Tik-Tok Purchase and Trump's Education Reform

 https://www.bloomberg.com/news/articles/2020-09-20/trump-wants-5-billion-from-tiktok-deal-for-new-history-project

News regarding the purchase of Tik-Tok, a Chinese-based social media app, continues to intrigue. Recently, Trump announced that he approved the purchase of this app — from ByteDance Ltd. — by American corporations Oracle and Walmart. According to Trump, part of this agreement entails a contribution of $5 billion by these companies to an education fund aimed at educating American children on “the real history of our country” (Jacobs et al., 2020, para. 1). At a recent speech, Trump expressed disdain about an education platform called the 1619 Project, aimed at beginning the teaching of American history from when the first slaves were brought to America. Trump disavowed the 1619 Project, stating that an ideal education platform would teach children to love our country, history, and flag.

Trump’s desire to restructure the nature of American education calls into question values regarding the government’s role in public education. Ironically, as a Republican running on a laissez-faire platform (of limited government involvement) Trump's desired changes seem to evoke a controlling government, not characteristic of a market economy. As a politician who has vehemently opposed socialism, legislation enforcing a more ‘American’ form of education seems to impede on the public student’s right to, what many would believe is, a more objectively factual portrayal of American history — one that begins with the emergence of American slavery. 

As School Begins, Mothers Working Retail Jobs Feel Extra Burden

With schools open now, mothers and parents feel the burden of working jobs/retail jobs as their children taking part in remote learning require a lot of attention. It is not easy for children to understand how the internet works and how to get into their remote classes, so parents have to choose between that and their job hours, making it a serious dilemma. Looking at some examples, Mrs. Reveles (49) is a single mother and relied on her mother to help and assist with some of her (Ms. Reveles) daughter's needs. Her daughter is nine and needed help as her iPad froze during remote learning, and no one could help her other than her own mother as her grandmother isn't comfortable with technology. Ms. Reveles asked her employer CVS to see if they could lessen her work hours a little so that she could tend to her kid. In response, CVS said that they would work on accommodating her, but nothing was confirmed. 

 

Her and many other parents, especially women, have faced such issues as statistics show that women were three times more likely to leave work due to child-care & pandemic issues. The retail sector is one where hours are not flexible, and thus women working here are torn between parenting and work. The pandemic has affected women's employment massively, and to top, the FED has not offered much child-care relief to parents who work. The FED keeps working towards unemployment benefits, but companies are barely taking any stance towards helping parents who need to help children with online school. Some companies like Amazon have offered subsidized child care, which isn't that helpful as women especially have left their positions. Women working in other companies are also contemplating to leave their jobs. The major problem here is that some of these women are the sole financial support of their households, and thus it is hard for them to make ends meet and keep their children's education up to the mark. Overall, this is just one of the many problems this pandemic has brought forth, and we don't know what the future holds for us as COVID cases are still on the rise worldwide.

TIKTOK TUSSLE shows the uneven ECONOMIC DECOUPLING increase between the U.S. & CHINA (BLOG 2)

 Just last month the craze over TikTok increased. But this is what President Trump thas taken this is a national security threat and Chinese companies ownership. On Saturday the President talked about a deal with Walmart and Oracle which included partnering up with TikTok in a new U.S. controlled company. The commerce team abruptly then announced on Friday that they would ban both Tiktok as well as WeChat another Chinese Application. But the Federal Judge later issued a temporary injunction which blocked the WeChat ban meaning that both of the Apps are still working in the U.S.

Chinas Foreign Ministry groused that is was a showcase of Washington's hideous agenda of robbery and economic bullying. The U.S. and China have not been on good terms either. the Chinese government put out a new global data in order to be able to outflank their rival's (U.S) Initiative. The Chinese Ambassador quit the his post in Beijing who preferred to help Trump in his reelection bid. 

Two of the largest economies in the world are fighting against each other and are drifting apart in ever situation be in technological or Industrial. Do you think it may lead to a nuclear war in the future if things get worse between the two countries.

https://www.washingtonpost.com/us-policy/2020/09/20/trump-china-tiktok-economic-decoupling/

Coronavirus recession ends for the rich but is far from over for lower-income communities

 The recession caused by the coronavirus is causing way more damage to lower income individuals. Upper class individuals were not affected as bad as lower income people. They were less likely to become unemployed and they were more likely to receive stimulus checks throughout the pandemic. Because of this many economists believe that the havoc that COVID has unleashed on Americans is primarily over for many groups of people, the wealthy white, and higher-educated people were the least likely to lose their jobs. Assets like stocks and real estate have also boomed which has increased the wealth of many high income individuals. Sectors like hospitality and leisure that took the most damage due to the coronavirus tend to hire women and people of color and tend to pay lower wages, but due to COVID and the restrictions that were imposed many women and people of color were laid off. Latino unemployment also ballooned to almost 19% but the unemployment rate for whites was only 14%.

