The American Political Economy Confronts COVID-19

Jacob S. Hacker, Alexander Hertel-Fernandez, Paul Pierson, and Kathleen Thelen

As this group met in Cambridge in late February 2020 to finalize the chapters for this

project, we did not know that a COVID-19 super spreader event was unfolding less than three

miles away—ironically, at the conference of a major bio-technology firm. By October, estimates

suggested that the strains unleashed at that single event might have infected 300,000 Americans

(Wines and Harmon 2020). Well before then, of course, it was clear that a world-historical

calamity was unfolding before us.

Crises fundamentally challenge existing institutions and practices. For this reason, they

can be deeply illuminating. Like “stress tests” of financial entities, they reveal structural sources

of resilience and weakness that are less evident during normal periods (e.g., Gourevitch 1986).

None of the rich democracies has emerged from the COVID-19 stress test unscathed. Yet it is

already apparent that the United States has performed poorly compared with other advanced

economies on a number of dimensions. In some cases, these are differences of degree. In others,

the United States has stood out in positive ways (e.g., the extremely rapid development of

effective vaccines and new treatments). But in many cases, the American response was clearly

subpar, with results that have fallen hardest on vulnerable populations.

Our goal in this chapter is to examine how this decidedly mixed record is linked to the

key features of the American political economy explored in this volume. Our main contention is

that the challenges the United States faced are deeply revealing of these key features, particularly

the three highlighted in our introductory chapter: (1) the fragmentation and decentralization of
American political institutions, (2) the particular nature of U.S. interest organization; and (3) the

deep racial divisions embedded in the American political economy.

Evaluating the American Experience

Although few will dispute our assessment that the United States has seen many poor

outcomes, it is important to be clear about what we know and do not know at this time. As we

write, vaccinations are occurring, albeit at a slower-than-expected pace, and a new and more

infectious strain of the virus is spreading rapidly. It will be some time before we have the full

data and perspective that would allow a definitive assessment of the American record. Moreover,

such an analysis would require grappling with difficult counterfactuals we only briefly discuss in

this chapter: What if a Democrat had been in the White House, or a more conventional,

experienced Republican? What if the Senate had switched from GOP to Democratic hands in

2018 along with the House? Such counterfactuals are necessary for separating the effect of deep

structural features of the American political economy from the effect of more contingent factors,

such as the outcome of a particular election or skillset of a particular leader.

What we can do at this juncture—and what we seek to do in this chapter—is to draw out

a set of crucial ways in which core features of the American political economy affected the

problems that the United States faced and the character of the country’s response. Not all these

effects were negative. We have already noted the United States’ remarkable advances in

biotechnology in response to the crisis. We would also emphasize the large relief package

passed by Congress in March 2020 (the CARES Act), which substantially mitigated the

economic fallout of the crisis, though its benefits ended too quickly. Still, there is a strong case

to be made that key features of the American political economy made the task of responding to
COVID-19 harder. Put another way, the pandemic posed a particularly difficult stress test for

the United States because it implicated and exposed aspects of the American political economy

that were highly vulnerable to a crisis of this sort.

This is also our basic answer to the counterfactual questions just posed. We agree with

the now-conventional wisdom that President Trump and his administration handled the COVID

crisis badly; and we think it made a significant difference that the House and Senate were

controlled by different parties, with the more pivotal Senate in GOP hands. But we also believe

we can identify policies, outcomes, and political dynamics that would likely have been similar

with a different configuration of partisan power. With much less certainty, we believe too we can

parse a few of the most important interactions between the more mutable features of the

American political economy and those, like decentralized federalism, that are deeply entrenched.

The Big Three: Health, Jobs, Race

We start, however, by highlighting what we see as the three biggest areas where the

United States faced especially severe problems: health, employment, and inequality.

