recent years. Even if the scientists were right about the greenhouse effect, he continued, “it is highly unlikely that the temperature in the middle of the next century will be significantly affected whether policies are enacted now or 20 years from now.”
Which helps explain why we’ve just lived through the five warmest years on record, and 2020 seems certain to join the list.
That epic misjudgment — and his company’s efforts while he was at the helm to sow doubt and mislead about global warming — didn’t cost him his seat on the bank’s board, which he has held for 33 years. Instead he fit right in — as the annual “Banking on Climate Change” reports from the Rainforest Action Network make clear. JP Morgan has become the world’s biggest lender to the oil and gas industry, providing over a quarter-trillion dollars in the years since the Paris climate accords were signed.
Normally a shareholder vote would be pro forma. The last time around, Mr. Raymond got nearly 94 percent support. But maybe not this year.
In recent months, Wall Street seemed to be reaching a tipping point on climate change. One big institution after another began issuing position papers outlining their concern. Laurence Fink, founder and chief executive of BlackRock, the world’s biggest asset manager, wrote in his annual letter to C.E.O.s that “climate change is almost invariably the top issue that clients around the world raise” with his staff. The company promised to use its outsize shareholder power to vote against management teams not making fast enough progress on climate change. Mr. Raymond would seem to be target No. 1 for that cause.
JP Morgan has recently made limited moves in the right direction, saying it would end loans to some fossil-fuel companies and wouldn’t finance new oil and gas projects in the Arctic. But as I said at the time, those moves struck me as “weak beer.” They still do.
In a recent speech in Florida, Jamie Dimon, the bank’s chairman and C.E.O., said: “Climate is a serious issue. But even if you don’t believe it all, sitting here as a human being, as a risk manager, why take a chance on a catastrophic outcome? And there are potential catastrophic outcomes. Most of Florida will be gone in 30 years.”
So as a risk manager, why would Mr. Dimon want the former head of a company that helped lead climate denial efforts to remain on his board?
That’s really the question before shareholders.
Ben Cushing, a Sierra Club energy campaigner, said that “tens of thousands of people have written” to JP Morgan urging that Mr. Raymond not be re-elected to the board. And they’re beginning to find powerful allies.
On Wednesday, the New York City comptroller, Scott Stringer, announced that he had filed a letter to shareholders with the U.S. Securities and Exchange Commission to urge them not to give Mr. Raymond another term on the board. In the hours after Mr. Stringer’s announcement, New York State’s comptroller, Thomas DiNapoli, and Pennsylvania’s treasurer, Joe Torsella, announced they were joining the effort.
“We must address the financial and climate risks to JP Morgan associated with fossil fuels now because the city workers who depend on our pension funds for their retirement security cannot afford for us to wait,” Mr. Stringer said in a statement. “We are urging shareholders to vote ‘no’ on Lee Raymond because his long history in the fossil fuel industry and excessive tenure on JP Morgan’s board render him unable to fulfill his fiduciary duty as an independent public company director for long-term investors.”
It seems hard to imagine that in this dangerous new world — symbolized most recently with Australia on fire and now with many cities on lockdown — that we’d just keep putting the same people back in charge. JP Morgan Chase’s annual meeting will be held online on May 19. It won’t be quite as important as the election coming on Nov. 3, but it raises the same question: Do we really want to keep doing business this way?
This Earth Day, We Must Stop The Fossil Fuel Money Pipeline
‘Twenty million Americans took to the streets for the first Earth Day in 1970 – 10% percent of America’s population at the time, perhaps the single greatest day of political protest in the country’s history.’
1970 was a simpler time. (February was a simpler time too, but for a moment let’s think outside the pandemic bubble.)
Simpler because our environmental troubles could be easily seen. The air above our cities was filthy, and the water in our lakes and streams was gross. There was nothing subtle about it. In New York City, the environmental lawyer Albert Butzel described a permanently yellow horizon: “I not only saw the pollution, I wiped it off my windowsills.” Or consider the testimony of a city medical examiner: “The person who spent his life in the Adirondacks has nice pink lungs. The city dweller’s are black as coal.” You’ve probably heard of Cleveland’s Cuyahoga River catching fire, but here’s how the former New York governor Nelson Rockefeller described the Hudson south of Albany: “One great septic tank that has been rendered nearly useless for water supply, for swimming, or to support the rich fish life that once abounded there.” Everything that people say about the air and water in China and India right now was said of America’s cities then.
