Airlines will struggle long after passengers feel safe to fly again

 The current financial issues the airports are facing are due to the unfortunate global pandemic which ceased or halted travel for a while. It is predicted that this issue will continue on after the pandemic is over. With so many people having lost their jobs, the lack of business travel has especially hurt airlines financially. As well, there will most likely not be much business travel for years due to the fact that many companies have downsized, getting rid of employees. It is expected that business travel will go down by as much as 20% in the next couple of years because of this. This has caused US airlines to lose over $12 billion just in the second quarter. The airline industry has been placed in a crisis that it will take a very long time to recover from.

Historically it always takes a long time for business travel to recover after a recession so when do you think the airlines will recover the airlines ?

https://www.cnn.com/2020/10/27/economy/airlines-pandemic-recession-impact/index.html

Trump, Biden clash over climate, oil industry in final debate

The last presidential debate, which took place on September 22th, 2020, between former Vice President Joe Biden, who represents the democratic party, and the President of United States Donald Trump, representing the Republican party, raised many interesting points. The moderator Kristen Welker addressed many interesting questions towards both individuals, which got some very interesting responses. 

A major topic of discussion was climate change, where President Trump had a standard approach while Joe Biden presented some futuristic solutions. President Trump said he loves the environment, but he is unwilling to sacrifice businesses for the environment. One can agree here that business needs a priority in such a huge and influential economy, but perhaps there is more than what meets the eye. Joe Biden talked about he would slowly move to a climate-friendly economy, which would inevitably create many more jobs and improve the economy. Also, Joe Biden said, “Global warming is an existential threat to humanity, we have a moral obligation to deal with it, and we’re told by all the leading scientists in the world we don’t have much time.” (Bernstein) Joe Biden wanted to show that he as a candidate, understands the problem at hand and considers it his responsibility to improve. Joe Biden plans on making/promoting businesses that lessen the damage caused due to climate change. The President accused Joe Biden that he would get rid of hydraulic fracturing, which is used to extract natural gas from shale. Fracturing has shown many benefits but also has its downsides. Many environmentalists are against fracturing. Overall, President Trump's accusation here did have some basis to it. Joe Biden said he would ban it only on federal land in his defense. 

Yes, some of President Trump’s criticism of the democratic party had a premise, but Joe Biden perhaps gave concrete examples as to what the issue at hand is and how to deal with it. Do you guys think climate change is an important topic of discussion especially in the presidential debate? If yes, then which candidate presented a more apt front/view regarding climate change. 

 

References:

Bernstein, Sharon. “Trump, Biden Clash over Climate, Oil Industry in Final Debate.” Reuters, Thomson Reuters, 23 Oct. 2020, www.reuters.com/article/usa-election-debate- climate-change/trump-biden-clash-over-climate-oil-industry-in-final-debate- idUSKBN2780HW.

France is latest nation to return to lockdown amid COVID surge

Starting this week France will go back into a nationwide lockdown to try to contain the COVID-19. The new measures stated which will come into force on Friday and will last until December 1, that people have to stay in their homes except to buy essential goods, seek medical attention, or use their daily one-hour allocation of exercise. In the beginning, the lockdown was effective at containing the virus, but it started spreading again after relaxing the rules.

France has reported 523 new deaths from coronavirus during the last 24 hours, the highest daily toll when the virus was at its most severe. “France’s death toll is more than 35,000 and is the seventh highest in the world” according to Reuters News Agency data.

Earlier this month, Macron announced a nighttime curfew in Paris and other big cities, but now officials have recognized that this measure had proved not enough to bring down infection rates, and therefore calling for more severe response.

https://www.aljazeera.com/economy/2020/10/28/france-becomes-latest-nation-to-return-to-covid-19-lockdown

DC Delaying Stimulus and Fed Running Out of Ways?

 As we know, representatives within Washington have delayed the fiscal help to citizens further. However, there are bigger problems with this delay other than you and I not getting government aid. The Fed actually seems to be relying on the stimulus to be passed. What is interesting is that economists such as Mark Zandi stated that "(The Fed) just doesn't have much room to maneuver with regard to monetary policy".

While no chairman of the Fed will actually state this outlaid, economists are starting to believe the Fed is running out of "weapons in their arsenal". There are still some left such as adopting yield curve control through bond purchases, right? Well, these bond yields are at historic lows and even Fed officials are skeptical about the impact of yield curve control. 

If the fed were to run out of options to help the economy during this time and COVID continues to go uncontrolled, what would this mean for our economic system? Could we see a potential "fail" like the Great Depression or will we continue to operate efficiently?

https://www.cnbc.com/2020/10/28/the-fed-.html

Californians vote on the future of Uber

     On November 3rd, Californians will vote on a ballot initiative, proposition 22, that will shape the future of ride-hailing firms and gig-economy platforms such as Uber. The issue at hand is whether or not Uber's freelance drivers, couriers and other gig workers should be considered employees. This means that those who are working for the company would be entitled to benefits such as unemployment insurance and sick leave. Proposition 22 is a stab at balancing workers protection with the gig industry's flexible working hours that ensure customers never wait long amounts of time for a ride or a meal. 

    Uber created the template for the gig economy by matching real time demand with real time supply. Initially, riders and drivers both benefited from this as Uber and its competitors such as Lyft subsidized rides in an effort to gain market share. However, in recent times companies like the ones mentioned have begun to cut cost, especially last year after they went public. Moreover, Uber's average"take rate", the % it keeps from ride fare, has gone up 6% from 2017. This means that drivers lose out on potential earnings. 