Even With A Vaccine, The Economy Could Take Many Months To Return To Normal

    Once a vaccine is discovered we won’t necessarily be able to get back to normal right away. Economists are connecting the speed of recovery to the varying levels of immunity. “Even if the vast majority of the population become immune to the coronavirus tomorrow, leading economists think it could take six months or more before our economy is back to where it was before the pandemic hit. And if a smaller share of the population became immune, economists think returning to economic normalcy would likely take more than a year.” Some economists are being more optimistic than others. The optimistic ones are looking for consumers to take part in more spending. Consumers will be looking to take postponed vacations and go to more restaurants which would lead to a quick recovery in hospitality and tourism. The large pent up demand will be the changing factor. On the other hand, some think that consumers aren’t necessarily going on a spending spree and business investment is generally muted following a recession. They believe it is going to take time for the unemployed to find jobs because businesses will be focusing on recovering and then will work on scaling their way back up to where they were before. Even though there are contradicting viewpoints with future outcomes, the news is becoming more optimistic with overall GDP growth which is good news. 

Thomson-DeVeaux, Amelia, and Neil Paine. “Even With A Vaccine, The Economy Could Take Many Months To Return To Normal.” FiveThirtyEight, FiveThirtyEight, 25 Aug. 2020, fivethirtyeight.com/features/even-with-a-vaccine-the-economy-could-take-many-months-to-return-to-normal/.

The US economy needs more help. Congress is too divided to provide it

According to Goldman Sachs, small businesses are disappearing, unemployment claims remain high, state and local budgets are imploding. Still, Congress is likely to skip town this month without providing additional emergency aid to the economy. "At this point, a major stimulus package before the election looks like a long shot," Goldman Sachs.

For example, another 860,000 Americans filed for first-time unemployment benefits last week, retail sales growth slowed in August, more than half of the business that closed during the pandemic will never reopen, bankruptcy filings are increasing, including Brooks Brothers and California Pizza.

Valliere writes that: "Without a stimulus package, more small businesses will close, state and local governments will lay off thousands of workers, and evictions will increase."

The question comes to mind why isn't Congress doing something?

https://www.cnn.com/2020/09/18/business/stimulus-goldman-sachs-economy-gdp/index.html

Pandemic caused recession is largely over for the rich

 The recession created by the pandemic is largely over for Americans who are affluent. According to the article, the recession is largely over some groups like white and college educated Americans. The unemployment rate for minorities sky rocketed but has remained high where as the unemployment rate for whites has returned to lower rate. For the demographic that does not have a higher education degree the unemployment rate peaked at 21%. This is roughly three times more than what the unemployment rate for college educated Americans. To even further back the claim that the recession is over for these demographics, the top thirds of earners had there jobs fully recovered. Within the article they point out that Americans who did not lose their jobs are blind to the financial struggles that are plaguing the country currently. Overall a huge driving factor is that these groups were less likely to lose their jobs and their jobs rebounded quickly. These groups were also able save their stimulus money and financial assets such as stocks and real estate have improved heavily. 

https://www.cnbc.com/2020/09/20/coronavirus-recession-ends-for-rich-crisis-persists-for-others.html

Disputes in Congress slow down the US economic recovery process.

With less than two months until the election, the odds for another stimulus package indented to help small businesses and increase unemployment benefits are near to zero. After the last week's vote, it's highly unlikely that the Republican-backed stimulus plan would come into effect before the election. Negotiations between both parties ended in a deadlock as neither of them could agree on the size and makeup of another round of stimulus. However, on the other hand, the economy is still suffering. More small businesses are shutting down, first time unemployment’s claims remain relatively high and states and local budgets are collapsing.

Greg Valliere described the situation as … “The economy seems to be running out of steam in the last few weeks”. He backed his analysis by relating to the statement issued by The Fed Chairman that more stimulus is urgently needed from the Congress. For instance, retail sales growth declined in August, 860,000 more American filed for first-time unemployment claims last week. Yelp reported that more than the majority of restaurants that closed during the pandemic might never re-open. Since July large businesses filing for bankruptcies spiked 244%. Valliere fears that if the government fails to put out another stimulus package, more small businesses will close, unemployment would increase locally and increasing evictions as well. Similarly, The Fed Chairman has also insisted that another stimulus is necessary. He thinks that the initial response from the fiscal authorities was very effective and efficient and expects the government to do the same to keep up with the recovery speed. The chairman emphasized the fact that about 11 million jobs lost due to the pandemic are of those industries that suffered the most from the global crisis and without government aid it will be difficult for them to survive.

The question that comes into mind is why is Congress overlooking this problem and delaying it? Is it because Democrats are confident that the blue wave is coming, and they would rather wait until next year and give out a larger stimulus package?                    

https://www.cnn.com/2020/09/18/business/stimulus-goldman-sachs-economy-gdp/index.html

Low Rates to Continue

 The Federal Reserve met last week to discuss their policy moving forward. The two big notes from this meeting are that the Fed plans for keep interest rates low (between 0-0.25%) likely until 2023. The purpose of keeping rates low is to attempt to help raise inflation. The Fed announced about a month ago that they want to increase inflation and would be okay to see rates near 4%. By keeping rates low, the Fed is encouraging consumers to spend money as it is "cheap" to obtain through low rates. They are hoping to increase cash in circulation, increase consumer spending, and increase inflation. Another big thing to note is the lowered their forecasted unemployment to 7.6% instead of 9.3%. This shows belief the economy will return to pre-COVID levels at a quicker than originally expected pace.

https://www.cnbc.com/2020/09/16/fed-meeting-decision-interest-rates.html

Justice Ruth Bader Ginsburg

 On September 18th, 2020 Justice Ruth Bader Ginsburg died. She was appointed to the Supreme Court of Justice in 1993 by Bill Clinton. During her time as a Justice, she became a legal, cultural, and feminist icon. Ginsburg started the legal fight for women’s rights, writing the majority opinion in a 1996 case that opened doors for women's education. In United States v. Virginia, a 7-1 ruling determined that the Virginia Military Institute's (VMI) male-only admissions policy violated the Equal Protection Clause of the Fourteenth Amendment. 

