Robert B. Reich's Blog, page 35

Corporations Will Not Save Us: The Sham of Corporate Social...

Corporations Will Not Save Us: The Sham of Corporate Social Responsibility

Last August, the Business Roundtable – an association of CEOs of America’s biggest corporations – announced with great fanfare a “fundamental commitment to all of our stakeholders” and not just their shareholders. 

They said “investing in employees, delivering value to customers, and supporting outside communities“ is now at the forefront of their business goals — not maximizing profits.

Baloney. Corporate social responsibility is a sham.

One Business Roundtable director is Mary Barra, CEO of General Motors. Just weeks after making the Roundtable commitment, and despite GM’s hefty profits and large tax breaks, Barra rejected workers’ demands that GM raise their wages and stop outsourcing their jobs. Earlier in the year GM shut its giant assembly plant in Lordstown, Ohio.

Nearly 50,000 GM workers then staged the longest auto strike in 50 years. They won a few wage gains but didn’t save any jobs. Barra was paid $22 million last year. How’s that for corporate social responsibility?

Another prominent CEO who made the phony Business Roundtable commitment was AT&T’s Randall Stephenson, who promised to use the billions in savings from the Trump tax cut to invest in the company’s broadband network and create at least 7,000 new jobs. 

Instead, even before the coronavirus pandemic, AT&T cut more than 23,000 jobs and demanded that employees train lower-wage foreign workers to replace them.

Let’s not forget Jeff Bezos, CEO of Amazon and its Whole Foods subsidiary. Just weeks after Bezos made the Business Roundtable commitment, Whole Foods announced it would be cutting medical benefits for its entire part-time workforce.

The annual saving to Amazon from this cost-cutting move is roughly what Bezos – whose net worth is $117 billion – makes in a few hours. Bezos’ wealth grows so quickly, this number has gone up since you started watching this video.

GE’s CEO Larry Culp is also a member of the Business Roundtable. Two months after he made the commitment to all his stakeholders, General Electric froze the pensions of 20,000 workers in order to cut costs. So much for investing in employees.  

Dennis Muilenburg, the former CEO of Boeing, also committed to the phony Business Roundtable pledge. Shortly after making the commitment to “deliver value to customers,” Muilenburg was fired for failing to act to address the safety problems that caused the 737 Max crashes that killed 346 people.  After the crashes, he didn’t issue a meaningful apology or even express remorse to the victims’ families and downplayed the severity of the fallout to investors, regulators, airlines, and the public. He was rewarded with a $62 million farewell gift from Boeing on his way out.

Oh, and the chairman of the Business Roundtable is Jamie Dimon, CEO of Wall Street’s largest bank, JPMorgan Chase. Dimon lobbied Congress personally and intensively for the biggest corporate tax cut in history, and got the Business Roundtable to join him. JPMorgan raked in $3.7 billion from the tax cut. Dimon alone made $31 million in 2018.

That tax cut increased the federal debt by almost $2 trillion. This was before Congress spent almost $3 trillion fighting the pandemic – and delivering a hefty portion as bailouts to the biggest corporations, many of whom signed the Business Roundtable pledge. 

As usual, almost nothing has trickled down to America’s working class and poor. 

The truth is, American corporations are sacrificing workers and communities as never before in order to further boost runaway profits and unprecedented CEO pay. And not even a tragic pandemic is changing that. 

Americans know this. A record 76 percent of U.S. adults believe major corporations have too much power. 

The only way to make corporations socially responsible is through laws requiring them to be – for example, giving workers a bigger voice in corporate decision making, requiring that corporations pay severance to communities they abandon, raising corporate taxes, busting up monopolies, and preventing dangerous products (including faulty airplanes) from ever reaching the light of day.  

If the CEOs of the Business Roundtable and other corporations were truly socially responsible, they’d support such laws, not make phony promises they clearly have no intention of keeping. Don’t hold your breath.  

The only way to get such laws enacted is by reducing corporate power and getting big money out of our politics.

The first step is to see corporate social responsibility for the sham it is. The next step is to emerge from this pandemic and economic crisis more resolved than ever to rein in corporate power, and make the economy work for all. 

