Speculations on Post-Covid America

That globalization as it has been known, from its beginnings in the 70s and 80s and rapid acceleration in the ‘posthistorical’ 90s through today, has been under threat is not a new observations. Ever the target of discontent, it was the enemy of choice for a hosts of movements, formal and informal, that spanned the political spectrum, from the postmodern populisms and anarchically-inclined anti-globalization actors of the 90s (a pair that, interestingly enough, was often not as far apart as one might think), to the latter day Occupy movement and ascendancy of social democratic politics. But in 2015-2016, what was once held at by the well-oiled machine of establishment consensus seemed to implode with the rise of Trump, playing out against the backdrop of a worldwide insurgency. Across Europe, euroskeptical movements were suddenly racing forward, seemingly from nowhere (they were, of course, always there).

“Our most pressing political problem today”, mourned one senior fellow at the liberal Brookings Institution in 2016, “is that the country abandoned the establishment, not the other way around”. That Brookings was the de facto intellectual arsenal behind many of approaches advanced by Obama administration, from trade and finance to foreign policy, tells us plenty about the seachange in that moment and speed in which it arrived.

Now, in the midst of Covid-19’s onslaught, populism seems to have been crashed upon the reefs of a harsh reality. Anton Jäger has argued this in recent (and very good) essay, noting that

the long-awaited mass mobilization will have to be postponed. States demobilized their citizens for about thirty years. Now they will ask them to demobilize just a little bit more… we will see little to no mobilization, and probably no ‘counter-hegemonic’ subject. Instead, the West will witness the completion of the capsular civilisation constructed by neoliberalism in the last thirty years. We can confidently expect the Houllebecqian nightmare we’ve been warned of. Without a massive stimulus package, the corona crash will wipe out most of the small-scale service sector, from barbers to nail salons to internet cafes to specialty coffee bars. The only companies left standing will be Amazon and the large chains, now lording over a recalibrated sub-economy designed to deliver ‘essential’ goods. This situation might just realize the dream of 1990s sociology and its ‘network society’ described by Manuel Castells. Interpersonal contact will be replaced by mediations through machines. Experience will be increasingly restricted to emojis. Sexual pleasure will be outsourced, with porn addicts turning into ideal consumers of themselves.

Such is the fate of left-populism: the Age of the Mass (or, if you’re on an elite persuasion, the Time of the Unruly Mob) over before it had even really began. The technocratic impulse returns with full-force, as a regime of monitoring, evaluation, and regulation of social life becomes the stark necessity under the shadow of potential secondary infection waves. It has fallen even further in Bernie’s departure from the presidential campaign, following not only the series of defeats but also the difficulty in campaigning in an era of lock downs and social distancing. Biden, the last man standing to face off against Trump, might be paying mild lip service to the array of voters he had just overcome, but he is, at the end of the day, an icon of the establishment at its most neoliberal-technocratic.

On the right, the picture looks a little different. Trump’s ‘economic nationalization’ has for some time now seemed to have run out of steam; beyond cursory rounds of tariffs and reevaluations of trade deals, the Bannonite visions of 2016 have disappeared into the fog of re-alignment with the key centers of power in the Republican Party. What’s even more notable is the administration’s response to the coronavirus-spurred economic damage: it is to date little more than pure Obamanomics, blown up to monstrous proportions.

And yet that which underpinned the whole momentum—opposition to globalization—returns in a strange, new form. The hollowing-out of domestic manufacturing capacity has, on the one hand, aided in leaving the population vulnerable to ongoing economic fallout, and on the other, has generated considerable problems in obtaining the supply of goods vital to the fight against coronavirus. Such a situation has provided fresh ammunition for the political figures most opposed to the current organization of industrial and economic relations. Benjamin Tal, chief economist at the Canadian Imperial Bank of Canada, recently suggested that while the coronacrisis “won’t reverse globalization… it will modify it” by spurring a push towards the relocalization of manufacturing. In the pages of Foreign Policy, a harder line is taken, with British economist Phillipe Legrain arguing that the current crisis “killing globalization as we know it”.