Now that Ruth Bader Ginsburg has died it leaves a vacancy in the Supreme Court and has caused major political turmoil. Ginsburg’s death gives Republican’s a chance to have a 6-3 majority as Trump has the right of appointment. However, this has also brought up the question of if an appointment right now will be too close to the election. In 2016, Senate Majority Leader Mitch McConnel refused for nearly a year to allow any consideration of President Barack Obama’s Supreme Court nominee, so will he do the same now that we are a little over a month away from election day? No, quite the opposite, McConnel will try immediately to push through a Trump nominee so as to ensure a conservative justice to take over Ginsburg’s liberal position, even if Trump were to lose his reelection bid. Asked what he would do in circumstances such as these, McConnel said “Oh, we’d fill it.” In class we talk about government involvement and the amount of power each individual has, but should government officials be able to do one thing for one president, as not allowing Obama’s nominee to go through and then a different thing for another president? So should President Trump make the nomination before the election day? Or should it be put off until after the election?

https://www.npr.org/2020/09/18/100306972/justice-ruth-bader-ginsburg-champion-of-gender-equality-dies-at-87?utm_source=dlvr.it&utm_medium=twitter

Recovery will Differ from State to State

 As more people go back to work, and the economy slowly tries to heal, many states have been hit harder than others. For instance, unemployment numbers in the Northeast and West have been much higher than their counterparts in the South and Midwest. This is likely the case for a number of reasons. One being that many states in the South and Midwest opened up earlier and to a greater extent than states in the Northeast or West. Additionally, overall public sentiment in those areas toward the virus was much less than areas such as New York or California. Another issue in the Northeast and West comes with population density. Many large cities and tightly packed states make up the regions, and with the virus there has been a push to leave the areas. For example, thousands of people have moved from New York City in an effort to get away from the dangers of the virus and because they simply can no longer afford it. As people disperse, demand has dropped significantly.

 States that rely heavily on tourism have also been hit much harder than states that do not. Hawaii and Rhode Island businesses make the majority of their money from flocks of tourists coming to their beaches each year. With coronavirus, the numbers have been reduced dramatically, and the scale of operation has been cut back. Many businesses simply cannot afford to keep as many people employed, leading to higher unemployment levels in these areas. As we move closer to a new year, many state economies may shift their means of production in order to survive. Population hubs such as cities may see hits to their workforce as people look to find less crowded places to live. Many states will be hit harder than others due to a plethora of reasons, though only time will tell which ones are able to recover.

https://www.wsj.com/articles/jobless-rates-in-northeast-west-are-highest-in-nation-11600447829

Psychological scars from covid-19 could depress economic growth for decades to come

 The notion that a pandemic such as the one we are currently living in might cause long-run economic damage is not a new one. However, there is much speculation as to what will be impacted most after the dust settles from COVID-19. Since the depression, macroeconomist have understood that severe economic downturns might tip the economy into a "liquidity trap", in which interest fall to zero and monetary policy struggles to stimulate the market. Furthermore, there are also concerns that without any fiscal stimulus, the economy may be stuck in a slump. There is also a chance that all the uncertainty at the moment may lead to "hysteresis" in the job market and have a long term negative effect on the unemployment rate. Even when the demand recovers in the labour market, people will have been out of work for so long that their skills and motivation begin to fade away and jobs will become harder to find. 

Problems such as these could scar the economy as the pandemic leaves us. Yet, there is something that seems to be concerning economist just as much.  Research suggest that traumatic economic episodes can exert a drag on growth simply by altering people's beliefs about the future. For example, Ulrike Malmendier of the University of California, Berkeley, and Leslie Sheng Shen of the Federal Reserve have studied consumption patterns in the aftermath of downturns. They concluded that periods of economic hardship and spells of unemployment tend to depress people's consumption for some time, even after controlling income and all other variables. Not only that, but consumers also tend to purchase lower-quality or discounted items. Moreover, young people are especially effected, which can potentially prolong the economic struggles. 

Lastly, in one recent study of 19 pandemics going back to the 14th century, concluded that outbreaks like this depress real rates of return for decades. The study found that rates decline, on average, for about 20 years, and do not return to the previous level for 40 years. This effect could be reflective of the human toll exacted by past pandemics, which shrank the workforce and reduced the return on new capital investment. But they study also reckoned that an increase in savings by wary households could have a depressing effect. 