From Ukraine to Coronavirus: Trump’s Abuse of Power...

From Ukraine to Coronavirus: Trump’s Abuse of Power Continues

Donald Trump has spent a lifetime exploiting chaos for personal gain and blaming others for his losses. The pure madness in America’s response to the coronavirus pandemic – shortages of equipment to protect hospital workers, dwindling supplies of ventilators and critical medications, jaw-dropping confusion over how $2.2 trillion of aid in the recent coronavirus law will be distributed – has given him the perfect cover to hoard power and boost his chances of reelection.

As the death toll continues to climb and states are left scrambling for protective gear and crucial resources, Trump is focused on only one thing: himself. 

He’s told governors to find life-saving equipment on their own, claiming the federal government is “not a shipping clerk” and subsequently forcing states and cities into a ruthless bidding war.

Governors have been reduced to begging FEMA for supplies from the dwindling national stockpile, with vastly different results. While we haven’t seen what “formula” FEMA supposedly has for determining who gets what, reports suggest that Trump’s been promising things to governors who can get him on the phone. 

Our narcissist-in-chief has ordered FEMA to circumvent their own process and send supplies to states that are “appreciative”.

Michigan and Colorado have received fractions of what they need while Oklahoma and Kentucky have gotten more than what they asked for. Colorado and Massachusetts have confirmed shipments only to have them held back by FEMA. Ron DeSantis, the Trump-aligned governor of Florida, refused to order a shelter-in-place mandate for weeks, but then received 100% of requested supplies within 3 days. New Jersey waited for two weeks. New York now has more cases than any other single country, but Trump barely lifted a finger for his hometown because Governor Andrew Cuomo is “complaining” about the catastrophic lack of ventilators in the city.

A backchannel to the president is a shoe-in way to secure life-saving supplies. Personal flattery seems to be the most effective currency with Trump; the chain of command runs straight through his ego, and that’s what the response has been coordinated around.

He claims that as president he has “total authority” over when to lift quarantine and social distancing guidelines, and threatens to adjourn Congress himself so as to push through political appointees without Senate confirmation.

And throughout all of this, Trump has been determined to reject any attempt of independent oversight into his administration’s disastrous response.

When he signed the $2 trillion emergency relief package into law, he said he wouldn’t agree to provisions in the bill for congressional oversight – meaning the wheeling-and-dealing will be done in secret.

He has removed the inspector general leading the independent committee tasked with overseeing the implementation of the massive bill.

He appointed one of his own White House lawyers, who helped defend him in his impeachment trial, to oversee the distribution of the $500 billion slush fund for corporations. That same day, he fired Inspector General Michael Atkinson – the inspector general who handed the whistleblower complaint to Congress that ultimately led to Trump’s impeachment.

There should never have been any doubt that Trump would try to use this crisis to improve his odds of re-election.

Stimulus checks going to the lowest-income earners were delayed because Trump demanded each one of them bear his name. As millions of the hardest-hit Americans scrambled to put food on the table and worried about the stack of bills piling up, Trump’s chief concern was himself.

It doesn’t matter that this is a global pandemic. Abusing his power for personal gain is Trump’s MO.

Just three and a half months ago, Trump was impeached on charges of abuse of power and obstructing investigations. Telling governors that they need to “be appreciative” in order to receive life-saving supplies for their constituents is the same kind of quid pro quo that Trump tried to extort from Ukraine, and his attempts to thwart independent oversight are the same as his obstruction of Congress.

Trump called his impeachment a “hoax”. He initially called the coronavirus a “hoax”. But the real hoax is his commitment to America. In reality he will do anything – anything – to hold on to power.

To Donald Trump, the coronavirus crisis is just another opportunity.

The Covid-19 Class Divide

The pandemic is putting America’s deepening class divide into stark relief. Four classes are...

The Solutions to the Climate Crisis No One is Talking AboutBoth...