It’s no wonder that people mobilized: 20 million Americans took to the streets for the first Earth Day in 1970 – 10% of America’s population at the time, perhaps the single greatest day of political protest in the country’s history. And it worked. Worked politically because Congress quickly passed the Clean Air Act and the Clean Water Act and scientifically because those laws had the desired effect. In essence, they stuck enough filters on smokestacks, car exhausts and factory effluent pipes that, before long, the air and water were unmistakably cleaner. The nascent Environmental Protection Agency commissioned a series of photos that showed just how filthy things were. Even for those of us who were alive then, it’s hard to imagine that we tolerated this.
But we should believe it, because now we face even greater challenges that we’re doing next to nothing about. And one reason is you can’t see them.
The carbon dioxide molecule is invisible; at today’s levels you can’t see it or smell it, and it doesn’t do anything to you. Carbon with one oxygen molecule? That’s what kills you in a closed garage if you leave the car running. But two oxygen molecules? All that does is trap heat in the atmosphere. Melt ice caps. Raise seas. Change weather patterns. But slowly enough that most of the time, we don’t quite see it.
And it’s a more complex moment for another reason. You can filter carbon monoxide easily. It’s a trace gas, a tiny percentage of what comes from a power plant. But carbon dioxide is the exact opposite. It’s most of what comes pouring out when you burn coal or gas or oil. There’s no catalytic converter for CO2, which means you have to take down the fossil fuel industry.
That in turn means you have to take on not just the oil companies but also the banks, asset managers and insurance companies that invest in them (and may even own them, in the wake of the current economic crash). You have to take on, that is, the heart of global capital.
And so we are. Stop the Money Pipeline, a coalition of environmental and climate justice groups running from the small and specialized to the Sierra Club and Greenpeace, formed last fall to try to tackle the biggest money on earth. Banks like Chase – the planet’s largest by market capitalization – which has funneled a quarter-trillion dollars to the fossil fuel industry since the Paris agreement of 2015. Insurers like Liberty Mutual, still insuring tar sands projects even as pipeline builders endanger Native communities by trying to build the Keystone XL during a pandemic.
This campaign sounds quixotic, but it seemed to be getting traction until the coronavirus pandemic hit. In January, BlackRock announced that it was going to put climate at the heart of its investment analyses. Liberty Mutual, under similar pressure from activists, began to edge away from coal. And Chase – well, Earth Day would have seen activists engaging in civil disobedience in several thousand bank lobbies across America, sort of like the protest in January that helped launch the campaign (and sent me, among others, off in handcuffs). But we called that off; there’s no way we were going to risk carrying the microbe into jails, where the people already locked inside have little chance of social distancing.
Still, the pandemic may be causing as much trouble for the fossil fuel industry as our campaign hoped to. With the demand for oil cratering, it’s clear that these companies have no future. The divestment campaign that, over a decade, has enlisted $14tn in endowments and portfolios in the climate fight has a new head of steam.
Our job – a more complex one than faced our Earth Day predecessors 50 years ago – is to force the spring. We need to speed the transition to the solar panels and wind turbines that engineers have worked so mightily to improve and are now the cheapest way to generate power. The only thing standing in the way is the political power of the fossil fuel companies, on clear display as Donald Trump does everything in his power to preserve their dominance. That’s hard to overcome. Hard but simple. Just as in 1970, it demands unrelenting pressure from citizens. That pressure is coming. Indigenous nations, frontline communities, faith groups, climate scientists and savvy investors are joining together, and their voices are getting louder. Seven million of us were in the streets last September. That’s not 20 million, but it’s on the way.
We can’t be on the streets right now. So we’ll do what we can on the boulevards of the Internet. Join us for Earth Day Live, three days of digital activism beginning 22 April. We’re in a race, and we’re gaining fast.
Quarantine Wisdom Featuring Dr. Cornel West
On this episode of The Michael Brooks Show, West reflects on the state of our political institutions, progressive politics, civil engagement and discourse, and being a revolutionary Christian.
Coronavirus And The Height Of Corporate Welfare
With the coronavirus pandemic wreaking havoc on the global economy, Reich explains how massive corporations are shafting the rest of us in order to secure billions of dollars of taxpayer-funded bailouts.
