Reimagining Economic Possibilities After the Pandemic

Natalie Foster, in her new book The Guarantee, argues that the government should guarantee its citizens a measure of economic security. At a time when confidence in government is near a record low, she offers plenty of examples of how its policies have nevertheless helped people improve their lives. Most recently, the pandemic led to an extraordinary series of initiatives that altered the public’s imagination of how the American economy might work, Foster argues. Cancellation of student debt allowed tens of thousands of students to envision a future free of crushing loan repayment. Over 11 million small businesses received government loans that kept millions of workers employed. An expansion of the Child Tax Credit reduced child poverty by 30%. These victories for economic equality, Foster notes, created a “sea change” in people’s views about what was politically possible.

Foster, who is the president of the Economic Security Project, wants to keep people talking to each other about bold alternatives to an economic system that often benefits the few at the expense of the many. A longtime advocate for universal basic income, she chronicles how organizers “provoked,” “legitimized” and “won” policy victories through the often grinding political work required for success. The consequence of abandoning that effort, says Foster, is cynicism or paralysis.

The Guarantee: Inside the Fight for America’s Next Economy is published by the New Press. 

Foster spoke to Capital & Main from her home in Oakland, California.

This interview has been edited for brevity and clarity.

Capital & Main: The idea of guarantees, especially economic ones, runs counter to a notion prevalent in American culture that there are no guarantees in life. Success, so the argument goes, comes through preparation, hard work and discipline. Many equate guarantees with “handouts.” How do you see that tension?

Natalie Foster.

Natalie Foster:  Guarantees aren’t a handout, or even a safety net. They’re a trampoline. They allow people to build lives of dignity and agency. We don’t have experience with guarantees from the government, and that is what I think should change in the richest nation on Earth. We should guarantee a floor that we don’t let people fall through.

An example is the child tax credit [which was made more generous during the pandemic]. Those checks were sent to every parent in America, a guaranteed income for parents with kids. It took parents a while to understand what it was and to really believe it was possible. Those checks were starting to be counted on just as our political process turned them off. But all signs point to those types of guarantees being an important part of the future.

What are some of the key economic guarantees you describe in your book that are broadly popular in the United States? 

There’s a lot of guarantees we have in place that are popular, like Social Security, which was once an inconceivable idea. It’s a guarantee that people really count on, and the checks have helped dramatically reduce poverty. There are guarantees for business that are often overlooked, like the patent system, the court system and, as a shareholder investor, you are not held personally responsible for corporate activity. Those guarantees that make business function well have not been extended broadly to everyday Americans, who make the economy work from the bottom up. That should be the next social contract, guaranteeing an economic floor, not a ceiling, but a floor through which no one can fall.
 

“Guarantees aren’t a handout, or even a safety net. They’re a trampoline. They allow people to build lives of dignity and agency.”

 
One of the interesting examples of an economic guarantee that you point to is in Alaska, a state often seen as libertarian in many respects. How does that program function? 

The Alaska Permanent Fund was established with royalties from oil exploration in Alaska. Every year it pays out dividends to every resident of Alaska, both children and adults. It’s a lump sum check which varies each year based on how the fund has done. People view it as their commonly owned wealth collectively shared as Alaskans.

I think that’s a really good model for how we could imagine our own social floor in America as commonly owned wealth that we all benefit from regardless of race, religion or zip code. The Alaska Permanent Fund has survived both Republicans and Democrats in power. 

I assume that libertarians are not sending the money back or refuse to take it? 

That’s exactly right. Libertarians are taking the money. And frankly, we saw this throughout the country when stimulus checks were sent to people. Nobody burned them. Nobody burned their child tax credit checks. These payments were understood to be ways that people got by. 

One of the organizers you highlight is Ai-jen Poo, the president of the National Domestic Workers Alliance. How does her effort to improve working conditions for nannies, house cleaners and homecare workers relate to obtaining an economic guarantee? 

I think that we’re very much in the moment of struggling to make domestic work, good, high-paying quality jobs in America. That’s what it means to be formalized in the economy. This process has two parts. One part is [improving] the wages that caregivers make. The other side of the equation are the families who have to be able to afford the care, those who have to pay for long-term care for their parents, or those looking for child care or care for the disabled. This is a guarantee of family care that has to work.
 

“The dominant story here says, ‘Pull yourself up by your bootstraps,’ and if we are unable to make it in an economy that is stacked against us, we feel shame.”

 
Is there a good example of policies to support care work at the state level?

Washington state has the Washington Cares Fund. It’s a social insurance program that everybody pays a small amount into. When it comes time for long-term care, you can withdraw the money. But this type of program is really a patchwork quilt in America. I think these jobs become formalized when the job has benefits and protections extended to them.

You point out that nearly 40% of student debt holders lack a degree and that the fastest growing sector of student loan debtors is 62 or older. Who are these people and how did they accumulate educational debt?

They are people who bought into the story that higher education is a personal investment to be made where loans should be taken out at all cost. I believe that society is better off if education is seen as a public good and is affordable and guaranteed for our kids. Instead, it’s something we do at our own expense with few limits on the predatory actors moving into that space. People start going to college but drop out because it’s too expensive. They took out loans for one or two years and still pay on those loans despite not having a degree. That student debt sticks with you throughout your life. With older people, it’s grandparents who co-signed on loans for their grandkids or others who are going back to school.

Who are the “predators?”

Some are private for-profit colleges, who ran predatory schemes. Kamala Harris, who was [California] attorney general, sued Corinthian College in California and shut them down. 

In the absence of a guarantee of higher education, you had predators come in with high interest loans and promises to students who filled the void. 

There is a psychology to this where people feel a sense of shame about not being able to pay debts they incurred or having a home foreclosed on. They often see themselves as failures. 

The dominant story here says, “Pull yourself up by your bootstraps,” and if we are unable to make it in an economy that is stacked against us, we feel shame. And people hold onto that shame privately because there are very few public places to express it. That’s why organizations like the Debt Collective, a union of debtors, are important because they help people tell a different story about how the economy can work much differently for people.
 

“Historically white supremacists would rather fill in the public pools than integrate the pools.”

 
You argue that “a democratically elected government is the only entity with the potential to hold the private sector accountable.” Many polls suggest that many people are unenthusiastic about the government. Are they misguided in their attitudes? 

Government needs to work in people’s lives. When it does, it’s something people really like and want. A great example of this is the Affordable Care Act. Fourteen years ago, the Affordable Care Act passed to a tremendous uproar across this country. The Tea Party protests had the slogan “Get the government out of my health care.” Donald Trump ran promising to repeal the Affordable Care Act, but he was unable to repeal it because it had already started to make a difference in people’s lives. North Carolina was the 40th state in the union to expand the Medicaid provision of the Affordable Care Act. It was unthinkable to see purple and red states doing that but they did. In Montgomery County, Maryland, where they’re building housing that is kept permanently off the speculative market so rents are kept low for middle-income families. It’s working, and it’s got political resilience because of that.

You write that “our continuing challenge as a country is to overcome white resistance to true economic and democratic citizenship for all.” Does framing it this way make it harder to build a majority political coalition to implement these guarantees?

I actually think it’s important to name historically what has stood in the way of investments in public goods. Heather McGhee’s book The Sum of Us does an excellent job of laying out “drained pool politics,” and how historically white supremacists would rather fill in the public pools than integrate the pools.

Naming what has stood in the way will make it easier to assemble the multiracial coalition needed to win these guarantees. I do think there is a growing group of white voters who understand that our fates are linked and will advocate for a deeper investment in public goods as a way of building this multiracial democracy that we are all part of.

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