The Solutions to the Climate Crisis No One is Talking About

Both our economy and the environment are in crisis. Wealth is concentrated in the hands of a few while the majority of Americans struggle to get by. The climate crisis is worsening inequality, as those who are most economically vulnerable bear the brunt of flooding, fires, and disruptions of supplies of food, water, and power.

At the same time, environmental degradation and climate change are themselves byproducts of widening inequality. The political power of wealthy fossil fuel corporations has stymied action on climate change for decades. Focused only on maximizing their short-term interests, those corporations are becoming even richer and more powerful — while sidelining workers, limiting green innovation, preventing sustainable development, and blocking direct action on our dire climate crisis.

Make no mistake: the simultaneous crisis of inequality and climate is no fluke. Both are the result of decades of deliberate choices made, and policies enacted, by ultra-wealthy and powerful corporations.

We can address both crises by doing four things:

First, create green jobs. Investing in renewable energy could create millions of family sustaining, union jobs and build the infrastructure we need for marginalized communities to access clean water and air. The transition to a renewable energy-powered economy can add 550,000 jobs each year while saving the US economy $78 billion through 2050. In other words, a Green New Deal could turn the climate crisis into an opportunity - one that both addresses the climate emergency and creates a fairer and more equitable society.

Second, stop dirty energy. A massive investment in renewable energy jobs isn’t enough to combat the climate crisis. If we are going to avoid the worst impacts of climate change, we must tackle the problem at its source: Stop digging up and burning more oil, gas, and coal.

The potential carbon emissions from these fossil fuels in the world’s currently developed fields and mines would take us well beyond the 1.5°C increased warming that Nobel Prize winning global scientists tell us the planet can afford. Given this, it’s absurd to allow fossil fuel corporations to start new dirty energy projects.

Even as fossil fuel companies claim to be pivoting toward clean energy, they are planning to invest trillions of dollars in new oil and gas projects that are inconsistent with global commitments to limit climate change. And over half of the industry’s expansion is projected to happen in the United States. Allowing these projects means locking ourselves into carbon emissions we can’t afford now, let alone in the decades to come.

Even if the U.S. were to transition to 100 percent renewable energy today, continuing to dig fossil fuels out of the ground will lead us further into climate crisis. If the U.S. doesn’t stop now, whatever we extract will simply be exported and burned overseas. We will all be affected, but the poorest and most vulnerable among us will bear the brunt of the devastating impacts of climate change.

Third, kick fossil fuel companies out of our politics. For decades, companies like Exxon, Chevron, Shell, and BP have been polluting our democracy by pouring billions of dollars into our politics and bankrolling elected officials to enact policies that protect their profits. The oil and gas industry spent over $103 million on the 2016 federal elections alone. And that’s just what they were required to report: that number doesn’t include the untold amounts of “dark money” they’ve been using to buy-off politicians and corrupt our democracy. The most conservative estimates still put their spending at 10 times that of environmental groups and the renewable energy industry.

As a result, American taxpayers are shelling out $20 billion a year to bankroll oil and gas projects – a huge transfer of wealth to the top. And that doesn’t even include hundreds of billions of dollars of indirect subsidies that cost every United States citizen roughly $2,000 a year. This has to stop.

And we’ve got to stop giving away public lands for oil and gas drilling. In 2018, under Trump, the Interior Department made $1.1 billion selling public land leases to oil and gas companies, an all-time record – triple the previous 2008 record, totaling more than 1.5 million acres for drilling alone, threatening multiple cultural sites and countless wildlife. As recently as last September, the Trump administration opened 1.56 million acres of Alaska’s Arctic National Wildlife Refuge to oil drilling, threatening Indigenous cultural heritage and hundreds of species that call it home.

That’s not all. The ban on exporting crude oil should be reintroduced and extended to other fossil fuels. The ban, in place for 40 years, was lifted in 2015, just days after the signing of the Paris Climate Agreement. After years of campaigning by oil executives, industry heads, and their army of lobbyists, the fossil fuel industry finally got its way.

We can’t wait for these changes to be introduced in 5 or 10 years time — we need them now.

Fourth, require the fossil fuel companies that have profited from environmental injustice compensate the communities they’ve harmed.