Jeffrey Sachs On The Catastrophic American Response To The Coronavirus
In the early nineties, the economist Jeffrey Sachs was known as a “shock therapist,” for advising the Soviet Union on its controversial transition to a free-market economy. Since then, Sachs has shifted his focus to poverty alleviation and international development, becoming one of the most visible academics in the world. His book “The End of Poverty,” from 2005, imagined a globe free of the worst forms of destitution; Sachs also attributed misgovernment in much of Africa to poverty, rather than the other way around. (This thesis was much debated by other economists and development experts who were more skeptical about the impact of foreign aid.)
From 2002 to 2016, Sachs was the director of Columbia University’s Earth Institute; he is currently a professor at the university and an adviser to the United Nations. He endorsed Bernie Sanders for President in January and has occasionally advised the senator.
I recently spoke by phone with Sachs about the coronavirus and the challenges that the crisis poses to international coöperation and the world economy. His upcoming book is “The Ages of Globalization.” In our conversation, which has been edited for length and clarity, we also discussed the root causes of American decline, why some poorer countries have so far avoided large outbreaks, and how Donald Trump has failed to meet even the low expectations that internationalists have for the United States.
One dominant theme in the coverage of the coronavirus has been the supposed trade-off between the economy and our health. In a short-term or a long-term sense, do you accept that premise?
The only way to have a viable economy and society is to control this epidemic. So it’s not really a trade-off. The question is how to be effective in controlling the epidemic and driving the transmission of the disease to very low levels. Simply letting the virus run through the society would be unacceptably costly, and that’s why essentially no country in the world is doing that. The real issue is to be effective in the response, and unfortunately the United States has not been effective so far.
Did any lessons you learned working in countries around the world inform your opinion of how to deal with this latest crisis?
There are many aspects of any major crisis that are similar in character, in that they require governments to assess the situation with sophistication, to identify options, to come up with strategies, and to implement them. Crisis management has a lot of common points. The nature of the crisis could be geopolitical. It could be a climate-related shock or a disease.
I would say the core issues are the capacity of political leaders and their inner team, and the capacity of the institutions of governance—agencies, departments, and ministries—to be able to process information in a timely way and to be able to harness expert advice and evidence in a timely way. We live in a complicated world. If you try to wing it, as Trump does, you end up with more than forty thousand deaths. If you want to solve a problem, you have to be systematic about it, and know whom to turn to and how to listen and amass evidence. For politicians, that doesn’t necessarily come naturally, and for our President it doesn’t come at all.
Is there some leader Trump reminds you of whom you’ve worked with?
Trump is the worst political leader I have experienced in all of my professional life, which is forty years of working with governments at a high level. I’ve never seen anything like the narcissism of this man, and here we are, a country so rich in expertise, in resources, in capacities, and yet we’re watching a complete failure of a political response—with a massive loss of life—in real time. It’s quite shocking, because Trump not only does not know how to approach this issue but he blocks those who do.
Something you’ve become known for is this idea that one of the reasons there are bad governments in the world is because of poverty, rather than looking at poverty as the result of bad governance. Is that a fair summary?
Yeah. That certainly is one part of it, absolutely. Politics comes in many shapes and forms, and I was arguing that in many poor places you have potentially high capacity to address problems, except that the resources aren’t there for that. So the argument was that helping poor countries could actually accomplish something, because what they most fundamentally lacked was resources.
You have just finished saying that Trump is the worst leader you’ve ever seen. And we are seeing leaders all around the world, even in rich countries, handling this pandemic disastrously. These are countries with immense wealth, with immense scientific knowledge, and immense resources, and the governance is still in many cases atrocious. So does that make you think at all differently about your theory?
Well, my point was that the quality of governance is not intrinsically linked to one’s G.D.P. per capita, and that a poor place, if it had more resources, could often accomplish a lot. And I’d say the converse is that a rich place that’s badly governed accomplishes very little. So it’s consistent with that idea that you don’t simply say rich means good governance and poor means bad governance. That actually was my point fifteen years ago. It remains my point today—that here we have rich countries but their political systems are failing the people.
Poor countries could have good responses, in fact, but often lack the means to carry them out. We don’t lack the means to carry out good responses in the United States; we lack the leadership to do so, and there are reasons for that. Basically, American politics has become deeply corrupt over decades, and it became so corrupt that normal governance already collapsed many years ago. And people with resources and knowledge know it, but they haven’t cared, because things have more or less gone on O.K., and the stock market has been booming, and even though in almost any private conversation Trump is viewed as a complete dolt and a complete incompetent, that was more or less laughed off as manageable because he wasn’t doing too much damage, either.