Uri Friedman, meanwhile, has written in The Atlantic that “As Trump’s trade adviser Peter Navarro and Senator Marco Rubio both told me, the crisis is an alarming “wake-up call” about American vulnerabilities in a globalized world—one that the United States has for decades played a leading role in sustaining”.  Noting a reciprocal shift of economic power towards the east, Branko Milanovic offers similar thoughts:

…we might expect the reversal of globalization. This is most obvious in the relatively short-term (one to two years) during which, even under the optimistic scenario of the handling of the pandemic, the movement of people and possibly goods will be much more controlled than before the crisis.

Many of the impediments to the free movement of people and goods may come from the well-founded fear of the recurrence of the pandemic, but some of them will dovetail with the economic interests of companies. Thus, the removal of restrictions will be difficult and costly.We have not removed expensive and cumbersome airplane security measures despite the absence of terrorist attacks for years, and we are unlikely to remove them in this case too.

There will also be a not-unreasonable fear that depending entirely on the kindness of strangers is not necessarily the best policy in a national emergency. This will undermine globalization as well. 

All this would serve to affect a strengthening of the American nation, though at this point this is something of a rearguard maneuver. But one potential outcome of the current crisis might be something that I’ve seen mentioned very little: a renewed emphasis not simply on the powers of the Federal government, but on the powers of the individual states themselves. In the early days of the domestic coronavirus outbreak, the Trump that everybody expected—Trump the authoritarian, this specter that has haunted the liberal mind for years—was simply nowhere to be seen. Instead of the dreaded arrival of a militarized, MAGA-hatted juggernaut, executive power seemed nonexistent, and was something more like the dark miracle of the Bataillean void. In its stead was a heterogeneous swarm of state action that National Review dubbed a “decentralized Schmittianism” (if this comparison seems overblown, consider how governors have stretched the parameters of the law to its breaking point: the Ohio governor’s last-minute decision to postpone the state primary and the Kentucky governor’s inter-state travel ban have been contested as unconstitutional measures). In another case where the Trump administration need seem like it was on the verge of a sweeping, Wuhan-esque measure—a regional quarantine of New York City, Connecticut, and New Jersey—New York governor Andrew Cuomo effectively stymied the effort, calling it a “declaration of war on the states… A federal declaration of war” of a kind unseen since “the Civil War”.

At each step of the fight against the virus, the federal government has offloaded decision-making and costs onto the states. As the administration revised the dwindling of the national stockpile (hello, supply chain crisis) as something that belonged to the federal government, acquisition of vital supplies was left to the states. A bizarre architecture has emerged: individual states source their supplies from oversees, only for them to requisitioned under the authority of the DPA. The ostensible goal is to prevent hoarding in the face of real limitations to meeting supply, but it seems that they are in turn passed to private businesses who then auction them off. In response, states have undertaken efforts to circumvent federal reach. Massachusetts, for example, seems to have formed a diplomatic back channel to acquire PPE gear, which was then transported stateside onboard the private airliner of the New England Patriots NFL team. In another notable example, California has acquired a monthly supply of some 200 million masks—enough, it says, to help fulfill demand in its neighboring western states.

The question that remains to be seen is whether or not this trend towards state empowerment, aided in the first place by the federal drive to unburden itself and then by their own obstructionist efforts, will be carried over into the post-Covid world. With the precedents set, and with the intimate familiarity all Americans are currently getting with the structures of state government that are often taken for granted, it seems like there could be a strong likelihood of this happening. One wonders if the decision by the tattered remnants of the pro-Sanders movement to switch towards emphasizing down-ballot initiatives and lower level candidates will feed this tendency from the political left—and beyond even this, the potential for a mass reshoring of manufacturing could see states’ economic capabilities expand considerably.