U.S. economic rebound may be a slow train for unemployed

 https://www.reuters.com/article/usa-economy-reopen/us-economic-rebound-may-be-a-slow-train-for-the-unemployed-idUSL1N2GD2MO

The Federal Reserve has recently updated their estimates for what they think the economic recovery will look like for the United States. The news is positive and shows that the U.S. output will not be low as we initially thought. The problem with this is that some of the main job creators in the economy are going to face the biggest struggles. 

Small businesses do not have the resources of big corporate offices and are unable to withstand the same economic environment that bigger businesses can. This means that many of these businesses may end up going under in the next few months. And for the ones that don't, they will struggle to get their business back to where it once was. Small businesses make up a good portion of the job market and with their slow recovery, there will also be a slow recovery on the unemployment rate. 

The U.S. is also going to face unemployment pressures because certain industries are becoming obsolete and there is going to be a lack of jobs based on that. With more people working from home than ever, offices are not always necessary for businesses and this can force certain employees to no longer be necessary, such as janitors or security. 

It seems as if the economic struggles of the U.S. are going to impact the middle to lower class more than the upper class citizens.

China's economy shrugs off global slump as shoppers join the recovery

China's sales have increased for the first time in 2020. Even if the gain is only .5 percent over last year, it still means that China's economy is on track for recovery. This is not the only thing that is showing stabilization. In fact, China's job market is showing signs of stabilization according to the bureau of statistics. It appears that since China has been in recovery the longest, they are now a sign of hope for other modern countries. With shown recovery in areas they thought were going to be lost for a while such as movie ticket sales and car sales both growing (with car sales growing by 12 percent). Now even though  the economy appears to be stabilizing, the unemployment is still higher than it has ever been. This year China is expected to have its biggest amount of college graduates enter the workforce and a lot of these college graduates will be unemployed due to the economy still reeling from the covid pandemic. In short, while China may be a great beacon of hope for economics on their way to recovery, it still shows that even though they are recovering they still have a lot of problems to solve and it looks like they will not find the answer anytime soon.

https://www.cnn.com/2020/09/15/economy/china-economy-retail-intl-hnk/index.html

U.S Consumer Spending Decreases in August

 Over the course of last month, consumers within the United States held back on their spending. Some experts have connected this lack of spending to the government cut extended unemployment benefits for millions of consumers. Interestingly, core retail sales fell 0.1% this past month as opposed to a 0.9% increase in July. This is significant because these sales correspond closely with "consumer spending component of gross domestic product." Moreover, even though overall retail sales increased by 0.6%, this was due to higher gasoline prices supported receipts at gas stations. 

My thought is do you think this is a result of an economic insecurity as people could possibly become increasingly concerned about their job security/income as this pandemic drags on? Or could this just be a outlier month and September will align more with July?

https://www.cnbc.com/2020/09/16/us-retail-sales-august-2020.html

WTO finds Washington broke trade rules by imposing tariffs on China

 https://www.reuters.com/article/us-usa-trade-china-wto/wto-finds-washington-broke-trade-rules-by-imposing-tariffs-on-china-idUSKBN2662FG

    The punitive tariffs imposed on China by the Trump administration in 2018 violated international trade rules according to the World Trade Organization ruling this Tuesday. Washington immediately reacted by deeming the WTO "inadequate" to settle this issue. The members of the panel considered that the measures used by President Donald Trump, who denounced in particular a forced technology transfer to access the Chinese market, violates several rules of the institution. The additional taxes of 25% and 10% on the importation of certain Chinese goods exceed the maximum tariffs accepted by the United States on these products within the framework of the WTO. Also, the members of the panel believe that the arguments given by the United States to justify this 'protectionist' approach do not allow an exception to its multilateral trade agreements. Last year however, Washington and Beijing reached a first agreement to calm the situation. This new ruling has now obviously angered the administration and created a lot of tension which leads me to question whether Trump will see this as an opportunity to quit the organization given that he is already very critical of multilateral institutions.

Corona Virus Job Losses are Becoming Permanent

 https://www.foxbusiness.com/economy/more-coronavirus-job-losses-are-becoming-permanent

During the beginning of the pandemic, many employers that initially laid off employees expected to be back to full employment by the end of 2020. However, this is appearing to be more unrealistic by the day, and 67% of employers are not looking to rehire by the end of the year. While there has been positive decline in unemployment levels, there are still 11.5 millions Americans out of work compared to February. Also, that number of jobs added should be taken with a grain of salt. Many of those jobs added were seasonal, temp jobs which were created by hiring people to conduct the 2020 census survey. Once these jobs are no longer in the picture, I think there be regression in job growth once again. 