    How much these drivers earn per hour as been a hot topic. Nonetheless, they currently receive zero benefits from their work. This may not come as a concern to drivers who Uber on the side, however, critics of the company have stated that a majority of those who work for Uber do it full time. The state of California also shared these concerns, and consequently passed a law called AB5 which redefines independent contractors as those who are free from the control and direction of the hirer. Gig firms have argued that they can comply with AB5, but on October 22nd an appeals court ruled that they probably cannot, pending a full trial next year. It is important to note that compliance with AB5 would force these firms to entirely restructure their business models. Uber also stated that it would have to let go of 76% of its drivers, with the rest only working during peak hours. Ride fares for Uber are also estimated to rise anywhere from 25% - 111%. Uber's opponents disagree with their future forecast and have countered with the claim that AB5 would only raise the firm's cost per driver by a third while preserving flexibility and protecting vulnerable workers. 

    This is where proposition 22 enters the picture. It would essentially scrap AB5's narrow definition of independent contractors, while providing workers with some benefits, including net earnings of at least 120% of the hourly minimum wage and health-care stipends. This could pave the way for portable benefits, something that prominent economists, such as Alan Krueger have advocated for. Critics have said that prop 22 is lopsided, while backers have said that if it is not passed, it could be the end of gig-work as we know it.

Do you believe that prop 22 will get passed? If not do you think that the consequences to the gig-economy will be as severe as stated?

https://www.economist.com/business/2020/10/27/californians-vote-on-the-future-of-uber

What would a Biden presidency mean for the US economy?

Economists say that Joe Biden proposes the most expansive tax and spending policies and regulations in modern US history. Prior to the 2016 US election, Donald Trump made a host of grandiose promises about the transformative impact his policies would have on the US economy. Tens of millions of jobs would be created. GDP would grow at rates not seen in decades. However, the record has not exactly lived up to that, which may be blamed on the pandemic or just bad policies.

Biden's manifesto proposes:

• A major increase in infrastructure and clean energy spending, certainly more than is currently planned or proposed by Donald Trump

• More spending on education, healthcare and the social safety net

• A hike in corporate profit taxes, reversing the steep cuts made by Trump in 2017

• An increase in personal income taxes, mainly hitting the well-off

In total, analysts at the credit rating agency Moody’s estimate Biden’s plans add up to $4tn of additional spending in the three years to 2024 and $1.4tn of additional taxes over that same period. But there’s more to economic policy than tax and spending. Biden’s pledge to decarbonise the US economy by 2050 implies more regulation of polluting US industries. His more liberal approach to immigration suggests a reversal of Donald Trump’s restrictive executive orders in this area. His stance on healthcare hints at restrictions on drug pricing and Biden supports a gradual doubling of the federal minimum wage, which hasn’t been lifted since 2009. While Biden has promised a tough line on China, it’s generally expected that he would halt Donald Trump’s protectionist trade wars of the past four years.

Will a Biden presidency affect the economy positively or negatively?

https://www.independent.co.uk/news/world/americas/us-election-2020/biden-economy-jobs-gdp-spending-2020-election-trump-b1256958.html

GDP Report next week will show record breaking growth

 https://www.cnbc.com/2020/10/20/the-gdp-report-next-week-will-likely-show-record-breaking-economic-growth-but-it-may-not-help-trump.html

On Thursday next week the U.S. will announce the GDP growth for the previous quarter and it is expected to show some record breaking growth. Now, obviously, this growth can be misconstrued with the current economic climate. The U.S. is going to experience serious growth because of the down turn that we experienced in the past 8 months. The timing of this news may be good for President Trump as it will come just a few days before election day, but this growth shouldn't necessarily be attributed to Trump's presidency. The growth is really just a product of the recession that the country experienced. 

The reason that this news may not necessarily help Trump in the polls is because the presence of mail-in ballots and early voting. In addition to this the Federal Reserve is forecasting that we are going to have a major drop in GDP this year. It will be interesting to see the if there is any change in the polls after the information is announced. 

With the projected increase in GDP, there is an increase in the economic conditions in the next six months. This is interesting because we are beginning to have a "relapse" when it comes to the COVID-19 pandemic and it seems that the potential for a shutdown or partial shutdown is becoming more and more possible. It seems as if the outlook of the economy is dependent on if there is a vaccine within the next six months. 

'Selfish and reckless.' More than 700 economists strongly oppose Trump's reelection

According to the CNN’s article, there are more than 700 economists, 7 of those include Nobel Prize Winners, who are opposed to Donald Trump’s reelection. This does not come as a surprise as Trump has faced a lot of opposition and suffered from backlash after making economic decisions many times. The argument presented by these economists in a letter, is that Trump’s behavior during his first term is “selfish and reckless” and therefore, Americans should not allow him to perpetuate it for another 4 years.


They highlighted in particular his economic response during the COVID-19 pandemic which they believed “endangered economic recovery” as well as Public Health. More importantly, these economists pointed out the damage caused in the public sector and in the United States relations with foreign trade partners, which they claim are direct results of Trump’s incompetence and economic proposals which did not effectively foster economic growth. We are now less than two weeks away from the November 3rd election, and this released letter might change some people’s opinion or maybe confirm others’ positions.


So what do you think of these economist assessments of Trump’s economic policies and behaviors during his first term? What are your predictions of what would happen to the U.S. economy if president Trump were to get elected for a second term?



https://www.cnn.com/2020/10/22/economy/economists-oppose-trump-election/index.html