Health. Since the outset of the acute phase of the pandemic, the United States has stood

out among large affluent democracies for its very high number of cases and deaths.151 Of course,

the toll of the disease has been tragically mounting everywhere, but the United States’ relative

position has remained relatively stable. As of early January 2021, the total number of confirmed

cases per million people in the United States (roughly 63,000) is the highest in the rich world,

151
These and the other health statistics come from Our World in Data

(https://ourworldindata.org/covid-cases) as of January 4, 2021.

though nearly matched by Belgium. The next group of hard-hit affluent democracies—France,

Italy, Spain, and the United Kingdom—has about two-thirds the U.S. level. The average for the

European Union is a little over half the U.S. level. The United States’ Northern neighbor,

Canada, has a cumulative confirmed case rate just over one quarter the U.S. level.

Confirmed cases are reliant on testing, so experts consider death rates a more revealing

comparative metric (though they are reliant on accurate reporting). However, it is important to

recognize that a sizable share of those infected with COVID-19 experience severe and often

long-lasting health effects even when they recover. Thus, the United States’ very high number of

confirmed cases suggests a very large and lasting negative health effect from the pandemic.

The United States looks less distinctive when the focus is death rates. Italy, the United

Kingdom, Spain, and France all have experienced similarly high mortality from the pandemic,

and Belgium stands out with a dramatically higher rate. Nonetheless, the U.S. death rate is on

the high end for rich democracies. In many ways, the US-EU comparison is revealing.

Comparable in total population, with responses from country to country varying as they have

from U.S. state to U.S. state, the European Union as a whole has experienced a death rate that is

roughly 80 percent of the U.S. level. Canada’s death rate is less than half the United States’.

Employment. Economic outcomes may take longer to fully assess. Like other developed

democracies, the United States took a substantial economic hit from the pandemic. The CARES

Act, passed in March 2020, and a smaller follow-up relief package, passed in December 2020,

threw a lifeline to ordinary Americans and cushioned the decline. The Federal Reserve, able to

act unilaterally, also moved aggressively to insure financial markets remained liquid, though

these actions likely exacerbated inequality by helping asset holders more than workers (e.g.,

Kocherlakota 2020). These were remarkably robust measures—by many accounts, the
immediate U.S. fiscal response was one of the largest across the developed world—and they

were all the more remarkable given the difficulty of enacting large-scale spending initiatives in

the United States (Anderson et al. 2020).

However, the jump in unemployment in the United States was also uniquely large. The

average unemployment rate across all OECD countries rose from 5.5 percent to 8.8 percent

between March and April 2020, according to OECD labor force statistics. By contrast, it grew

from 4.4 percent to 14.7 percent in the United States. Although employment slowly rebounded,

by early 2021, roughly 10 million of the 22 million jobs that had disappeared in the spring had

not returned.

No less important, any analysis of the country’s generous relief package should bear in

mind that a large share of these funds were required to compensate for pre-pandemic social

policies that were far less generous than those of other rich democracies—and not only less

generous, but also more closely tied to work. A sizable feature of the U.S. relief bills, for

example, was spending to augment the rich world’s least universalistic health system, and in

particular to help many of the newly unemployed who lost job-based health benefits when they

most needed them.

In assessing the ultimate economic impact of the crisis, a great deal will turn on what

happens when these extraordinary spending programs expire, as well as on the types of firms that

survive the crisis and the kinds of jobs to which unemployed Americans return. Already,

however, we know that the pandemic has hit low-wage workers much harder than higher-wage

workers and that smaller firms have experienced much higher casualty rates than larger ones

(Chetty et al. 2020; Dalton et al. 2020). Indeed, corporate behemoths like Amazon and Walmart

have gone on hiring sprees to accommodate surging demand for household goods. Together,
these two trends imply that the American political economy that will emerge from this crisis may

well exhibit even higher levels of inequality—across workers, households, and firms (Autor and

Reynolds 2020). Such a divergence is already reflected in the stock market boom that took off

even as millions of American workers were losing their jobs (Phillips 2020).

Compounded inequalities. This last point brings us to the final area where the United

States has faced particular challenges: the health and economic burdens of the pandemic have

varied dramatically across income and racial and ethnic groups, reflecting systematic

disadvantages that are generally much more pronounced than those in other rich democracies

(Egede and Walker 2020). Low-income communities of color (and especially Black

communities) disproportionately faced sickness and death, reflecting their greater likelihood of

employment in frontline occupations, their more limited access to health care, and the

disproportionate burden of social and personal risk they bore (due to crowded housing, lack of

affordable child care, high rates of asthma, and other systemically grounded inequities).

