$600 Stimulus Checks Increased Savings

 According to "anonymized bank data" the recent $600 weekly unemployment benefit the government handed out was very beneficial to American saving. Moreover, it helped pay workers more than enough to make up for lost wages and enabled spending during unusual times. Not only that, but workers were starting to save more as well. However, when the weekly money stopped the same workers had to blow through the savings in just under four months. The reasoning is that households have to make a choice between stopping everyday purchases or stop paying mortgages and student loans. This is causing a dilemma and a terrible choice for "the macro economy. My question would be do you think that the governments unusual generosity should have been enough or do you believe that the government needs to lend out more money? Furthermore, should the lent money be equal across all jobs or should your usual wage depict the amount of money you should receive?

https://www.nytimes.com/2020/10/16/upshot/stimulus-checks-unemployment.html

India Turns to Economic Overhaul as Growth Prospects Slide Amid Coronavirus

The unfortunate coronavirus pandemic caused India to endure an economic crisis. In fact, out of all of the world’s largest economies, India’s economic decline hit the hardest. Since numerous city jobs vanished amid the coronavirus pandemic, farming jobs are more important than ever. Thus India began to rely on it’s agricultural economy. However, the agricultural economy is under numerous regulations. The government worked to alter these restrictions. Suddenly, farmers were allowed to sell a majority of their produce to consumers instead of wholesale markets (what they were required to do in the past). Many of these wholesale markets have closed as a result. This led to protests from both farmers and wholesale market workers who now struggled even more to make money. In the long run this will benefit farmers by capturing at least some of the profits that have traditionally gone to those buying and reselling their crops, the question is can the farmers withstand this change long enough to receive profits.

https://www.wsj.com/articles/india-turns-to-economic-overhaul-as-growth-prospects-slide-amid-coronavirus-11602586802

The deflated CARES Act leaves more in poverty than before pandemic

 According to the New York Times, since the Coronavirus Aid, Relief, and Economic Security Act, or CARES, has run out of money, more then 8 million Americans have fallen into poverty. Two new studies conducted by Columbia University’s Center on Poverty and Social Policy, the other by researchers at Universities of Chicago and Notre Dame, found that since federal aid has dried up, poverty rates have risen to higher levels than before the pandemic. Moreover, the latter study found that poverty rates have affected black families disproportionally. 

Although it was expected that the CARES act wasn't going to last forever, economic recovery has been too slow to make up for these loses. In May, this aid package help keep up to 18 million Americans out of poverty. But, ever since the package has expired the poverty rate has risen to a higher level than it was before the pandemic. Furthermore, something to take into account is that the number of people suffering from poverty may actually be higher then stated. The two main concerns being raised is that families may have been miscounted or just left out. Those who are being excluded from the data consist of immigrants and low-income minorities. The issue with this is that census data directs over $1.5 trillion in federal funding to state and local governments, and that these funds will go to areas which are over-counted, not under-counted, leaving those struggling most out to dry. 

Do you believe that the data on how many people have fallen into poverty is being skewed to make political parties look better with the upcoming election? Or more because of poor data collection from immigrants and low-income areas?

https://nextcity.org/daily/entry/depleted-cares-act-leaves-more-in-poverty-than-before-pandemic

How the U.S. election could affect Europe’s markets, economy and trade

The article talks about how the upcoming U.S. election matters not only for the American people and the country’s economy but will also have a significant impact across the Atlantic. Europe’s financial markets and economic prospects will be affected by whoever is in the White House after the vote. 

It is possible that the losing side may take it to streets and the matter may have to be resolved by the Supreme Court in the end and this could temporarily hit markets and consumer confidence in United States and beyond. Steen Jakobsen, chief economist at Saxo Bank, said that the markets are underestimating the possibility of a contested election and can disrupt the markets if they don't prepare for it.

“Another issue at stake is trade. If Trump is re-elected there are fears he could start a trade war with Europe, as he has previously threatened to do, claiming last year that Europe has in many ways treated the U.S. worse than China. A trade war would be damaging to both the European and U.S. economies, though the EU stands to lose more if tariffs are imposed on its exports to the States.

A victory for Biden could bring with it another challenge for Europe. According to the article, a “blue wave” Democratic sweep could “potentially pave the way for major tax hikes in the U.S. and excessive labor market regulations that may curtail U.S. trend growth and affect export-oriented Europe.” Biden as president may undo Trump tax cuts, add further tax increases and pursue an expansionary spending and social policy. In contrast, a Biden victory may also mean that the outlook for equity markets outside the U.S. will be positive.

