“The bank is forecasting a 24% decline in economic activity next quarter, compared to their previous forecast for a 5% decline. That’s because U.S. economic data (specifically manufacturing data) have already started to miss economist estimates, even before Americans started to stay home to avoid spreading the coronavirus.”
NYT: “But more than rate cuts or bursts of spending, economists say, the best short-term measures to prevent an economic downturn may be “automatic stabilizers” — existing programs or regulations that protect workers, provide low-cost health care or help companies get through a lean period. Some of these measures were adopted during another time of financial stress: the 2008 financial crisis.
“Assurances that many workers won’t have to choose between caring for their health and paying their rent is a crucial psychological factor as Italy and France shut hundreds of schools, Britain unlocks an “action plan” to prevent the virus’s spread and businesses across the Continent cancel trips and meetings to limit their employees’ exposure to the epidemic.”
More importantly, workers with paid sick time are more likely to stay home when sick and people with guaranteed access to healthcare (that won’t bankrupt them) will seek treatment promptly when sick and get the treatment (and quarantine, if necessay) they need. Our lack of universal coverage and reasonable sick leave policies endangers us all.
Paul Krugman in NYT: “The first thing you need to know about the very rich is that they are, politically, different from you and me. Don’t be fooled by the handful of prominent liberal or liberal-ish billionaires; systematic studies of the politics of the ultrawealthy show that they are very conservative, obsessed with tax cuts, opposed to environmental and financial regulation, eager to cut social programs.
“The second thing you need to know is that the rich often get what they want, even when most of the public want the opposite. For example, a vast majority of voters — including a majority of self-identified Republicans — believe that corporations pay too little in taxes. Yet the signature domestic policy of the Trump administration was a huge corporate tax cut.”
Eric Schlosser in The Atlantic: “What Trump has described as an immigrant “invasion” was actually a corporate recruitment drive for poor, vulnerable, undocumented, often desperate workers.”
“A gold standard regime would be a disaster for any large advanced economy,” said University of Chicago economist Anil Kashyap. Supporting the gold standard “implies macroeconomic illiteracy.”
Macroeconomic literacy? We don’t need no stinking macroeconomic literacy!
Paul Krugman in the New York Times: “So how will this end? Trade wars almost never have clear victors, but they often leave long-lasting scars on the world economy. The light-truck tariffs America imposed in 1964 in an unsuccessful effort to force Europe to buy our frozen chickens are still in place, 55 years later.
“Trump’s trade wars are vastly bigger than the trade wars of the past, but they’ll probably have the same result. No doubt Trump will try to spin some trivial foreign concessions as a great victory, but the actual result will just be to make everyone poorer. At the same time, Trump’s casual trashing of past trade agreements has badly damaged American credibility, and weakened the international rule of law.”