There are, however, limits to this tendency. One particularly difficult hurdle to overcome is the further economic costs being incurred by the states due to the economic collapse: the shuttering of business undercuts the sourcing of essential tax revenue, and with the lack of a national unemployment system, the 15 million+ unemployment claims, food stamp requests, etc. are costs the states must bear. This leads, as it did during the Great Recession, to state becoming massively indebted to the federal government. In the face of this situation, it’s interesting to note that just this morning the Federal Reserve announced the creation of a Municipal Liquidity Facility for the purchasing of “up to $500 billion of short-term notes directly from US states… US counties with a population of at least two million residents, and US cities with a population of at least one million residents”.

The dynamics of re-establishing a domestic industrial base could also serve to undercut a tendency towards a more state-centric organization of government. As mentioned earlier, the coterie within the Republican Party that has placed industrial policy on the agenda—something covered at length in this blog—has been invigorated by the conditions put in motion by coronavirus (Matt Stoller too has written about this in a recent post). The crisis thus has been something of an accelerant for these pre-existing tendencies—but what is often glossed is that neo-developmentalist programs necessitate a promethean concentration of executive power that acts to override dissent. While this inevitability conjures up images of the developmental programs of South Korea or Singapore, it is something that has repeated across American history: the Republican’s Hamiltonian drive, with its tariffs and pursuit of ‘internal improvements’, was a secondary causal factor in the run-up to the Civil War, and during the emergency-Hamiltonianism of the New Deal, there was a near-constant face off between the rapid expansion of federal power and those who wished to see power remain relegated to the state level.

Addendum: After writing this post yesterday, I’ve seen a few more articles that reflect some of the tendencies regarding individual US states that I touched on above. The first is a bit from Forbes titled “Welcome to Community QE” (h/t to Jonathan Culbreath for drawing my attention to it). Its about the Fed’s new municipal lending facility, and for the author of the article, it signifies an incredible shift in the balance of power in disaster-response capabilities (with ramifications beyond this particular crisis). The key points:

It is critical for state and local officials across the country now to grasp the significance of this announcement immediately, with all deliberate speed, and to seize the remarkable new opportunity that it now presents. What the new announcement effectively means is that all U.S. states and their municipalities will begin to morph into something resembling dollar-issuing federal instrumentalities if and as the current crisis continues. They will now become something akin to full federal partners in addressing our national pandemic. They are effectively being both federally deputized and, very soon now, federally funded as if they were federal agencies empowered to conduct our nation’s pandemic response. This is truly a ‘game-changing’ new opportunity where addressing the present crisis is concerned.

It is also much more than a mere opportunity, however: When combined with the presently minimal role being assigned existing federal instrumentalities such as the Centers for Disease Control (CDC), the Federal Emergency Management Agency (FEMA), and the U.S. Army Corps of Engineers (USACE) in addressing our present pandemic, it amounts to a responsibilityand an imperative as well. It is literally incumbent on states and cities to begin issuing Fed-monetizable financial instruments in such quantities as are necessary to fund all emergency measures that our states and cities are now left to their own devices to take. For again, they are for now our de facto federal disaster response agencies.

Politico, meanwhile, has taken a look at the emerging relationship between mayors in coordinating and enhancing quarantine procedures and other mitigation efforts:

Citing the legacy of Hurricane Katrina, Atlanta Mayor Keisha Lance Bottoms has told her staff, “God bless the child who’s got his own.”… Bottoms has sought support from her counterparts in major cities grappling with similar outbreaks…

She said she modeled Atlanta’s stay-at-home order after San Francisco Mayor London Breed’s, took messaging cues from Birmingham, Ala., Mayor Randall Woodfin, plans to roll out a grant program for residents similar to what Mayor Melvin Carter has done in St. Paul, Minn., and spoke to Los Angeles Mayor Eric Garcetti. Bottoms is also on a text thread with at least 10 other mayors.

“For as many mayors as I’ve reached out to for guidance and assistance, I’ve had as many reach out to me,” she said.

Finally, who could forget about Governor Gavin Newsom alluding to California as a “nation state”, or the odd rebirth of the CalExit movement in conjunction with an Iranian social media campaign?