The coronavirus crisis is politicized in the US. Death toll will be well over 100,00, vs what President Trump said would be good. Jay Powell, head of the Fed, has done a credible job, thinks Q3, all of this year, economically painful.
Can't push the election back. That requires a change in law passing the House and Senate - no possibility.
Dr. Fauci is a voice of sanity and reason - but re: the economy, doctors and scientists don't have the full range of expertise. I want doctors and scientists leading fighting COVID-19. I don't like politicians second guessing doctors. Bolsonaro in Brazil or Trump in US or Lukashenko in Belarus, or Magufuli in Tanzania.
Considering the economy, ending lockdowns, you don't just need doctors. Expertise from economists, business people who understand what it means to keep economies locked down. We've gone from not knowing what virus we were dealing with, no parameters around testing, how it was transmitted, to now, we need health care and economic expertise - there's a tradeoff between opening the economy and people endangered in health. Keep the economy closed and people are endangered, able to make ends meet, cost to take care of people.
Governance is about tradeoffs. Spending on health care vs unemployment. This crisis is borne by those who can't afford it, essential workers who can't work at a distance. Paid as dispensable workers. Is that going to change? It has to, otherwise sustainable consumption models, representative democracy isn't going to be fit for governance. And, many layoffs in the past two months will be permanent because companies will go bankrupt and others can't afford to keep people employed.
Thinking back to the 2008 financial crisis when markets seemed to be moving up and down together. That's macro. You wanted to understand the financial sector, central banks, leverage, mortgage backed securities. How big the bubble was. You didn't need experts in different sectors of the economy.
Every person that touches an industry, government has expertise that matters to this puzzle, because the entire global economy shut down.
A CEO of a financial institution worries about small business owners not able to pay credit card bills, leases or mortgages, what does that mean in an already low interest environment, where banks have to maintain higher credit levels? How to stay solvent?
Tech firms like Twitter, work-from-home forever. Facebook, Google; how much real estate do you need? People that make spaces function, what happens to those workers?
Food supply: just in time supply chain; problem, it's efficient. How to protect workers? Maybe stagger shifts over time, but do you pay more for working in unusual shifts. Move towards automation, slow down the lines? How to maintain profit? What happens to these workers?
Open office plan doesn't keep people distant, safe from each other. Have to rejigger the way that an accounting firm, consulting firm works. How many people, how to maintain efficiency? Profitability models are tight because it's a competitive environment. Companies go bankrupt in the best of times.
Nothing goes back to the way it was. This doesn't make me existentially pessimistic, like it's the end of society, but changes required are dramatic, structural, a lot of people displaced. Government will have to play a more interventionist, structural role. It's not efficient, don't want spiraling debt. Ability of big industry to answer, when government isn't there, will be a challenge, they'll be under a lot of pressure. Average citizen in these democracies will feel like the system is not working for them.
Does that mean the Chinese system works better? Absolutely not. China will have bigger problems. Zero growth and massive credit bubble, spiraling debt, staggering corporate debt not linked to productive, efficient growth. The Belt and Road and defaults, restructuring already needed in the poorest countries. Economies are going to collapse.
Good news: disruption of this scale gives necessity and capacity to change institutions that weren't working. Do not pretend things will bounce back. We bounced back after 2008-2009. This is a very different scale of magnitude. We'll have very different institutions and global order as we ponder sustainability in society going forward.
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