Any law passed by Congress, even with the noblest intentions is fraught with politics. Every member of Congress attempts to fold his or her pet project into a bill, even if it has nothing to do with it. The CARE Act, i.e. the $2.2 trillion stimulus bill is no different. We have funding for the arts and humanities and money for various corporate interests. Of course, it isn’t clear whether workers will get immediate relief, or will have to wait several weeks. Although businesses that take loans can have those loans forgiven if they agree to maintain their payrolls or rehire them, it nonetheless remains to be seen whether they will actually do so. What workers really need is liquidity. Many businesses may simply conclude that it is more cost-effective to lay workers off and restructure. Consider for a moment the restaurant owner in Manhattan who needs to adjust for less capacity as continued social distancing guidelines will require ensuring that all tables are at least six feet apart. Reduced capacity will mean fewer workers, in which case there is no need to retain them now. One wonders if a more efficient response couldn’t have been designed which would have been administered fully through the banking system rather than the hodgepodge of federal and state bureaucracies. The objective behind the stimulus package was to put money into workers’ pockets so that they would be able to pay their bills. Therefore, it is a misnomer to call this bill other than what it really is: a relief package. A stimulus would put money into people’s pockets so that they could make purchases, thereby stimulating greater aggregate demand for goods and services. What both workers and businesses need, especially amidst a government shutdown of the economy is liquidity. Wouldn’t everybody be better served with credit extensions at their banks? In other words, banks extending say up to $5000 a month in overdraft protection to be backed by the federal government would be more effective because it would be immediate. Workers against this overdraft protection would be able to write checks and even make withdrawals. Banks extending it would receive immediate payments from the federal government. Before the left dismisses this idea as just another bailout of the banks; it isn’t. It is a bailout of individuals through the banks. From the beginning of this crisis, the Fed has attempted to pump liquidity into the system through its traditional tools of top-down monetary controls. Lowering interest rates, thereby making it cheaper to borrow money in no way guarantees jobs will be maintained, especially if lock-down orders mean that nobody can go out and purchase anything. Moreover, traditional bailouts of large corporations don’t guarantee that jobs will be retained, especially if managers take the bailout money and buy back stocks. We need look no further than the Great Recession when bailout money was used to pass out large size bonuses, which were justified on the basis of contract. We are already hearing that money from the CARE act may not be reaching workers for several weeks, and that when it finally does, it will not be enough. Workers especially need relief now, and greater liquidity would not only help them immediately, but it might inject a boost of needed confidence into the system. Much of the lack of confidence, as reflected in the stock market, is derived from the uncertainty. For workers, it is uncertainty over being able to meet their expenses and pay their bills. For firms, the uncertainty stems from the slack-off in aggregate demand because nobody is really able to engage in economic activity. Because people are losing their jobs, there is even uncertainty in online markets because aggregate demand there is driven by purchasing power which has at least in the short-term been interrupted due to the loss of income. Increasing liquidity through generous overdraft programs at the banks could allow for some of this aggregate demand for goods and services to return. It could also be somewhat empowering for the typical worker who can now continue to make purchases without having to wait for the “government check” in whatever form it may take. Alternatively, banks could simply offer extended lines of credit to their customer and then use the clout to lobby for government payback. This too could be more effective, as politicians are all too willing to bail out banks before they bail out typical workers. This is also a lesson we learned from the Great Recession. Banks, it will be recalled, were too big to fail. Workers who couldn’t afford to pay their mortgages were simply a bad risk. Still, this would be a bank bailout with a twist. Only those banks guaranteeing worker liquidity would be eligible for bailout money. Those refusing to extend liquidity would get nothing. In this vein, it would be similar to Individual Development Accounts (IDAs) intended to provide assets to the poor. Were each individual to have an IDA, money would be invested from time of birth, and workers would pay into it as they currently do with Social Security. Instead of the range of social programs like unemployment insurance, Social Security, and public assistance, workers in time of need would simply draw on their IDAs, which could also be drawn on to pay for college and other types of human capital development. But it would give workers, especially those in the middle and bottom of the distribution assets, which, when compared to the more affluent, is precisely what they lack. The same would be the case in this crisis by giving workers greater liquidity through the banking system. Similarly when compared to workers at the upper end of the distribution who have savings to draw on, or who continue to draw regular paychecks because the nature of their work allows them to work remotely, they too would have liquidity to draw on. Although in a market economy there will never be real equality, a move to give workers greater liquidity does move us in that direction. Perversely, this could even unite the left and the right because by giving workers greater liquidity there would be greater fairness, but it would be administered through the private banking system.