The rest of 2020 is going to be an economic roller coaster, especially leading up to the election in November. If Trump lets the economy play out, I don't think it's going to be a pretty picture. As Goldman Sachs predicts that if there are no other relief packages passed by congress, only 16% of business owners are confident that they can maintain their current payroll, which is already way less than in February. 

  https://blogs.worldbank.org/health/covid-19-coronavirus-panic-buying-and-its-impact-global-health-supply-chains

A recent article published by Emilie Besson highlights various market failures brought by the pandemic and emphasizes questions about the government’s role in addressing these problems. Although “panic buying” — the purchase and hoarding of goods in anticipation of future shortages — was a larger phenomenon in the earlier stages of the pandemic, this trend still exists. In order to ensure lower income citizens have access to food and health items that are subject to panic buying, some stores are rationing these items and adjusting store hours so needier individuals can afford and access these goods. This policy highlights debates over the government’s role in countering a classic problem with markets: income inequality. While it is not the government who has instituted these policies, it is possible that the government will step in to mandate such policies on a federal level. Although rationing these goods for poorer individuals appears noble, many may complain that it would be more efficient for the market to solve this issue on its own, without the help of the government.

Another potential market failure caused by the pandemic is the asymmetry of information (information failures) brought by false medical products. In recent months, there have been a surge in counterfeit face masks and surgical gloves. While it may not be easy for the government to address this problem, the government’s role in helping correct this market failure would likely be less controversial than policies regarding income distribution. The government needs to find a way to require every company — even online providers — to demonstrate the validity of their products. This is undoubtedly a situation where the consumer cannot afford the expense of an information failure. 

US Debt on the path to Exceed World War II

The hits keep on coming. After millions of job losses and loss of income and huge death tolls, the pandemic recession has put the United States in a position it has not seen since World War II. The size of the United States debt has grown almost as large as the USA economy and is set to be more than the economy within the next year. Federal debt, as a share of the economy, is now on track to smash America’s World War II-era record by 2023.

This level of debt was only forecasted to happen at the end of the decade. However, COVID-19 and it's associated effects have brought it much closer than economists would have imagined. 

“We should think and worry about the deficit an awful lot, and we should proceed to make it larger,” said Maya MacGuineas, the president of the Committee for a Responsible Federal Budget in Washington, which has for years pushed lawmakers to take steps to reduce deficits and debt.

Tax cuts in 2017 totaling over $1.5 trillion were expected to pay for themselves but have only added to the debt stock. 

The Coronavirus pandemic has forced the economy to contract to levels not seen in 75 years. 

Now with people out of jobs and businesses failing, the president has been forced to approve more than $3 trillion in new federal spending to help businesses and individuals stay afloat.

https://www.nytimes.com/2020/09/02/business/us-federal-debt.html

U.S. Economic "Recovery"

 As many know, COVID-19 has negatively impacted many countries across the globe. In the U.S., these effects include a myriad of deaths, the complete halt of large social gatherings, and an economic recession. Some economists may argue that "we are recovering" or "beating this virus". And they may not be completely wrong given hiring increased again in August, consumer spending has been steady, manufacturers are still on an upswing and demand for homes and new cars has been surprisingly strong. Yet I have to wonder if all Americans are feeling this recovery equally. 

    The Bureau of Labor Statistics reported "The unemployment rate among banks, insurers, Wall Street brokerages and other companies involved in the handling of money was just 4.2% in August". In contrast, "the unemployment rate for companies involved in travel, hotels, dining out and other forms of leisure and hospitality stood at a stunning 21.3% last month." This is just one comparison but I fear it may be indicative of a larger problem. There seems to be a trend during recessionary periods; the government prioritizes large business while leaving its citizens to almost fend for themselves. 

    In my opinion, a one-time check of $1200 dollars is not satisfactory during a pandemic. And the recovery we have made has not been seen equally by all. This is a problem that arises with solely focusing on metrics to determine the state of our economy. It does not always account for the small nuisances and potentially lurking variables that could weigh on these numbers. Unfortunately, this discrepancy will persist until the concept of aide is seen as a bipartisan issue rather than a tool for re-election or for defeating the incumbent chair. 

https://www.marketwatch.com/story/the-numbers-tell-us-the-economy-is-better-but-millions-of-americans-arent-feeling-it-2020-09-12

Former Fed Chair Alan Greenspan says inflation is 'major concern' as deficits get 'out of hand'

The former Federal Reserve Bank Chair Alan Greenspan told CNBC on Thursday that inflation, the unknown factors surrounding coronavirus, and budget deficits are the critical issues the US is facing right now. The former chairman said that the US is underestimating the size of the budget deficits that are down the road, as the number of Americans retiring and receiving entitlements increases. Greenspan said he is certain there will be an "extraordinary increase in retirement" ahead. 
Budget deficit of United States has increased as the government has spent to help the economy through the pandemic. According to the article, the federal budget deficit reached $3 trillion in August. 
Greenspan said, "My overall view is that the inflation outlook is unfortunately negative and essentially the result of a huge increase in entitlements that are crowding out private investment and productivity growth."
We can see that Greenspan's arguments coincide with the policy of the current Chair of Federal Reserve Bank Jerome Powell. Powell announced last month a major shift in Fed policy saying that the Fed is willing to allow inflation to run hotter than normal in order to support the labor market and broader economy. The central bank formally agreed to a policy of “average inflation targeting" which means it will allow inflation to run “moderately” above the Fed’s 2% goal.

https://markets.businessinsider.com/news/stocks/economic-outlook-inflation-major-concern-alan-greenspan-deficits-fed-entitlements-2020-9-1029579654#

Owensboro, KY Economy is Booming While Rest of Country Reels During Pandemic

     Owensboro, KY, just like the rest of the US, experienced a hard drop in employment once COVID hit. In fact, its unemployment rate was higher than the national average in April: 14.9%. With luck, hard work, and community spirit, Owensboro was able to turn that around within two months and brought the percentage down to 4.2% (then 5.4% in July), well below the national average and lower than its unemployment earlier in the year.

