The “Berkeley Conversations: COVID-19” series hosted a livestream Friday to discuss the economic impact of and human solutions to the coronavirus pandemic with some of the nation’s leading economists and policy experts.
Campus spokesperson Dan Mogulof hosted the panel, which consisted of incoming UC Berkeley assistant professor of economics and public policy Ellora Derenoncourt, associate professor of economics Gabriel Zucman, professor of public policy and economics Jesse Rothstein, public policy and economics professor Hilary Hoynes and Dean of the Goldman School of Public Policy Henry Brady.
According to the panel, the economy could be revitalized more quickly with the help of aggressive investment and well-designed policy. Doing so may also minimize the distress faced by workers and businesses. Zucman emphasized the response of most other countries to try to protect jobs through payroll protection programs or “short-time” work programs where workers remain formally employed and employers are reimbursed by the government for up to 100% of the wages they provide. Comparatively, the U.S. unemployment rate is rapidly increasing and millions of jobs continue to be lost, according to Zucman.
“I am concerned that the U.S. path may not be optimal because of job destruction — the millions of jobs that are being destroyed — some of them will not be recreated after the pandemic is over and shutdown is over,” Zucman said at the event. “I’m worried about the possibility that the recovery might be slower in the U.S. than in European countries or in Canada, for instance.”
As the panelists discussed the history of pandemics, Derenoncourt made note of times when the country recovered from economic shocks comparable to that of today, including World War II. Hoynes highlighted how quickly Congress worked on the COVID-19 stimulus bill compared to its efforts in the past.
When looking back on both the Great Depression and Great Recession, Rothstein said the U.S. will face something much deeper than the Great Recession as a result of the pandemic.
“We’re definitely headed to something much deeper than the Great Recession and comparable to the Great Depression in depth,” Rothstein said at the event. “What we don’t know yet is whether we’ll be able to bounce back quickly or whether it will linger on for a decade or more. … The greater extent that we can keep workers attached to their firms and keep the firms afloat, the more likely it is it will bounce back quickly.”
According to most of the panelists, in order to keep these firms afloat, the government must be willing to provide extensive aid. Rothstein added that he feels there is no debt too high during this time, as repayment can be spread out over years. Zucman said he felt the U.S. should have universal health care, at least for COVID-19-related issues, regardless of age or immigration status. He added that many lost their health care insurance, along with their jobs, and there have already been stories of those who died after not seeking out medical assistance due to the high costs.
The livestream ended on the question of whether the economy should reopen in May, which framed it as a binary decision between the economy and lives. The experts said this was a “false choice,” and argued that maintaining the shutdown is what will allow the economy to bounce back. Zucman said he does not think there is a way to reopen the economy and contain the disease at the same time. Hoynes added that he thinks there needs to be a plan in place for safely ending the shelter-in-place order when the time comes.
“This is a moment when we realize that we’re all in this together,” Brady said at the event. “When we do good things for people, like providing children with food stamps, they turn out to have better lives as they go forward. … We have to think about how, by investing in people, we actually make the society better.”