As if buying-off our democracy wasn’t enough, these corporations have also deliberately misled the public for years on the amount of damage their products have been causing. 

For instance, as early as 1977, Exxon’s own scientists were warning managers that fossil fuel use would warm the planet and cause irreparable damage. In the 1980s, Exxon shut down its internal climate research program and shifted to funding a network of advocacy groups, lobbying arms, and think tanks whose sole purpose was to cloud public discourse and block action on the climate crisis. The five largest oil companies now spend about $197 million a year on ad campaigns claiming they care about the climate — all the while massively increasing their spending on oil and gas extraction.

Meanwhile, millions of Americans, especially poor, Black, Brown, and Indigenous communities, already have to fight to drink clean water and breathe clean air as their communities are devastated by climate-fueled hurricanes, floods, and fires. As of 2015, nearly 21 million people relied on community water systems that violated health-based quality standards. 

Going by population, that’s essentially 200 Flint, Michigans, happening all at once. If we continue on our current path, many more communities run the risk of becoming “sacrifice zones,” where citizens are left to survive the toxic aftermath of industrial activity with little, if any, help from the entities responsible for creating it.

Climate denial and rampant pollution are not victimless crimes. Fossil fuel corporations must be held accountable, and be forced to pay for the damage they’ve wrought.

If these solutions sound drastic to you, it’s because they are. They have to be if we have any hope of keeping our planet habitable. The climate crisis is not a far-off apocalyptic nightmare — it is our present day.

Australia’s bushfires wiped out a billion animals, California’s fire season wreaks more havoc every year, and record-setting storms are tearing through our communities like never before. 

Scientists tell us we have 10 years left to dramatically reduce emissions. We have no room for meek half-measures wrapped up inside giant handouts to the fossil fuel industry. 

We deserve a world without fossil fuels. A world in which workers and communities thrive and our shared climate comes before industry profits. Working together, I know we can make it happen. We have no time to waste.

Coronavirus and the Height of Corporate WelfareWith the...

Coronavirus and the Height of Corporate Welfare

With the coronavirus pandemic wreaking havoc on the global economy, here’s how massive corporations are shafting the rest of us in order to secure billions of dollars of taxpayer-funded bailouts.

The airline industry demanded a massive bailout of nearly $60 billion in taxpayer dollars, and ended up securing $50 billion – half in loans, half in direct grants that don’t need to be paid back. 

Airlines don’t deserve a cent. The five biggest U.S. airlines spent 96 percent of their free cash flow over the last decade buying back shares of their own stock to boost executive bonuses and please wealthy investors.

United was so determined to get its windfall of taxpayer money that it threatened to fire workers if it didn’t get its way. Before the Senate bill passed, CEO Oscar Munoz wrote that “if Congress doesn’t act on sufficient government support by the end of March, our company will begin to…reduce our payroll….”

Airlines could have renegotiated their debts with their lenders outside court, or file for Chapter 11 bankruptcy protection. They’ve reorganized under bankruptcy many times before. Either way, they’d keep flying.

The hotel industry says it needs $150 billion. The industry says as many as 4 million workers could lose their jobs in the coming weeks if they don’t receive a bailout. Everyone from general managers to housekeepers will be affected. But don’t worry – the layoffs won’t reach the corporate level.

Hotel chains don’t need a bailout. For years, they’ve been making record profits while underpaying their workers. Marriott, the largest hotel chain in the world, repurchased $2.3 billion of its own stock last year, while raking in nearly $4 billion in profits. 

Thankfully, Trump’s hotels and businesses, as well as any of his family members’ businesses, are barred from receiving anything from the $500 billion corporate bailout money. But the bill is full of loopholes that Trump can exploit to benefit himself and his hotels.

Cruise ships also want to be bailed out, and Trump called them a “prime candidate” to receive a government handout. But they don’t deserve it either. The three cruise ship corporations controlling 75 percent of the entire global market are incorporated outside of the United States to avoid paying taxes.