That’s the real situation. Nobody here has viewed government as actually very functional for a long time, and not because it couldn’t be. It has been increasingly designed to fail. Specifically, it’s been designed to respond to powerful lobbies that want deregulation or tax cuts or some special privileges rather than to function in a normal way. And powerful people shrug their shoulders at that, because for the élites that’s been O.K., but it obviously hasn’t really been O.K. for a long time. We’ve had rising death rates. We’ve had the deaths of despair. We’ve had the failure to come to grips with climate change. We’ve had widening inequalities and massive suffering. But it hasn’t mattered in such a visible way.
So what you were saying before was that these countries don’t have the resources to have good governance, but you’re saying now that if you do have the resources you still need all these other things that, in America, we either once had and don’t have anymore or have let go because of the way our ruling class has behaved?
Yeah. Let me explain, just to clarify. Maybe there’s some confusion about what the real debate was. I was explaining in 2005 that it was possible, for example, to treat AIDS or to control malaria. And my critics were saying, No, it’s not possible. Those countries are just corrupt, and they’ll steal whatever you give them. And that’s why they’re poor. And I was saying that’s silly. That’s not why they’re poor, and just because they’re poor you can’t say that they couldn’t carry out such programs. And there are reasons to believe that such programs could be carried out effectively, and, indeed, since 2005, have been carried out effectively. Malaria deaths have come down. People were put on AIDS drugs. The things I recommended actually were done, and they proved themselves to be feasible. So my argument then was to not equate poverty with incompetence of governments. What we’re talking about today is a converse—don’t equate wealth with competence of governments. You can be wealthy and miserably corrupt and miserably ineffective, just like you can be poor and effective in governance. There are two different dimensions.
How important is it for richer countries to maintain a focus on international development and aid despite what they themselves are going through right now?
The most important thing right now is that each country take the actions necessary to stop the spread of the epidemic and, at the same time, that the international institutions that we have created are sufficiently resourced and empowered to carry out the job of providing emergency financing, supplies, and advice on best practices to governments that don’t have the means to carry out actions on their own.
So, let me be specific. The United States is completely failing at the federal level to control this epidemic. It’s a tragedy. We’re losing tens of thousands of lives unnecessarily because of the shambolic failure of Trump and his team to mobilize the vast resources of our country, both human and material. At the same time, there are poor countries that are doing much, much better at controlling the epidemic. Take a country like Vietnam, which is a low-income country in East Asia, and close to China, but for a variety of reasons they acted very quickly to stop the transmission of the virus, to a much greater extent than we did. They also don’t have the means for mass testing and so on. At least to date, they have been able to keep the epidemic more under control through public-health means, which is identifying potentially sick people, helping them to isolate, tracing their contacts, helping those people to isolate, and so on.
The rich countries got the wave of the epidemic first, mainly because of the high extent of travel between China and Europe, and between China and the United States, and Europe and the United States. And the epidemic went out of control in this country basically because Trump did nothing and called upon the federal system almost not at all between early January and mid-March. And epidemics grow at exponential rates. The poorer countries by and large did not receive the intense seeding of the epidemic as early, because they have fewer flights, they have fewer visitors and tourists. So in Africa, South Asia, and Latin America, the number of cases was lower. That’s why we’re seeing, at least for the moment, some greater measure of control.
These countries do not have test equipment. They do not have personal protective equipment. They do not have ventilators, and so on. And what I am recommending is that the International Monetary Fund provide emergency financing at essentially zero conditionality, other than that it be used responsibly. And that the World Health Organization work with governments that have the potential to supply additional equipment—that’s China, Korea, Japan, and a few others—and use the emergency financing and the availability of this urgently needed equipment to get it to these countries in need.
Where does the United States stand in this?
Well, the United States has done the unimaginable, and that is to try to cut the functioning of the W.H.O. in the middle of the pandemic. So I’m not looking for American heroism. I’m looking for the United States not to be among the most destructive forces on the planet right now.
We are seeing all throughout the Western world the rise of populist and authoritarian forces. We’re seeing the closing of borders. We’re seeing a movement from, let’s say, hypocrisy and insufficient care for people on Earth who don’t have enough resources to open contempt for them.