    What is the secret to their success? There happens to be big employers in Owensboro such as Kimberly Clark Toilet Paper, Ragu spaghetti sauce, and Fireball Cinnamon Whisky. Since the spirits business was designated as essential during the pandemic, the Fireball distillery was able to remain open and keep their employees. Even though bar consumption went down, home consumption went up, and they also turned some alcohol into sanitizer. They are actually hiring as well.

    Unfortunately and ironically, the Owensboro hospital network took a big hit financially once the pandemic hit due to halting elective surgeries, losing two-thirds of their income. The Owensboro health president decided to not let any employees go since they were in a rural area, and it would be hard to re-recruit because they may not come back. That worked out well for them once they re-opened because they nearly made up much of the revenue lost soon after.

    Previously mentioned in another student's article, the mortgage business has been booming during this pandemic as well due to low interest rates. This has bode well for Owensboro because it is also home to a mortgage processing arm of US Bank (one of the largest in the country). Three-quarters of US Bank's employees in Owensboro are still working from home.

    Despite challenges like parents trying to work full-time while helping their child through school, Owensboro has been the closest to a "V-shaped" recovery than any other city in the country. I think this goes to show that economic recovery in the US during this pandemic is very much possible, but some places, without as much luck as Owensboro, may need a lot more time, energy, and resources.

Kentucky City Enjoys Booming Economy Amid Pandemic As Rest Of Country Reels

Job Report August: Payroll increases as unemployment falls

 One of the biggest downfalls that has occurred during the pandemic is the lack of jobs. When the pandemic occurred the was a spike in the unemployment rate as many people either were furloughed or simply were out of work. With that aid the economy has taking a massive hit too because of the pandemic, within this article from CNBC there is information that points towards a positive outlook regarding the unemployment rate and ultimately in some sense the economy as a whole. 

In August the unemployment rate dropped to 8.4%, although still way above the comfortable margin this is a good indication that the country is slowly climbing out of the downturn created by the pandemic. The biggest take away from the article though is that government hiring aided in the decrease of the unemployment rate. This was followed by adding gains in the retail, education, and health services sector. Overall aside from the government leading the way with hiring, nonfarm payrolls increased from 1.32 million to 1.37 million this month. Nonfarm workers are all workers aside from government workers, private household workers, proprietors, non profit employees, and farm workers. Within this category there was a payroll increase which is indicative of the economy fighting its way out of this downturn caused by the pandemic. Overall the month of August can be viewed in a very positive light as these statistics or indicators show that the economy is on the road to recovery. 

https://www.cnbc.com/2020/09/04/jobs-report-august-2020-.html

Policy Implication, Supply Chains and Bottlenecks of Global PPE Shortage

 In class, we have recently been discuss the benefits of market economies: one of which being our market stability and a market's ability to self-correct when necessary. In this brief, Park et al. seek to explore some of the ways in which the PPE market responded to the overwhelming, global shortage that came as a result of the sudden and immediate necessity for PPE. 

One of the main arguments of this brief suggests that "Since the COVID-19 outbreak, the supply chain for personal protective equipment (PPE) has not adequately functioned to meet the surge in demand" (Park et al 2020). While I can certainly agree that this would have been the case at the time this brief was published, in April of 2020, it is my opinion that the market has since had sufficient time to begin correcting this shortage and has effectively risen to the challenge. In my experience working for a company that has their hand in the PPE supply chain, I have seen that, although personal protective equipment is still not as readily available as this pandemic necessitates, for every PPE request that exists, there is a competitor that is willing and able to offer these products (even at prices lower than they would those pre-pandemic). 

Interestingly, this brief also discusses policy implementations of the Asia Development Bank, done to aid  the procurement of PPE for Asian companies. Within these policies is included a Supply Chain Finance Program that offered $200 million to aid in the manufacturing of PPE. Reading this article, I was hoping to see data or information on China's policy implementations, being that their economic institutions lean more toward communist/socialist ideologies and it would have been interesting to be able to compare.

With 1.4 million jobs added in August, unemployment rates fell below 10%.

     In August, 1.4 million jobs were added to the economy, which led to unemployment rates to fall below 10%. This is perhaps a small sign of a better future, especially when the pandemic is still rampant across the U.S. With unemployment at 8.4%, signs of a slow recovery within the U.S economy are showing. Yet, half of the 22 million lobs lost between the February-April period have not been returned, and economists warn that in the coming month's financial conditions are going to take another downturn, saying that the worst is yet to come. Government jobs like those of temporary census workers have found recovery as 1/6 jobs have returned as of August, but this doesn't mean that other sectors have benefitted the same way. Departments like retail, hospitality, and education have improved their condition a little, but their losses are still apparent. The Republicans seem to be satisfied with the way they have helped this economic "turn-around' considering the jobs that have been created. At the same time, the opposition claims that the pandemic required better leadership, and no good has come from the way President Trump and co. Handled everything. Many companies have already burned through the aid they were given without signs of recovery. Also, some of the added money to unemployment benefits even expired at the end of July.