Workers and families of color also experienced substantially higher levels of deprivation

and hardship than white Americans, in part because they were less well protected by U.S. social

policies and more reliant on cash-strapped local public services, such as public schooling (CBPP

2020; Parker al. 2020). We lack fine-grained comparative data that would allow us to know if

these inter-group inequalities have strong analogues abroad. But given the United States’

relatively meager welfare state, decentralized and disparate educational financing, high levels of

inequality, and long legacy of racial hierarchy, we suspect the pandemic will magnify racial and

ethnic stratification more in the United States than in other rich democracies.

These fateful effects of the COVID-19 crisis cast in sharp relief the special challenges

that the United States faced. In the next three sections, we look at how these challenges were
linked to the key distinctive features of the American political economy discussed in the

Introduction, starting with the extreme institutional fragmentation of U.S. economic governance.

Institutional Fragmentation and Policy Failures

Perhaps the most notable feature of the American political economy is the degree to

which it combines extreme institutional fragmentation with politicized and uneven administrative

capacities. During the COVID-19 crisis, this fractured system was everywhere to see.

Institutional Fragmentation

On clearest view were the hurdles posed by America’s particular version of federalism.

By itself, federalism need not be a barrier to addressing widespread social crises. Other wealthy

federal systems (such as Australia, Canada, and Germany) mounted well-coordinated and

effective responses (Rozell and Wilcox 2020). In Germany, for example, the national

government met almost continuously with state leaders to coordinate a strategy that combined

strong central direction with the flexibility in local responses allowed by decentralized

administration.

Needless to say, this is not how the process unfolded in the United States. Within weeks

of the outbreak, the states were competing with one another for necessary medical equipment,

setting in motion bidding wars over crucial supplies that not only raised the prices that revenue-

strapped states had to pay, but also hindered any coordinated effort to ensure these supplies

flowed to the areas of greatest need (Ranney et al. 2020). The country’s leading infectious

disease expert, Anthony Fauci, channeled the sentiments of many knowledgeable observers
when he lamented that “disparity among how states do things has been a major weakness in our

response” (quoted in Budryk 2020).

Of course, the Trump administration greatly exacerbated the challenges of federal

coordination. But the inherent scale of that challenge reflected the key structural features of

American federalism examined in this volume. In particular, the unusual lack of built-in revenue

sharing and the unevenness and insufficiency of automatic stabilizers like unemployment

benefits elevated the need for coordinated federal action involving not just the executive but also

Congress and the courts. Thus, the extreme character of institutional fragmentation made

nationwide coordination particularly important. Given stark partisan differences at the federal

level and across “red” and “blue” states, it also made such coordination particularly elusive.

In its absence, states and localities took wildly different approaches to rules governing

masks, lock-downs, and social distancing. Not only were some states and cities slow to respond,

but some actively resisted efforts at limiting commercial activity or requiring public health

safeguards. Indeed, prominent GOP-controlled states used “preemption” against cities and

counties that sought to take more proactive measures (Davidson and Haddow 2020; Rainwater

2020). Thus, the pandemic highlighted an increasingly striking feature of the American political

economy: the growing frequency of policy stand-offs between red states and blue cities.

Given the United States’ distinctive form of fiscal federalism, economic downturns

always present a double-bind for state and local governments: they face increased demands on

the safety nets they fund at precisely the moment their revenue falls. The pandemic-induced

recession magnified these pressures, as states and localities had to fund not just typical social

programs but also an emergency health response. Put simply, the COVID-19 crisis hit states

where they were most vulnerable given the structure of the American political economy.
 To be sure, a divided Congress and an erratic executive compounded these

vulnerabilities. As noted, Congress moved swiftly to pass a large relief bill in March 2020 that

included $150 billion in aid to state and local governments. But it quickly became clear that

much more assistance was needed. Within months, states and localities had furloughed or laid off