They’re floating tax shelters, paying an average U.S. tax rate of just 0.8 percent. Democrats secured key provisions stipulating that companies are only eligible for bailout money if they are incorporated in the United States and have a majority of U.S. employees, so the cruise ship industry likely won’t see a dime of relief funding. However, Trump has made it clear he still wants to help them.

The justification I’ve heard about why all these corporations need to be bailed out is they’ll keep workers on their payrolls. But why should we believe big corporations will protect their workers right now? 

The $500 billion slush fund included in the Senate’s emergency relief package doesn’t require corporations to keep paying their workers and has dismally weak restrictions on stock buybacks and executive pay. 

Even if the bill did provide worker protections, what’s going to happen to these corporations’ subcontractors and gig workers? What about worker benefits, pensions and health care? How much of this bailout is going to end up in the pockets of executives and big investors?

The record of Big Business isn’t comforting. Amazon, one of the richest corporations in the world, which paid almost no taxes last year, is only offering unpaid time off for workers who are sick and just two weeks paid leave for workers who test positive for the virus. Meanwhile, it demands its employees put in mandatory overtime.

Oh, and these corporations made sure they and other companies with more than 500 employees were exempt from the requirement in the first House coronavirus bill that employers provide paid sick leave.

And now, less than a month into statewide shelter-in-place orders and social distancing restrictions, Wall Streeters and corporate America’s chief executives are calling for supposedly “low-risk” groups to be sent back to work to restart the economy. 

They’re so concerned about protecting their bottom line that they’re willing to let people die to preserve their stock portfolios, all while they continue working from the safety and security of their own homes. It’s the most repugnant class warfare you can imagine.

Here’s the bottom line: no mega-corporation deserves a cent of bailout money. For decades these companies and their billionaire executives have been dodging taxes, getting tax cuts, shafting workers, and bending the rules to enrich themselves. There’s no reason to trust them to do the right thing with billions of dollars in taxpayer money. 

Every penny we have needs to go to average Americans who desperately need income support and health care, and to hospitals that need life-saving equipment. It’s outrageous that the Senate bill gave corporations nearly four times as much money as hospitals on the front lines. 

Corporate welfare is bad enough in normal times. Now, in a national emergency, it’s morally repugnant. We must stop bailing out corporations. It’s time we bail out people.

Trump’s Failed Coronavirus ResponseThe Trump administration’s...

Trump’s Failed Coronavirus Response

The Trump administration’s response to the coronavirus pandemic has been a deliberate disaster from the beginning. But don’t take my word for it – just look at the facts.

Here’s the timeline: 

In 2018, he let the pandemic-preparedness office in the National Security Council simply dissolve, and followed up with budget cuts to HHS and CDC this year. That team’s job was to follow a pandemic playbook written after global leaders fumbled their response to Ebola in 2014. Trump was briefed on the playbook’s existence in his first year - had he listened, the government would’ve started getting equipment to doctors two months ago.

The initial outbreak of the coronavirus began in Wuhan, China, in December, 2019.  

By mid-January, 2020, the White House had intelligence reports that warned of a likely pandemic.

On January 18th, HHS Secretary Azar spoke with Trump to emphasize the threat of the virus just as US Diplomats were being evacuated from Wuhan.

Two days later, the virus was confirmed in both the US and South Korea.

That week, South Korean officials immediately drafted medical companies to develop test kits for mass production. The WHO declared a global health emergency. But Trump … did nothing.

As Hubei Province went on lockdown, Trump, who loves any excuse to enact a racist travel ban, barred entry of any foreigners coming from China (it was hardly proactive) but took no additional steps to prepare for infection in the United States.

He said, “We pretty much shut it down, coming in from China,”

He didn’t ramp up production of test kits so we could begin isolating the virus.

By February, the US had 14 confirmed cases but the CDC test kits proved faulty; there weren’t enough of them, and they were restricted to only people showing symptoms. The US pandemic response was already failing.

Trump then began actively downplaying the crisis and baselessly predicting it would go away when the weather got warmer.

Trump decided there was nothing to see here, and on February 24th, took time out of his day to remind us that the stock markets were soaring.

A day later, CDC officials sounded the alarm that daily life could be severely disrupted. The window to get ahead of the virus by testing and containment was closing. 