    On the other hand, national factory activity is at an all-time high compared to 2019, home sales have been doing well, and the stock market has also seen some good times recently. The unemployed and underemployed who are eligible for aid are still at high numbers (29 million people). People are now staying more time unemployed than they really were in April, so that is also a terrible sign for the economy. People have lost their once stable jobs with benefits also expiring. According to economists, recovery will begin when Congress resumes sessions and works on these problems. A big fear of economists is also that these positive job numbers mentioned earlier might influence lawmakers into thinking their work is done, which is far from the truth. Not to forget that unemployment has a starkly disproportionate effect on women, and also minorities in terms of race. There is also an indication of incorrect measurements of jobs reported, according to the Bureau of Labor Statistics, which will also definitely cause a lot of problems, especially when there is no room for such errors in this pandemic.

 https://www.washingtonpost.com/business/2020/09/04/economy-adds-14-million-jobs-august-unemployment-rate-fell-below-10-percent-first-time-since-pandemic-took-hold/

A VACCINE WONT CURE THE GLOBAL ECONOMY

It has been in the news recently that there is a vaccine that will be realized later this year for Coronavirus. Some are saying that it will reach the United States by October, but some are saying that the Vaccination will arrive by the middle of next year. Distribution could be a really big problem not only to different countries, but within countries as well. 

An economist Neil Shearing talked about how the economy will have many potential outcome once the vaccine get distributed. He said that only about 1 billion vaccinations will be sent out across the world and the rest next year in 2021. there will be many important things which would need to be looked into like their will be special syringes which will be needed for the vaccine. But there are many people in different countries that are not wanting the vaccination if it will reach by next year. Only about 60% of people in France are going to get a vaccination if it reaches next year,  and in other part of Europe and America only 70% of people are planning to take the vaccine when it is released. Biotech and pharma stocks like Moderna have reached great height because they promised the vaccine for the Cornavirus. They have reached many differned traders and even on the robinhood platform. 

I think that this is going to be a blood battle just for the vaccine in a couple of few months. even though some people say that it might be distributed globally this year I feel like it is very unlikely for that to happen. when the vaccines come out it is from that time when we see who are really the important people who need the vaccine and who will have to wait till next year. 

If you were told you wait till next year for the vaccine, would you get the vaccine next year, or would you be okay without a vaccine?   

https://www.cnn.com/2020/09/06/investing/stocks-week-ahead/index.html

WEEKLY JOBLESS CLAIMS DECREASE AS LABOR MARKET CONTINUES TO HEAL

 Last week’s unemployment claims added up to 881,00 about 100,000 less from what was predicted by the analysts, mainly due to the seasonal adjustment process by the labor department. The labor department reported the lowest unemployment rates since the start of the pandemic. The article talks about how government, retail, health, and education sectors have increased hiring that enables the labor market to gradually recover from the pandemic crisis. The statistic shows that the number of people on temporary layoff decreased from 18.1 million in April to 6.2 million in August, which indicates that people are going back to work.

Although the figures are way better compared to the situation we had 5 months ago, but still we are far away from the normal, at this pace it will take a while to recover all the jobs lost due to the pandemic.  

     

https://www.cnbc.com/2020/09/03/weekly-jobless-claims.html

https://www.cnbc.com/2020/09/04/jobs-report-august-2020-.html   

COVID-19 Effect in Low Income Countries

 In the US we saw a steep decline in the economy in March and April, however had the fastest recovery from a bear market in history. This has not been the case for low income countries who are in some cases either still in or re-entering lockdown due to the virus are in a very different situation. These countries, such as Peru, Mexico, and India, rely heavily on manufacturing to carry their GDP. With a large portion of the workforce in quarantine, they are unable to produce at a level they are capable of. In Brazil, they government removed the cap on public spending, which increased capital outflows and increased interest rates. Globally interest rates are at historic lows leaving room quantitative easing programs to repurchase bonds. This has pushed a bond issuance from low income countries, allowing for money to re-enter markets. For Low income countries to avoid serious recessions they will need for programs similar to this to continue pushing their economy, as well as make a tough decision between avoiding lockdown to increase GDP or continue a lockdown and risk COVID mortalities.

https://www.ft.com/content/62358c60-f3f4-4961-a33f-76ab4ef91350?ocid=uxbndlbing

Coronavirus and Universities

 In class we have talked about formal and informal rules. Formal rules are laws, regulations, and directives while informal rules are practices, customs, and beliefs. This has led me to my topic. Do students not take the formal laws being implemented on their campus for masks and social distancing, no partying or large gatherings as formal? Do they believe these are suggestions and not regulations?

On Friday, September 4th, eleven students were notified that they were dismissed from Northeastern University and that they had 24 hours to vacate the hotel they were living in. Northeastern also declined to refund their $36,500 tuition. Purdue University has also suspended 36 students after they were caught at a house party 24 hours after their president outlawed off-campus parties. Finally, several students were suspended at the University of Connecticut for throwing a mask-free party. 

