Why should there be any widespread layoffs or unemployment?
We are in a public health crisis, not an economic crisis
There is a short-term revenue problem
Government should loan businesses the money they need to maintain salaries, contracts, etc
Figure out how to pay later
We are in a public health crisis, not an economic crisis
There is a short-term revenue problem
Government should loan businesses the money they need to maintain salaries, contracts, etc
Figure out how to pay later
It's a public health crisis with consequences for the economy, society, and politics that we need to deal with
But many politicians and economists appear to be treating this like a recession that requires stimulus
This is the wrong mentality
But many politicians and economists appear to be treating this like a recession that requires stimulus
This is the wrong mentality
Basically everybody needs to get paid to take a vacation for few months this year
Yes, the economy will inevitably contract because productivity will be lower
But the treatment of this problem like there was a recession required Keynesian demand stimulus is fighting last war
Yes, the economy will inevitably contract because productivity will be lower
But the treatment of this problem like there was a recession required Keynesian demand stimulus is fighting last war
War remains the right metaphor for fighting coronavirus
When you go to war you start building tanks before you figure out how to finance it
When you go to war you create a national bank headed by a trusted person to finance the ventilator, er, tank factories
When you go to war you start building tanks before you figure out how to finance it
When you go to war you create a national bank headed by a trusted person to finance the ventilator, er, tank factories
Anybody who is laid off is hired by a govt agency to work on the war effort
Today that might be manufacturing medical supplies, cleaning hospitals, or working at ubiquitous testing labs
The more testing we do the sooner we can adopt Asian model & return to semi-normal life
Today that might be manufacturing medical supplies, cleaning hospitals, or working at ubiquitous testing labs
The more testing we do the sooner we can adopt Asian model & return to semi-normal life
US GDP in 2019 was $22 Trillion
If econ. contracts 20 - 50%, we'll need closer to $10 trillion than $1.5 trillion
Going industry by industry, $1,500 check by $1,500 check, is going to be too slow, inefficient, and subject to corruption, special interests, etc
If econ. contracts 20 - 50%, we'll need closer to $10 trillion than $1.5 trillion
Going industry by industry, $1,500 check by $1,500 check, is going to be too slow, inefficient, and subject to corruption, special interests, etc
"The parallel here is WWII, spending big on the battlefront — public health efforts, like ventilators and masks — and asking personal and economic sacrifices from individuals to defeat the virus and get life back to normal again."
Spot-on @jimtankersley
nytimes.com/2020/03/22/us/…
Spot-on @jimtankersley
nytimes.com/2020/03/22/us/…
"Congress should create a time-limited government corporation, a Health Finance Corporation. It should be modeled on the Reconstruction Finance Corporation, created during the Depression and used to support the New Deal and the World War II mobilization."
bostonglobe.com/2020/03/13/opi…
bostonglobe.com/2020/03/13/opi…
"The Health Finance Corporation would be an efficient one-stop shop for financial resources in this crisis. It could fund clinics, factories, emergency field hospitals, quarantine centers, civilian supply — whatever is needed to get the nation through the crisis."
" It could pay for emergency R&D by the NIH, universities, and drug laboratories. It could make grants to existing hospitals to buy beds and add staff. It could rescue critical medical goods suppliers. It could do all of this rapidly, with public oversight but a min. of red tape"
The only way we know how to get back to semi-normal life is the way East Asian nations have, which is through widespread testing, contact tracing, and quarantining
Some amount of national and centralized oversight is required to oversee this, if only to make the data available
Some amount of national and centralized oversight is required to oversee this, if only to make the data available
At the end of this coronavirus we should have a biomedical infrastructure that allows for cheap, rapid, and widespread testing to create what @balajis calls "green zones and red zones"
Coronavirus may be far milder than 1918 flu, but an epidemic like 1918 could still occur
Coronavirus may be far milder than 1918 flu, but an epidemic like 1918 could still occur
As such, we need to build out the national testing and biomedical infrastructure so we can respond to future pandemics in the way East Asian nations did, readied, as they were, by SARS and MERS
S. Korea had prepared better which allowed its private labs to quickly create tests
S. Korea had prepared better which allowed its private labs to quickly create tests
"The Health Finance Corporation could raise funds by mobilizing private capital. As a wholly-owned government corporation, it would have no shares. But it could issue bonds, backed by the full faith and credit of the US government."
"With the entire Treasury yield curve under 1 percent, there is no financial constraint. Indeed, private investors are clamoring for safe government bonds. There is no need for new taxes right now."
"The way past this seeming tradeoff is to remove *all* needless barriers to deployment of diagnostics, drugs, vaccines, telemedicine, autonomy. Wartime innovation. Stop the virus to shorten lockdown."
@balajis
@balajis
Unemployment will be 30% by second quarter of 2020 without government action, says President of Federal Reserve Bank of St. Louis
The highest rate of unemployment during the Great Depression was just under 25%
Think about it
bloomberg.com/news/articles/…
The highest rate of unemployment during the Great Depression was just under 25%
Think about it
bloomberg.com/news/articles/…
@jimtankersley Wow
This just now from White House Press conference
"We are seeing the greatest mobilization of the industrial base since World War II," says Senior Trump Econnomic Advisor Peter Navarro
This just now from White House Press conference
"We are seeing the greatest mobilization of the industrial base since World War II," says Senior Trump Econnomic Advisor Peter Navarro
"“It is totally stupid to lose a major industry because of a virus,” he said. “Why would you want to do that?”
Bullard urged that unemployment insurance cover 100% of lost income for workers, and call it “pandemic insurance” since the disruption is intended to block coronavirus"
Bullard urged that unemployment insurance cover 100% of lost income for workers, and call it “pandemic insurance” since the disruption is intended to block coronavirus"
Navarro says White House won't hesitate to use the Defense Production Act to solve problems in the supply chains
Followed by strong message to hoarders
"Get them to market, get them to us, we'll pay you a good price, and if you don't do that we're going to come for you"
✊🏼❤️
Followed by strong message to hoarders
"Get them to market, get them to us, we'll pay you a good price, and if you don't do that we're going to come for you"
✊🏼❤️
