Urgently Needed: A “New” New Deal in America
James “Jim” Johnson, Jr., Ph.D.
The coronavirus pandemic has totally disrupted the American economy, shutting down businesses, idling workers and sending the stock market into a tailspin. Although the pandemic is far from over, concern over the attendant economic malaise is creating enormous angst and fostering intense political discourse regarding “reopening” the economy.
While the most appropriate time to reopen the economy is debatable, one thing is clear: The economy as we knew prior to the pandemic is unlikely to return. The $2 trillion stimulus package and other financial tools the federal government is leveraging, while unquestionably necessary and urgently needed, will not be adequate to fully revive the U.S. economy and put Americans back to work.
Despite federal loans and grants to weather the pandemic-induced vagaries, many small businesses will find it difficult, if not impossible, to survive and prosper in the aftermath of the pandemic, which will permanently ide workers and adversely affect the supply chains that supported their operations. Fully one-half of small businesses, according to JP Morgan Chase, have only fifteen days of cash on hand to buffer any loss.
If we are to return to any sense of normalcy, America needs a “New” New Deal, one that focuses laser like on fixing spaces and places in our economic system. Not just roads, bridges, airports, seaports, and broadband access issues that undergird the nation’s digital divide. But, also, sick buildings—aging and structurally deteriorating houses, schools and public venues—that expose residents and the public to a host of environmental hazards (mold, mildew, asbestos and lead) that suppress the immune system and substantially reduce life expectancy.
In America, these problems are most evident in hyper-segregated and concentrated-poverty neighborhoods and communities. African Americans and other people of color disproportionately inhabit these areas, which are proving to be hotspots for coronavirus infections and deaths.
A “New” New Deal requires a comprehensive review of existing federal, state and local government policies and regulations governing land-use as well as all types of development (residential, retail, commercial, etc.). Moving forward all development and redevelopment projects must adhere to the triple-bottom-line-principles of sustainability. That is, they must minimize—to the maximum extent possible—adverse impacts on natural resources and the physical environment; adhere to principles of social justice; and, in the process, return equitable shareholder/stakeholder value.
We can leverage a host of “equity tools” to achieve these desired outcomes. In striving to create diverse, healthy and viable neighborhoods and communities, for example, it is vitally important to abandon exclusionary zoning regulations that support segregation or not-in-my-back-yard (NIMBY) behaviors and embrace inclusionary zoning polices that promote integration or YIMBY.
The “New” New Deal for America also must create an inclusive supply-chain management system that levels the playing field for historically underutilized businesses that aspire to access government contracts—in this instance, to fix the nation’s deteriorating spaces and places. However, we must not position supplier diversity in contracting and procurement solely as a compliance issue or legal requirement under equal opportunity laws. It also—and perhaps more importantly—must be framed as a strategic business imperative in an increasingly more diverse—racially, ethnically and socioeconomically—society and marketplace.
We know that minority suppliers are more likely than majority suppliers to hire minority workers. Thus, it is reasonable to surmise that an inclusive system of contracting and procurement will address another critical issue: the enormous under-representation of people of color in some economic sectors like transportation.
Additionally, the “New” New Deal must dismantle barriers to economic participation in the American enterprise system. Many of the known barriers are the product of discriminatory policymaking, especially in the areas of crime and criminal justice, which disproportionately affect people of color, in general, and black males in particular. By eliminating such barriers, we can begin to solve America’s inequality problem and rebuild the nation’s middle class in the process.
Finally, we need to mobilize collective ambition to successfully execute the “New” New Deal. There are two critical elements to building collective ambition around such a policy intervention: collaborative engagement of diverse stakeholders and disciplined execution of strategy. In the words of Jim Collins, author of “Good to Great,” we need to make sure every American—irrespective of political affiliation—is on the “New” New Deal bus, seated in the right seat and headed in the right direction to ensure successful implementation with fidelity. We build collective ambition by helping America’s diverse citizenry recognize both the personal and societal benefits of such an initiative. This is a surefire way for America to regain its greatness.
James H. Johnson, Jr. is the William Rand Kenan, Jr. Distinguished Professor of Entrepreneurship & Strategy at the Kenan-Flagler Business School at UNC-Chapel Hill and Director of the Urban Investment Strategies Center at the Frank Hawkins Kenan Institute of Private Enterprise. Wendell M. Davis is the Chief Executive Officer of Durham County Government.