1.2 million workers, nearly twice as many as in the Great Recession (Leachman and McNichol

2020). Yet Republicans in Congress refused to address this acute need, seeing an opportunity to

squeeze social programs and public sector unions. Explaining his party’s opposition, Senate

Majority Leader Mitch McConnell argued such aid was a “blue state bailout” (Kilgore 2020). In

fact, red states were at least as fiscally devastated as blue states; national Republicans simply did

not place a high priority on helping them (as Grumbach, Hacker, and Pierson’s chapter argues

was true on many other economic issues). Thus, the combination of decentralized federalism and

stark polarization undercut health and economic recovery in the states.

Weak and Captured State Capacity

State efforts might have turned out very differently if the federal government had been

more active and effective. Without minimizing the degree to which the Trump administration

mishandled the federal response, we want to highlight that a major problem throughout the crisis

was the weakness and politicization of the federal bureaucracy examined in this volume.

A striking example involves the Occupational Safety and Health Administration (OSHA),

the federal agency charged with setting and enforcing workplace health and safety standards.

Even under the most favorable conditions, OSHA lacks sufficient resources and authority to fully

realize its mandate. Upon entering office in 2017, the Trump administration further weakened

and politicized the agency. COVID-19 thus hit when OSHA’s already-insufficient enforcement
staff had fallen to the lowest levels in decades and its agency leadership was in turmoil

(Berkowitz 2020). With OSHA largely absent from the scene, workplaces became an important

source of transmission of the virus between workers and consumers and among workers

themselves. Tragically, it was often already-disadvantaged workers who bore the brunt of the

virus’s spread across weakly regulated workplaces (e.g. Kindy 2020).

At the state level as well, diminished administrative capacity hampered an adequate

response. Decades of “starving the beast” had produced a legacy of anemic bureaucracy in many

states. For example, state unemployment programs relied on outdated software that was

overwhelmed by the flood of applicants (Lin 2020). At the height of the unemployment crisis,

an estimated half of the unemployed were unable to submit a claim as a result of antiquated

systems (Zipperer and Gould 2020; see also Cohn 2020). The incapacities of state unemployment

systems were no accident; for decades, cross-state business groups had lobbied effectively to

reduce the reach, generosity, and effective delivery of jobless benefits. Indeed, at both the state

and federal levels, weak bureaucratic capacities often reflected the power and parochialism of

business interests and the absence of powerful countervailing interests—our next topic.

The High Price of Disorganized Interests

The organization of major economic interests in the United States features extremely

weak coordinating capacity in the private sector combined with a massive imbalance of power in

favor of business. This distinctive combination also had significant implications.

Weak Labor, Imperiled Workers

In many European countries, labor representatives were included alongside business

leaders and health experts in peak-level discussions over the COVID response (ILO 2020).

Moreover, and more important to the lived experience of ordinary workers, stronger employment

protections and a more pervasive union presence in most of Europe allowed workers to call out

unsafe conditions with less fear of retribution. In the United States, the overall weakness of

organized labor meant that most of the economy was marked by a free-for-all of voluntary

standards and weak testing—and widespread sickness (Hertel-Fernandez et al. 2020).

As noted, the CARES Act included very generous, if time-limited, support for workers

who lost their jobs. By contrast, measures to keep workers attached to their employers until the

economy recovered were less successful. In Europe, so-called “short time work” policies formed

the centerpiece of labor market responses to the pandemic. In almost every European country,

such policies were deployed (or quickly created, as in the UK) to allow workers to earn

subsidized wages and keep their jobs. Although the American CARES Act included provisions

to encourage the use of similar short-time compensation, the program was small, states were

hard-pressed to manage it, and there were few takers in any case because of the business-labor

coordination it would have required (Krolikowski and Weixel 2020).