Trump’s next move: He compared Coronavirus to the seasonal flu…and called the emerging crisis a hoax by the Democrats.

With 100 cases in the US, Trump declined to call for a national emergency.

Meanwhile, South Korea was now on its way to testing a quarter million people, while the US was testing 40 times slower.

When a cruise ship containing Americans with coronavirus floated toward San Francisco, Trump said he didn’t want people coming off the ship to be tested because they’d make the numbers look bad.

It wasn’t until the stock market reacted to the growing crisis and took a nosedive that Trump finally declared a national emergency.

By this time, South Korea had been using an app for over a month that pulled government data to track cases and alert users to stay away from infected areas.

Over the next weeks, as the virus began its exponential spread across the US, and Governors declared states of emergency, closing schools and workplaces and stopping the American economy in its tracks –  Trump passed on every opportunity to get ahead of this crisis.

Trump’s priority was never public health. It was about making the virus seem like less of a nuisance so that the “numbers” would “look good” for his reelection.

Only when the stock market crashed did Trump finally begin to pay attention…and mostly to bailing out corporations in the form of a massive $500 billion slush fund, rather than to helping people. And then, with much of America finally and belatedly in lockdown, he said at a Fox News town hall that he would “love” to have the country “opened up, and just raring to go” by Easter.

At every point, Trump has used this crisis to compliment himself.

This is not leadership. This is the exact opposite of leadership. 

Dear Bernie

I’m sorry you will not be president, but I understand and appreciate your decision to end your...

How CEOs Are Ruining AmericaToday, America’s wealthiest business...

How CEOs Are Ruining America

Today, America’s wealthiest business moguls – like Jamie Dimon, head of JPMorgan Chase – claim that they are “patriots before CEOs” because they employ large numbers of workers or engage in corporate philanthropy.

Rubbish.

CEOs are in business to make a profit and maximize their share prices, not to serve America. And yet these CEOs dominate American politics and essentially run the system. 

Therein lies the problem: They cannot be advocates for their corporations and simultaneously national leaders responsible for the wellbeing of the country. This is the biggest contradiction at the core of our broken system.

A frequent argument made by CEOs is that so-called “American competitiveness” should not be hobbled by regulations and taxes. Jamie Dimon often warns that tight banking regulations will cause Wall Street to lose financial business to banks in nations with weaker regulations. Under Dimon’s convenient logic, JPMorgan is America. 

Dimon used the same faulty logic about American competitiveness to support the Trump tax cut. “We don’t have a competitive tax system here,” he warned.

But when Dimon talks about “competitiveness” he’s really talking about the competitiveness of JPMorgan, its shareholders, and billionaire executives like himself.

The concept of “American competitiveness” is meaningless when it comes to a giant financial enterprise like JPMorgan that moves money all over the world. JPMorgan doesn’t care where it makes money. Its profits don’t directly depend on the wellbeing of Americans.

“American competitiveness” is just as meaningless when it comes to big American-based corporations that make and buy things all over the world. 

Consider a mainstay of corporate America, General Electric. Two decades ago, most GE workers were American. Today the majority are non-American. In 2017, GE announced it was increasing its investments in advanced manufacturing and robotics in China, which it termed “an important and critical market for GE.” In 2018, over half of GE’s revenue came from abroad. Its once core allegiance to American workers and consumers is gone.

Google has opened an Artificial Intelligence lab in Beijing. Until its employees forced the company to stop, Google was even building China a prototype search engine designed to be compatible with China’s censors.

Apple employs 90,000 people in the United States but contracts with roughly a million workers abroad. An Apple executive told The New York Times, “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible” – and showing profits big enough to continually increase Apple’s share price.

American corporations will do and make things wherever around the world they can boost their profits the most, and invest in research and development wherever it will deliver the largest returns. 

The truth is that America’s real competitiveness doesn’t depend on profit-seeking shareholders or increasingly global corporations. The real competitiveness of the United States depends on only one thing: the productivity of Americans. 

