Larry Elliott writes: It is New Year’s Eve 2019 and around the world stock markets are closing for business on a high note. Shares in the US are up by almost 30% on the year, those in Japan by 18%. Even in Britain, where the mood has been dampened by months of Brexit uncertainty, the FTSE 100 has risen by 12%. Overall, it had been the best year for stocks since 2009 and traders saw no real reason why the…
By Simon Mair, University of Surrey Where will we be in six months, a year, ten years from now? I lie awake at night wondering what the future holds for my loved ones. My vulnerable friends and relatives. I wonder what will happen to my job, even though I’m luckier than many: I get good sick pay and can work remotely. I am writing this from the UK, where I still have self-employed friends who are staring down the barrel…
Shutdown in Seattle to slow the spread of coronavirus empties the streets, March 26, 2020. Less economic activity means less revenue for utilities. AP Photo/Ted S. Warren By Peter Fox-Penner, Boston University The renewable energy industry, which until recently was projected to enjoy rapid growth, has run into stiff headwinds as a result of three era-defining events: the COVID-19 pandemic, the resulting global financial contraction and a collapse in oil prices. These are interrelated, mutually reinforcing events. It’s much too…
The Washington Post reports: After 10 weeks confined to their apartments, unable to exercise, shop for groceries or walk their dogs, Wuhan residents are emerging into the daylight. The subway and intercity trains are running again. Shopping malls and even the Tesla store are reopening. State-owned companies and manufacturing businesses are turning on their lights, with others to follow. “I’ve been indoors for 70 days. Today is the first time that I came outside,” one woman who ventured into a…
CNBC reports: Millions of Americans already have lost their jobs due to the coronavirus crisis and the worst of the damage is yet to come, according to a Federal Reserve estimate. Economists at the Fed’s St. Louis district project total employment reductions of 47 million, which would translate to a 32.1% unemployment rate, according to a recent analysis of how bad things could get. The projections are even worse than St. Louis Fed President James Bullard’s much-publicized estimate of 30%….
Farhad Manjoo writes: Why is the United States running out of face masks for medical workers? How does the world’s wealthiest country find itself in such a tragic and avoidable mess? And how long will it take to get enough protective gear, if that’s even possible now? I’ve spent the last few days digging into these questions, because the shortages of protective gear, particularly face masks, has struck me as one of the more disturbing absurdities in America’s response to…
Bloomberg reports: The billionaire Tom Golisano was smoking a Padron cigar on his patio in Florida on Tuesday afternoon. He was worried. “The damages of keeping the economy closed as it is could be worse than losing a few more people,” said Golisano, founder and chairman of the payroll processor Paychex Inc. “I have a very large concern that if businesses keep going along the way they’re going then so many of them will have to fold.” President Donald Trump…
The Washington Post reports: With President Trump saying he wants “the country opened” by Easter to salvage the U.S. economy, a fierce debate is now raging among policymakers over the necessity of shutting down vast swaths of American society to combat the novel coronavirus. Health experts point to overwhelming evidence from around the world that closing businesses and schools and minimizing social contact are crucial to avoid exponentially mounting infections. Ending the shutdown now in America would be disastrous, many…
Derek Thompson interviewed Flemming Larsen, a professor at the Center for Labor Market Research at Denmark’s Aalborg University: Larsen: [T]he government is paying companies for employees who are going home and not working. These workers are being paid a wage to do nothing. The government is saying: Lots of people are suddenly in danger of being fired. But if we have firing rounds, it will be very difficult to adapt later. This way, the company maintains their workforce under the…
Ryan Heath, author of Global Translations at Politico, writes: With whole sectors halted, most economists now agree the West is already in deep recession. Last week’s conversations about medium-term opportunities from the crisis (cheap energy, diversifying from China and remote working efficiencies) have become background noise. That doesn’t mean we are automatically headed for a 1930s-style depression. But the speed of economic collapse is different and terrifying in 2020. It took three years for the economy to shrink by a…
The Observer reports: Such was the scale of the global market crash last week in the wake of the coronavirus outbreak, the spectre of the 1929 Wall Street rout and the ensuing Great Depression of the 1930s has been raised. Comparisons no longer seem fanciful. The failure of the US and the UK to swing into action with a wide range of mitigation measures – despite the lessons of Italy’s slow response to the spread of Covid-19 – has heightened…
Bloomberg reports: Federal Reserve Bank of St. Louis President James Bullard predicted the U.S. unemployment rate may hit 30% in the second quarter because of shutdowns to combat the coronavirus, with an unprecedented 50% drop in gross domestic product. Bullard called for a powerful fiscal response to replace the $2.5 trillion in lost income that quarter to ensure a strong eventual U.S. recovery, adding the Fed would be poised to do more to ensure markets function during a period of…
The Washington Post reports: The U.S. economy is deteriorating more quickly than was expected just days ago as extraordinary measures designed to curb the coronavirus keep 84 million Americans penned in their homes and cause the near-total shutdown of most businesses. In a single 24-hour period, governors of three of the largest states — California, New York and Illinois — ordered residents to stay home except to buy food and medicine, while the governor of Pennsylvania ordered the closure of…
CNBC reports: Investor Bill Ackman urged President Donald Trump and corporate America in an impassioned plea on CNBC to shut down the country for 30 days to contain the fast-spreading coronavirus, calling it the only option to rescue the economy. “What’s scaring the American people and corporate America now is the gradual rollout,” Ackman told Scott Wapner on “Halftime Report” on Wednesday. “We need to shut it down now. … This is the only answer.” “America will end as…
Jamelle Bouie writes: The outbreak threatens entire industries with destruction. Most restaurants, for example, can probably survive a week or two of social distancing. Some can survive a month. But if self-quarantine lasts for months, then hundreds of thousands of businesses, including suppliers and distributors, will fail. Millions of Americans will be out of work. It’s even worse for travel and tourism. The so-called accommodations sector of the economy, which includes hotels and other forms of lodging, accounts for more…
The Washington Post reports: The United States is suffering the most abrupt and widespread cessation of economic activity in its history, hurtling toward a recession that could mean lost jobs, income and wealth for millions of Americans. Across the country, consumer spending — which supports 70 percent of the economy — is grinding to a halt as fears of the escalating coronavirus pandemic keep people from stores, restaurants, movie theaters and workplaces. The rapid national shutdown already has caused layoffs…