Do you think the U.S. economy will do better under a Trump or Biden administration?

https://www.cnbc.com/2020/10/14/how-the-us-election-could-affect-europes-markets-economy-and-trade.html

One Step Closer to Agreeing on Relief

     As the debate in Congress continues over additional coronavirus relief, both sides just got one step closer to a compromise. Treasury Secretary Steven Mnuchin has told Democrats that the administration is willing to agree to terms on a national testing strategy, just part of the whole relief bill. Although it is still uncertain whether Senate Republicans will come to terms with many of the Democrats demands, this is a small step in the right direction. With jobless claims continuing to rise, Americans across the country are in desperate need of assistance. Small businesses are swamped with expenses, and not enough income to keep them afloat. It will be interesting to see whether Trump and the Republicans really wait until after the election to get relief, or if negotiations will be done before. Additionally, now that the Republicans have conceded on a smaller part of the bill, will the Democrats do the same? Now is not the time to begrudgingly plant oneself on one side of the aisle. Politicians need to come together and do what is needed most in such a desperate time.

 https://www.wsj.com/articles/white-house-agrees-to-national-coronavirus-testing-strategy-11602767703

Surging Euro Presents E.C.B. With a Dilemma

“A rising currency is eroding the competitiveness of European exporters. Central bankers are starting to worry.” The pandemic led to European policymakers increasing government stimulus and monetary policy. They also put up strong travel restrictions and mass gathering restrictions. The measures the policymakers took caused and are continuing to cause unwanted side effects. “The euro has risen 10 percent against the dollar since March, a vote of confidence by investors that also creates big problems for European exporters.” Sales have already been impacted by the virus, but this rise hurts the exporters because now the products are more expensive for customers paying with other currencies. Also, there is a risk of deflation because of the strong euro with imported goods becoming cheaper for European consumers. The Governing council is monitoring the euro exchange rate, but the European Central Bank isn’t too concerned yet. The dilemma that policymakers face is that “any overt action to weaken the currency might be interpreted as a violation of a de facto nonaggression pact among the world’s largest economic powers.” There is an agreement to not manipulate currency rates which could help one economy, but at the same time hurt others.

Ewing, Jack. “Surging Euro Presents E.C.B. With a Dilemma.” The New York Times, The New York Times, 10 Sept. 2020, www.nytimes.com/2020/09/10/business/ecb-euro.html. 

Fed warns that delayed stimulus will have consequences

 Minneapolis Federal Reserve President Neel Kashkari has issued a warning stating that if the next round of stimulus for the United States economy is not approved there will be "enormous consequences". This comes on the brink of the election as President Trump has decided to shut down talks regarding the stimulus until after the election. Not supplying the American economy with stimulus will result in a more intensified downturn as workers, businesses, and governments need more cash immediately. There will be ripples that are felt through the economy once individuals cannot afford to pay their bills. The Federal Reserve has been continuously warning congress of the impact that the lack of stimulus could have. Kashkari stressed that whatever assistance is needed to anyone affected by the pandemic is important and should be delivered. The most interesting point that was stressed by Kashkari is that providing public funds to help the private sector presents no "moral hazard" as the down turn was not caused by systemic failure but by the pandemic. In conclusion, with millions of people affected by the pandemic the incorrect way of dealing with this situation is to let the people deal with it on their own. 

https://www.cnbc.com/2020/10/07/feds-kashkari-warns-delaying-stimulus-will-have-enormous-consequences-.html

Congress Pursue Second Round of $1,200 Stimulus Checks

    In a statement on October 6th President Trump said he plans to pass a “major stimulus bill” if he is re-elected on Nov. 3. because according to him Democrats were “not negotiating in good faith.”A statement which he later reiterated in a Twitter post by saying that he would agree to sign a bill by congress of $1,200 stimulus checks. 

People have had divergent opinions on the passing of these coronavirus relief checks, some suggesting that it did not boost the economy while others argued that it was simply the government's role to provide aid to its citizens as they struggle in the midst of an "economic downturn". As of right now, leaders in congress and house officials are discussing the bill, which will eventually pass in the coming weeks to relief millions of Americans as well as some small businesses. But it is not sure yet given how divided the parties are over this matter. 