That in turn depends on our education, our health, and the infrastructure that connects us. Yet today, American workers are hobbled by deteriorating schools, unaffordable college tuition, decaying infrastructure, and soaring health-care costs. 

And truth be told, big American corporations and the CEOs that head them – wielding outsized political influence – couldn’t care less. They want tax cuts and rollbacks of regulations so they can make even fatter profits. All of which is putting Americans on a glide path toward lousier jobs and lower wages. How’s that for patriotism?

The first step toward fixing this broken system is to stop buying CEOs’ lies. How can we believe that Jamie Dimon’s initiatives on corporate philanthropy are anything other than public relations? Why should we think that he or his fellow CEOs seek any goal other than making more money for themselves and their firms? We can’t and we shouldn’t. They don’t have America’s best interests at heart — they’re making millions to be CEOs, not patriots.

Big American corporations aren’t organized to promote the wellbeing of Americans, and Americans cannot thrive within a system run largely by corporations. Fundamental reform will be led only by concerned and active citizens.

Trump’s COVID-19 Power Grab

The utter chaos in America’s response to the pandemic – shortages of equipment to protect hospital...

How to Prepare for the Trump RecessionThe global coronavirus...

How to Prepare for the Trump Recession

The global coronavirus pandemic has put our economy in free-fall.

Even through Donald Trump’s reckless economic policies, like his pointless trade war with China or his deficit-busting tax cuts for his billionaire donors, the economy has somehow managed to keep chugging along — until now. 

All of the stock market gains from Trump’s time in office have been wiped out, and over the course of just over one week in March the Dow Jones Industrial Average experienced its five largest drops in history. 

Worse than a plummeting stock market, businesses and major industries have been forced to shutter their windows to help combat the rapid spread of the virus, putting hundreds of thousands of workers’ paychecks at risk. 

A recession is inevitable at this point. Here are 3 things we can do to prepare.  

Number one: We need to reform unemployment insurance so it reflects the needs of today’s economy. 

When it was first created in 1935, unemployment insurance was designed to help full-time workers weather downturns until they got their old jobs back. But there are fewer full-time jobs in today’s economy, and fewer people who are laid off get their old jobs back again. 

As a result, only 27% of unemployed workers receive benefits today, compared to 49% of workers in the 1950s. We need to expand unemployment coverage so that everyone is protected.

Number two: We need to strengthen Temporary Assistance for Needy Families, also known as  public assistance. 

Since its creation in 1996, the number of families receiving cash assistance has declined dramatically – and not because they’re doing well. Between 2006 and 2018, just 13% of families were lifted out of poverty, while the number of families receiving public assistance fell by 39%.

Already weak, the program didn’t hold up well during the Great Recession. Funding doesn’t automatically expand during economic downturns – meaning the more families are in need, the less money there is to help them. The program also has strict work requirements, which can’t be fulfilled in a deep recession. Worse yet, many individuals in need have already exhausted their five years of lifetime eligibility for assistance.

We need to reform the public assistance program so that more families in need are eligible. It should be easier to waive the strict work eligibility requirements during the economic downturn, and the lifetime five-year limit should be suspended.

Number three: We need to protect the Supplemental Nutrition Assistance Program, also known as SNAP or food stamps. 

Unlike public assistance, SNAP responded well during the Great Recession. Its requirements are designed to expand during economic downturns or recessions.

Waiving work requirements during the Great Recession made thousands of people in need eligible for the program who otherwise wouldn’t have been. Between December 2007 and December 2009, the number of SNAP participants rose by 45%. The program helped keep an estimated 3.8 million families out of poverty in 2009.

But that might not be an option this time around, as SNAP has come under attack from the Trump administration, which is trying to enact a draconian rule change that would kick an estimated 700,000 of our most vulnerable citizens off of the program. Luckily, a judge blocked the rule from going into effect, but the administration is still fighting to enforce it — even in the middle of a global pandemic. We need to make sure SNAP’s flexibility and ability to respond to economic downturns is protected before the next recession hits.

Stronger safety nets are not only good for individuals and families in need. They will also prevent the looming recession from becoming an even deeper and longer economic crisis.