I hope I am wrong but...
We seem to be rapidly heading for easily the worst recession in our lifetimes. Possibly worse than the 1930s.
This might make many feel more anxiousm, but there is light at the end of the tunnel I promise. [thread]
1) Partly because even temporarily 'freezing' the economy is creating a lot of chaos & destruction. Very unlikely things will be back to normal quickly.
2) Trump's response has been abysmal: no preparation and no protection of jobs. It will affect everyone.
Secondly, even if the worst bears out, there is hope on the other side. Keep reading!
European situation isn't that much better.
- Spain: Jobless claims spike by most on record.
bloomberg.com/news/articles/…
France, Italy, Germany will all see huge spikes too
1m Bangladeshi workers have already been laid off
npr.org/sections/coron…
China will see a huge collapse in demand for products as Americans cut back too.
FIRST PROBLEM:
We can't easily come out of this spiral because we can't open everything as normal in 3-6 months.
This instantaneous and worldwide collapse in demand will have ripple effects too.
- collapse in housing market
- bailouts for the entirety of travel and tourism industries
- possibly another banking crisis.
- underwriting millions of employers
- and huge increases in health spending
governments will face:
- collapsing tax revenues
- difficult choices on rescuing entire industries (airlines, tourism). That collapse means more job losses.
1) There cannot be a quick return to normality without a vaccine
2) Unprecedented number of jobs already lost. Will take time for ppl to find jobs again
3) Those still in employment will be cautious on spending
Harsh lockdown: 1-3 months
Light lockdown (no mass events): 3-9 months
Some normality: 9 - 15 months
We're still in first month and have already lost an unprecedented number of jobs.
We will be in the worst economic crisis in over 100 years for the next year at least.
The most important question right now is how we respond to this coming economic tsunami.
Thinking ahead feels like a luxury right now. Full implications have not not sunk in yet
In 1930s it took too long for governments to accept only way out was to create jobs themselves.
We will have to do 21st century version of building roads:
- clean energy
- high speed rail
- new industry
- health&social care
- Taxes on super-rich will have to go up. A lot
- Tax havens will have to be cleaned out. Govts will want their money back.
- Massive transfer of wealth to middle class
the massive jobs creation programme set the stage for a new era of growth and prosperity.
The same is possible now. But we need to ensure spending is on right priorities (clean energy) and growth is sustainable.
The challenge for @Keir_Starmer now will be to get heard, show bold leadership and articulate an alternative vision the country will go for.
It's also almost inevitable he will have to push much of Warren / Sanders agenda on M4A and higher taxes to deal with all this.
We can come out of this in a much better world 💪🏽