Pub. 17 2020 Issue 3

10 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S By Mark Anderson, Legal and Legislative Assistant, New Mexico Bankers Association F or the vast majority of Amer- icans, particularly those under 50, their relation to the Great Depression has primarily been through hearing their grandparents mention it at family gatherings or learning about it in history classes. Sure, there have been moments of overarching econom- ic peril in the past several decades, but nothing compares to the mass suffering and economic despair that occurred during the Great Depression. Some Americans who have achieved a high level of economic prosperity have largely written off individuals’ economic failings as personal failings, the inabil- ity of those individuals to rise to the occasion in the American economy. Part of that is based upon a genuine belief that our system consistently rewards the most exceptional, hardest-working peo- ple. Some of that is a way to rationalize a system that often punishes people with brutal economic conditions through no fault of their own. But, as 2020 comes to an end, it is clear that the United States’ economic system has failed during the COVID-19 crisis, and words like “Great Depres- sion” are now being regularly brought up in conversation, not in a histori- cal context but in a very immediate sense. According to a recent study by Columbia University, the number of Americans living in poverty has grown by 8 million since just May. Accord- ing to the U.S. Department of Health and Human Services, living below the poverty line means a family of four earns $26,000 or less. There are now 55 million Americans living in poverty, with the 8 million added since May. The reason for the rapid expansion in poverty can be directly traced to diminishing federal stimulus in the latter summer months. The CARES Act, passed early in the pandemic, provided a one-time $1,200 stimulus payment and expanded unemployment insurance to temporarily offset rapidly growing poverty rates. But the benefits of the CARES Act have since dried up, leaving large swaths of Americans left to fend with no safety net. At the beginning of the COVID-19 crisis, it seemed as if the American public was faced with a binary choice: save the economy or maintain the public health? However, it was more than possible to save the economy and maintain the public health, as coun- tries like Germany and France have demonstrated through comprehensive government aid. But, in the confusion over how to approach COVID-19, the U.S. managed to allow both the econ- omy and the public health to implode. There have been continual mixed messages about the seriousness of the virus and the viability of re-opening schools and the economy. In attempting to find ways to reopen the economy, many public officials have completely skipped the step of controlling the virus, therefore rendering any possi- bility of long-term economic improve- ment impossible. As long as the virus is around, it will be impossible for the economy to reach anything resem- bling pre-COVID levels absent exten- sive aid from the federal government. And, with the federal government sitting on its hands unwilling to pass further economic assistance, it seems inevitable that economic suffering will persist and only increase. The real question is, how did we get here, aside from the unexpected occurrence of the pandemic? Only a year ago, many public officials, economic pundits and those at the top of the economic ladder were touting an economy brimming with explosive growth, unemployment that continued to nosedive, and a stock market that was soaring at unprec- edented levels. If the economy were this record-setting, world-beating juggernaut, surely it wouldn’t col- lapse within months in the face of a pandemic, right? Sure, there would be hiccups, but a complete collapse? The answer is that the economy was never particularly strong in the first place and could only project strength if examined from a completely myopic, slanted viewpoint. AMERICA’S PANDEMIC ECONOMY