How does that make you think about your work, and international development and aid, and its future?
I’ve been a critic of the United States over the past quarter century for inaction, complacency, and overmilitarization. This is not new for me, but Trump is the worst American leader in our history, and he is a contemptible figure, so he’s creating more damage. But the fact of the lack of American leadership has been true, by and large, for the last twenty years, with a couple of notable exceptions. I recommended first to the [George W.] Bush Administration both having an America-based program for AIDS, which became PEPFAR [the President’s Emergency Plan for AIDS Relief], and having a U.S.-based program for malaria, which became the President’s Malaria Initiative, and for having a Global Fund to Fight AIDS, T.B. and Malaria. And the United States rallied under George W. Bush for those things.
During the Obama period, I recommended many things to the Obama Administration, on development assistance for health or for other areas, none of which took hold. And I very much regretted that we had a smart, decent, sane President but, for whatever political calculations and reasons, he did not pursue any of those areas—with one exception, and that was pursuing the climate agenda, which I very much thank President Obama for.
Why do you think it was that he didn’t pursue these things?
Well, they came in and inherited a domestic financial crisis, and that was paramount in their thinking. I don’t have to surmise. I spoke with the President about it, and I spoke with his advisers repeatedly about these issues, so I know they did not want to take on these issues in that context. And I had arguments with O.M.B. [the Office of Management and Budget] and others in the White House about this.
The funding for the Global Fund to Fight AIDS, T.B. and Malaria was essentially frozen at a time when it was important for that funding to increase. This is very modest levels of funding. It’s hundreds of millions or low billions of dollars. We speak in trillions in general, so I was not pleased and not impressed by that response. I thought it was shortsighted and harmful, which I still do to this day. Of course, it’s nothing like the malevolence of the current government, which is quite a different thing.
And my point has been also that the politics of these issues is really poorly understood. I recommended to President [George W.] Bush, at the beginning of his Administration, having an AIDS program, and I recommended three billion dollars a year, and I was told that it was politically impossible. It turned out it was not politically impossible. It in fact happened in 2003, with PEPFAR, and it is regarded by President Bush, rightly, as one of his proudest achievements. He deserves a lot of credit for championing that cause, and it did a lot of good, and it was widely praised, and it had bipartisan support. So the question of what’s politically possible and not politically possible, in my opinion and experience, is a lot more interesting and subtle than the typical views.
So I think that President Obama judged wrongly. He did not believe it was politically feasible to do certain things. That’s how I interpret his remarks to me and to others. I disagreed with that at the time, and regret the lack of movement on those things. Now we’re battling something much, much worse.
We’re probably going to be dealing with a huge financial and economic crisis now. Does that also concern you in terms of what it will mean for the future of aid to poor countries?
I think one point to emphasize about aid, which maybe is not understood, and the reason I’m not so interested in talking about it in this context, is the following: aid from the U.S. to developing countries is 0.16 percent of G.D.P. It’s tiny. It’s a shocking level of ignorance and nastiness that it’s not higher. We’re talking about tiny amounts compared with all the other numbers that we are using these days. So think about the 350 billion for the small-business program that quickly got exhausted and will now be another 300 billion. The total cost of controlling malaria in the world per year is probably about 3-5 billion maximum, only a small fraction of which comes from the United States. We’re talking about incommensurate quantities in general. The aid is limited, not because we can’t afford it but primarily because our political system pays no attention to these issues.
So this is not fundamentally about resource constraints. It’s about caring, attention, philosophy of life, and politics, a sense of ethics and morality, a question of whether it’s really America First and everyone else be damned or whether it’s a question of trying to make a world that works more effectively. There are other things that are bigger, more expensive issues, like decarbonizing the energy system. But it’s also not a consequential number compared with the stakes of our lives, and it’s also neglected. Why?
Our political system for forty years now, since Ronald Reagan, has basically been dedicated to tax cuts, especially for rich people and corporations, and both parties—of course with the complete obsession of the Republican Party and maybe the semi-reluctance of the Democratic Party—have given tax cuts every two or three years since 1981. So now you’re coming to me and saying, Well, after this crisis, we’re going to have the fiscal crisis. We will, absolutely. We’re going to have a budget deficit this year of ten to twenty percent of G.D.P., but at some point we’re going to say, What is important for our country? What do we really want to pay for?