Read on Twitter
*deep breath*
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]
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]
Why do I say this?
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.
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.
I should emphasise: I'm thinking out loud here because it seems odd we aren't all talking/freaking about this more.
Secondly, even if the worst bears out, there is hope on the other side. Keep reading!
Secondly, even if the worst bears out, there is hope on the other side. Keep reading!
European countries have largely said to employers: 'hold on to your employees, we will help you through this!'
The U.S. has taken the worst approach possible: 'We will pay you more in unemployment benefits'
Guess what that led to? The scariest chart I've seen in years
The U.S. has taken the worst approach possible: 'We will pay you more in unemployment benefits'
Guess what that led to? The scariest chart I've seen in years
10m Americans have *already* applied for unemployment benefits. That might easily double in coming weeks.
European situation isn't that much better.
- Spain: Jobless claims spike by most on record.
https://www.bloomberg.com/news/articles/2020-04-02/spanish-jobless-claims-rise-by-most-on-record-in-march
France, Italy, Germany will all see huge spikes too
European situation isn't that much better.
- Spain: Jobless claims spike by most on record.
https://www.bloomberg.com/news/articles/2020-04-02/spanish-jobless-claims-rise-by-most-on-record-in-march
France, Italy, Germany will all see huge spikes too
World demand and spending has collapsed simultaneously.
1m Bangladeshi workers have already been laid off
https://www.npr.org/sections/coronavirus-live-updates/2020/04/03/826617334/1-million-bangladeshi-garment-workers-lose-jobs-amid-covid-19-economic-fallout?t=1586011501740
China will see a huge collapse in demand for products as Americans cut back too.
1m Bangladeshi workers have already been laid off
https://www.npr.org/sections/coronavirus-live-updates/2020/04/03/826617334/1-million-bangladeshi-garment-workers-lose-jobs-amid-covid-19-economic-fallout?t=1586011501740
China will see a huge collapse in demand for products as Americans cut back too.
If I am not spending money, someone else is not earning it. So they will cut spending, which affects me in return. And it rapidly becomes a vicious downward spiral.
FIRST PROBLEM:
We can't easily come out of this spiral because we can't open everything as normal in 3-6 months.
FIRST PROBLEM:
We can't easily come out of this spiral because we can't open everything as normal in 3-6 months.
SECOND problem:
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.
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.
So in addition to trying to
- 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.
- 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.
Good Q. I disagree for three reasons:
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 https://twitter.com/lizzy_dowling/status/1246454436454686722
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 https://twitter.com/lizzy_dowling/status/1246454436454686722
I don't think people realise how long this 'lockdown' will go on for. My expectation:
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.
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.
All these 'hot takes' about what happens after the crisis are largely worthless right now.
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.
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.
Most people are firefighting a collapse in their economic and social situations. And they are still in shock over how their lives have changed so drastically.
Thinking ahead feels like a luxury right now. Full implications have not not sunk in yet https://twitter.com/Bickerrecord/status/1246458415075012608?s=20
Thinking ahead feels like a luxury right now. Full implications have not not sunk in yet https://twitter.com/Bickerrecord/status/1246458415075012608?s=20
So where is the light at the end of the tunnel?
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
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
Also inevitable:
- 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
- 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
It's worth remembering the same happened in 1930s:
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 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 UK Conservative party has already junked most priorities to deal with this crisis. They will carry on doing that to stay in power.
The challenge for @Keir_Starmer now will be to get heard, show bold leadership and articulate an alternative vision the country will go for.
The challenge for @Keir_Starmer now will be to get heard, show bold leadership and articulate an alternative vision the country will go for.
In the U.S., I think Joe Biden has a better chance now than before this crisis hit.
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
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