Instead, the main U.S. counterpart to such measures was the Paycheck Protection Plan

(PPP). This policy embraced the same goals as European short-time work policies: to allow

small firms to continue to pay workers whose employment was temporarily on hold (Hassel and

Thelen 2020). On paper at least, the benefits to workers were also generous, subsidizing firms to

retain their furloughed workers at full pay. However, unlike the European variant, the American

PPP was based on loans to companies (rather than direct wage subsidies) and was designed to
cover both payroll and other operating costs. The prospect of full loan forgiveness served as a

powerful incentive for employers to use the funds to pay workers. But the small companies to

which the program was directed confronted a daunting number of other pressing expenses,

including mortgage interest, rent, and utilities payments. Small and medium-sized business

owners thus faced significant uncertainties about loan forgiveness, causing some who qualified

for funding to decline to spend it for fear they would run afoul of the rules (Cowley et al. 2020).

Corporate Parochialism and Predation

The American COVID response also reflected the privileged position of business in the

American political economy. The relief package that Congress crafted for big businesses carried

none of the same conditions that had been attached to small- or medium-sized business relief.

Not only was financial support not contingent on avoiding layoffs, it did not even include

measures to force companies to limit dividends, reduce executive pay, or forgo stock buybacks

(Stein and Whoriskey 2020). While the Fed’s interventions clearly helped support the economy,

their efforts also reinforced inegalitarian trends – an aggressive stance on interest rates helped

boost stock prices, while the loan program for small and medium-size firms, as noted, was

disappointing. More fundamentally, the Fed itself could not engage in the kind of fiscal stimulus

that could direct resources to those suffering the most acute economic pain, and Congress largely

ignored the Fed’s insistence that more action was needed.

In other rich democracies, government agencies administered relief programs directly

according to specified criteria (Hassel and Thelen 2020; ILO 2020). By contrast, the PPP

program reflected the United States’ longstanding reliance on the private sector to deliver

government benefits. Any firm wishing to tap into PPP funding was directed not to a
government agency but to one of a number of designated banks that would then vet the

application and disburse the funds. This arrangement proved lucrative for the banks (Covert

2020; Fischer and Gould-Werth 2020); it also allowed banks to insert additional conditions and

hurdles for companies seeking assistance. Unsurprisingly, funding went first (and in some cases

only) to companies that already had accounts with these banks, especially to the biggest accounts

(Cowley and Flitter 2020). Large sums of relief thus flowed to the large businesses for whom

the policy was not designed—by one estimate, more than half of the small business funding

wound up in the accounts of large companies (O’Connell et al. 2020)—while small firms without

a house bank struggled to get aid (Davis and Haddon 2020). In effect, private lenders in the

United States were in a position to pick winners and losers, while collecting a fee on each loan.

Beyond individual firms and sectors, large business’ organized representation in

Washington proved very successful at looking after narrow corporate interests throughout the

crisis—at times at the expense of public health and the long-term recovery of the economy.

OSHA, for example, was hamstrung in part because Trump had selected as Secretary of Labor a

business favorite: Eugene Scalia (son of the late Supreme Court Justice Antonin Scalia), who had

spent decades as a high-paid corporate lawyer fighting labor regulations (Press 2020). Under

Scalia, the Trump Department of Labor notably dropped an Obama-era rulemaking drive for a

new permanent infectious disease standard—a regulation that might have offered significant

workplace protection in the pandemic for health care workers (OSHA n.d.). Once COVID-19

began spreading across the United States, Scalia declined to use OSHA’s statutory authority to

issue an Emergency Temporary Standard that would have set legal requirements for employers

to protect their workers against the virus (Press 2020). Instead, OSHA issued confusing

guidelines that were merely advisory and not enforceable.

 Scalia’s role was not idiosyncratic. Not only was he a likely pick for the Labor

Department under any GOP administration; he had made his name working in the courts to fight

workplace protections for the U.S. Chamber of Commerce (Press 2020). That the nation’s

leading anti-labor lawyer would head the Department of Labor tells us much about the priorities

of the contemporary Republican Party. That this lawyer was so closely aligned with the Chamber

tells us much about the priorities of the most powerful organs of American business.