What kind of impact do you think Trump's statement could have on the passing of the bill? The article stated: "Academic studies show stimulus payments targeted toward lower-income and unemployed people would be more effective at encouraging spending." Do you then think it is necessary for a second round to checks to be pursued given this expected positive outcome? 

https://www.washingtonpost.com/business/2020/10/09/covid-second-stimulus-checks/

Cinemas Shutdown

With coronavirus cases rising in the country, major movie theater chains are closing their doors. Albeit, temporarily. In part, this is to help curb the spread, but the major reason being, film studios are pushing back their films and postponing it to further dates. If there are movies to show in the theatres, they might as well be closed. 

Cineworld announced it'll be closing it's 663 theatres in both the USA and in the UK as well. Universal has announced the postponing of their new James Bond film "No Time To Die" to next year. The decision by Cineworld to close these theatres is going to see about 45,000 employees in the USA and in the UK affected. 

Another studio which is also postponing a film is Warner Bros. They too are postponing their new, remade film "Dune" to October 1, 2021. This is almost a year away from it's intended release in December 2020. 

John Fithian expressed his concerns saying "If the studios continue postponing all their releases, the movie theaters aren’t going to be there for those postponed releases." He further went on to say in the interview, "They have to consider whether they want the long-term viability of the theater platform to be available to them. And I think they do since about 80 percent of the movies that were scheduled during our closed period have been postponed for future theatrical release and not taken to the home."

Other big films set to release this year like, “Wonder Woman 1984,” from Warner Bros. has already delayed its release from October to Christmas Day. “Soul,” the latest from Disney’s Pixar animation studio, is scheduled for a Nov. 20 release. These movies however may also be postponed to next seeing as they will almost certainly do poorly in the box office as many people will be staying home and avoiding cinemas in a bid to not catch the coronavirus. 

Lobbying efforts to save the movie theater business have been fierce. They called on lawmakers to help the industry with an additional loan and grant programs that could help sustain the theaters until the pandemic subsides. If this aid does not come, they estimate about 69% of the small and midsize movie theatres in the country would file for bankruptcy. “If one of two things doesn’t happen, either Congress gives us substantial support quickly or New York gets open and the movies come back and the patrons come back, most of our companies are going to go under,” Mr. Fithian said.

 https://www.nytimes.com/2020/10/05/business/media/regal-theater-shutdown.html

While Millions Lost Jobs, Some Executives Made Millions in Company Stock

 While Millions Lost Jobs, Some Executives Made Millions in Company Stock

During the pandemic, many companies rewarded their senior executives with stock options, which provides the owner the right to acquire company stock at a later date but at the same price the day it was offered, or a restricted share, which is a stock that executives cannot sell for months or years. This has allowed many superrich and corporate executives to gain exorbitant amounts of profits. However, most Americans own little to no stock which is just "a reminder that income and wealth in the U.S. economy are tilted heavily toward a tiny number of top earners who own significant amounts of stock." According to Brandon Rees, "the stock market is not an indicator of the health of the economy for working people; it’s an indicator of economic inequality," and "these C.E.O. payments reflect that reality."

For decades, corporate boards try to incentivize executive managers with company stock as pay to make them more accountable for shareholders, yet executive managers still end up doing better than what might be justified by a company's business performance. Debra DeShong, an MGM representative, justified MGM Resorts International chief executive, William J. Hornbuckle's, significant gain through restricted stock units by stating "Mr. Hornbuckle . . . volunteered to help the company conserve cash by exchanging all . . . of [his] cash compensation for the remainder of 2020 [worth $700,000] for restricted stock units that vest at the end of the year," and "by doing so, they took on great risk, risk that still exists in that we are not operating under normal circumstances and we are still in a period of recovery." All of Mr. Hornbuckle's 2020 awards have now appreciated to a combined $4 million. Furthermore, Edward W. Stack, the chief executive of Dick’s Sporting Goods, "received 355 percent more stock options for his 2020 award than for his 2019 grant and 142 percent more restricted shares" in March when the stock market was close to its low point. When his 2020 awards were issued, they "were worth about $7 million . . . and are now valued at a combined $67.4 million." In Dick's last fiscal year before the pandemic hit, "[Mr. Stack's] compensation was 1,487 times the pay of the company’s median employee" which raises many concerns from employees and shareholders.

Is it fair to provide company executives many stock rewards, even during a pandemic, when they seem to make an exuberant amount comparatively to majority of other employees and Americans in the long-run? What do you think can be done to prevent such extreme income inequality?