Even as the crisis deepened, there was little sign that these highly conservative—and

particularistic—priorities had fundamentally changed. The Chamber’s top legislative aim in

2020, for example, was not continued aid to the unemployed or funding for states and localities

or even stronger rules to protect public health, but legal immunity for businesses if front-line

workers became ill with or died from COVID on the job (Kopp 2020). The Chamber also sought

to block OSHA and similar state agencies from issuing new workplace health and safety

regulations, preferring voluntary employer initiatives (Brody 2020). These priorities were

mirrored in the demands of other industry groups: the National Restaurant Association, for

instance, opposed the efforts of health and safety agencies to regulate inside dining, likely an

important source of COVID-19 spread (NRA 2020).

The Radicalization of America’s Conservative Party

Tellingly, organized business’s narrowest demands received the strongest support from

its Republican allies in government. Many business leaders and groups called for additional

efforts to boost the economy. But in the wake of the initial relief bills, McConnell made

corporate liability limits his top priority in any future relief legislation (Bolton 2020).

Meanwhile, at least sixteen states—nearly all under Republican control—enacted COVID-

related liability shields for businesses through legislation or executive action at the behest of

business demands (Hishamunda and Young 2020).

We have argued that America’s conservative party has come to combine the economic

priorities of corporate lobbies with the polarizing appeals of right-wing populism. The former

was most evident in federal negotiations over relief legislation. The latter was most evident in the

resentment-fueled response of the conservative movement to the pandemic itself. Polarization

over the pandemic began with elected officials but quickly spread to the activist mass public,

which in turn put further pressure on state and local leaders to ignore or downplay the crisis. In

no other rich democracy did opinion and behavior around commonsense public health measures

like mask-wearing and social distancing become so polarized along partisan lines. It was yet

another reminder of the distinct governance challenges created by a two-party system in which

one party is closer to fringe right-wing parties than to conventional center-right parties abroad.

The partisan polarization over COVID-19 divided places as well as people: red states vs.

blue states, rural areas vs. urban areas, and those early on the disease “curve” vs. those catching

up with them. To a remarkable extent, the Trump administration and congressional Republicans

indicated that they were siding only with places where support for their party and policy

approach were high. The stand-off over aid to states and localities—devastating for the pandemic

response and the recovery—was emblematic. It also signaled a deeper and more pernicious

division that both reflected and reinforced the crisis.

COVID’s Unequal Consequences

COVID-19 was like tracer injected into the American political economy, illuminating

people and places disproportionately vulnerable because of systemic discrimination and unequal
power. And what became clear almost immediately was that those most vulnerable were mostly

nonwhite (Parker et al. 2020). The racialized structure of the American political economy helps

explain why. Here, we focus on one particularly important dimension of this systemic racial bias:

how geographic segregation and occupational discrimination interacted with differential access

to public protections to compound the inherent vulnerability of nonwhite Americans.

A Racialized Welfare Regime

In comparative perspective, American workers are particularly vulnerable to economic

and health risks, and this is especially true for nonwhite workers. This reality became

dramatically more evident during the pandemic. In virtually every respect, nonwhite workers

were more vulnerable, less powerful, and less protected.

Consider sick pay and health coverage—two policies especially important during a

pandemic, and not just for covered workers. When citizens are insured against health costs and

entitled to paid days off, they are more likely to seek the care of clinicians and to stay home if

they are sick. Yet the United States lacks either universal health insurance or public sick pay.

Instead, the majority of workers receive insurance through their employers. Needless to say, in a

health crisis in which job loss is rife, these arrangements magnify rather than moderate risk. A

weak system of social protection looked even weaker in the COVID crisis.

Sick pay was mandatory across the European Union well before the virus hit, and many

European governments further expanded it in response to the crisis. By contrast, less than a third

of American workers in the lowest income decile had access to even a single day of paid leave

when the crisis came (BLS 2017). At the height of the pandemic in April, an analysis of

“essential workers” reported that only 34 percent were certain they would receive paid time off if
they had a fever, a proportion that fell to 28 percent in the lowest quartile of the wage

distribution (Hertel-Fernandez et al. 2020). As a result, disadvantaged racial and socioeconomic

groups were much more likely get sick or sicken others at work (e.g., Chang et al. 2020).

Congress did pass an emergency federal leave program as part of its omnibus response to

the crisis in March 2020. But the program was limited: workers were ineligible if they worked at

a company with more than 500 employees, and businesses with fewer than 50 people were

allowed to opt-out. With those broad restrictions, potentially as few as a quarter of workers were

estimated to qualify for the temporary leave benefit (Miller and Tankersley 2020).

Segregation and Suffering

The pandemic exposed another critical way in which race pervades the American

political economy. The legacies of slavery, Jim Crow, and racialized zoning live on in stark

geographic segregation and a huge wealth gap between black and white families. The two are

intimately related: housing is the biggest component of both personal wealth and local revenue

bases. In a crisis, these interlocking disparities ramify as acute insecurities. At the household and

community levels, lack of wealth increases the need for public protections. Yet in our

decentralized federal system, the same geographically grounded inequalities undercut the

generosity and reach of those protections. These strains on the safety net for nonwhite Americans

due to wealth and location are on top of those just discussed due to employment-bound benefits.

Many important safety net programs are run through the states, with varying levels of

generosity, coverage, and administrative capacity. For reasons that have much to do with the

political consequences of racial division, the adequacy and effectiveness of these programs is

closely related to the share of state residents who are nonwhite, with larger minority populations
associated with poorer programs (e.g., Hero 2000). Moreover, black workers are overrepresented

in state and local jobs, which have faced devastating cuts. Here, too, the lack of a stronger

federal role amid the crisis inflicted disproportionate harm on nonwhite Americans.

In few areas was this more apparent than with regard to public schooling—essential not

just to the education of the young but also to the ability of their parents to work. But with schools

going remote due to COVID-19, this prerequisite of both child opportunity and parental

employment was thrown into disarray. The (still-spotty) evidence suggests that remote K-12

education was most prevalent precisely in the most disadvantaged communities (Smith and

Reeves 2020). Early results suggest that these disruptions will permanently disadvantage poor

and nonwhite students living in low-income communities (Agostinelli et al. 2020)—the students

already most disadvantaged in America’s highly stratified educational system. The effects on

their parents are likely to be just as disparate. Thus, the pandemic has cast in sharp relief the

ways in which deep inequities are built into America’s decentralized governance.

Among those inequities is one we have not focused on in this volume, but which future

work must grapple with: the stark gender disparities seen in many elements of the COVID crisis.

Most notably, the employment effects of the crisis disproportionately fell on women, and in

particular working mothers. The United States has long been seen as an exemplar of the “liberal

market” approach to female employment, in which high levels of female labor force participation

coexist with weak supports for working parents (e.g., Iversen and Rosenbluth 2011). Yet female

workforce participation has been falling behind the levels seen in other rich democracies for

some time, and the COVID-19 crisis detonated the fragile private arrangements that many

families had cobbled together, with devastating consequences for those with limited resources. It

was not just that women were more likely to be in affected occupations; it was also that they
were uniquely vulnerable to the collapse of public supports given household divisions of labor

(Djankov and Zhang 2020). Just as an approach focused on political economy highlights how

racial and ethnic division are built in economic and policy structures, so too it will have to

understand how gender divisions are embedded in such arrangements as well.

A Clarifying Crisis

It is far too soon to issue a final verdict on the U.S. response to COVID-19. That has not

been our goal in this chapter. Rather, we have aimed to show how the American experience in

the pandemic displayed many of the core structural features of the American political economy.

Extreme institutional fragmentation, the distinctive character of organized interests, and

profound racial and ethnic inequalities were all on vivid display throughout the crisis, and they

made responding to it immensely harder.

We started this chapter by observing the crises lay bare fault lines in societies. We would

like to think that they also lay bare the strength and resilience of a society too. As we write, a

new Democratic administration and new Democratic Senate is poised to step in, and the

weakness of the Trump administration’s response to COVID-19 is surely a major reason why.

Yet the Biden administration and congressional Democrats too will face daunting obstacles to

refashioning governance in a manner commensurate to the current challenges. If the analyses

offered in this book carry any single message, it is that the structure of the American political

economy will heavily shape and constrain politics and policy going forward.