Colleges across the country are struggling to figure out how to stop campus partying, which has already set off outbreaks at a number of schools and shut down some classes. The New York Times has counted at least 51,000 cases in universities and colleges around the country since the start of the pandemic, and many major college towns have become national hot spots. Many colleges, including OWU, are sending warnings and pleas but should they take more drastic matters like these universities by suspending students and sending them home? Or will we all eventually be sent home because of the number of increasing cases?

https://www.nytimes.com/2020/09/05/world/coronavirus-covid.html

Inflation Is Higher Than the Numbers Say

Are the numbers telling the true story behind what is really happening? The recent inflation statistics say prices have risen by 1% over the past year, but yet economic life is seemingly more expensive. "The problem is that measures like real output, real wages and poverty are calculated using inflation adjustments that don’t reflect the higher cost of living during a pandemic. This might help explain why measured poverty has fallen even as lines at food banks have grown." The BLS tracks the monthly percentage change in the price of a basket of goods and services that represents the average American. Typically, the substitution effect occurs when prices rise because people are taking the lower-cost alternatives. This has changed since the pandemic because people are buying more essential items, such as groceries, which is causing prices to rise and buying less non-essential things, such as airplane tickets, which is causing those prices to fall. Also, the pandemic has causes variety shortages. The calculations “impute the price of what a sold-out good would have been if available, effectively ignoring the inflationary costs of pandemic-fueled shortages.” While this rising cost of living may not be a big deal to some, it is directly affecting people on social security and other programs that are linked to inflation. “If inflation were falling — as the official statistics suggest — that would be read as evidence of insufficient demand, as people cut back on their spending. But if inflation is really rising, that suggests that supply side disruptions are a bigger problem than is widely appreciated. The source of these supply disruptions is in plain sight: It’s the virus.”

Wolfers, Justin. “Inflation Is Higher Than the Numbers Say.” The New York Times, The New York Times, 2 Sept. 2020, www.nytimes.com/2020/09/02/business/inflation-worse-pandemic-coronavirus.html.

Economic Recovery from Pandemic may favor the wealthy

 Many experts are beginning to worry about whether or not economic recovery from the coronavirus pandemic will further create a division between those under the poverty line and the top 1%. Primarily, economist are worried about a "K-shaped" recovery which would entail growth, but split sharply between industries and economic groups. As the stock market surged in March and see new heights, GDP plunged at its most ever at an annualized rate. Furthermore, something else to not is that 52% of stocks and mutual funds in the market right now are owned by America's top 1%. When examining what stocks have rose during this pandemic, it has been mostly tech companies. These dominating stocks help paint a picture of how our economy is shifting and leaving those behind with less access to the technology that will help shape our recovery. 

https://www.cnbc.com/2020/09/04/worries-grow-over-a-k-shaped-economic-recovery-that-favors-the-wealthy.html

Budget deficit to hit record $3.3 trillion due to virus, recession

"The federal budget deficit is projected to hit a record $3.3 trillion as huge government expenditures to fight the coronavirus and to prop up the economy have added more than $2 trillion to the federal ledger," the Congressional Budget Office said. This means that federal debt will exceed annual gross domestic product next year, which in the article is mentioned that this will be a milestone that would put the U.S. where it was in the aftermath of World War II when accumulated debt exceeded the size of the economy. The article also mentions that this $3.3 trillion figure is more than triple the 2019 shortfall and more than double the levels experienced after the market meltdown and Great Recession of 2008-09. This clearly is an alarming situation.

https://www.cnbc.com/2020/09/02/budget-deficit-to-hit-record-3point3-trillion-due-to-virus-recession.html

Job growth expected to slow sharply over the next decade, Labor Department says

     The Labor Department is expecting there to be 6 million new jobs added between 2020-2029, meaning the growth rate will only be around 0.4% per year in comparison to the 1.3% annual growth rate between between 2009-2019. In a bar-graph provided by the Bureau of Labor Statistics, Healthcare Support and Community and social service are expected to have the largest growth between 2020-2029  while occupations such as Farming, Sales, Production, and Office and Administrative support are expected to a negative percent change. They said that this is "a reflection of 'the outlook for business investment and efficiency gains anticipated in the use of labor and capital inputs.'"

North Korea's New Propaganda Push

 Recently, the North Korean regime has been busy with more ways to export their propaganda into western civilizations. Only this time, it is disguised in a different way. Normally, we are used to the North Korean propaganda that depicts the United States as the true evil and their issues with us. They usually try to show how strong of a military they have by flashing their arsenal as part of their tactic. However, now we are starting to see them shift away from this blueprint and into a different light.

    North Korean vlogger, Una, is now taking to the streets of North Korea to show a more softer side of her country. She shows viewers classrooms, grocery stores filled with items, places to run, and even all of the things you can do for fun in North Korea. The interesting part is she speaks in English and has French and North Korean subtitles. This is no doubt an attempt to export their propaganda into western countries. 

    We have talked a great deal in class about capitalism vs. socialism. Considering North Korea is one of the last remaining true socialist countries and there is a rise in people with socialist ideals within the United States and other countries this might become interesting. My only question is do you think this tactic will work or has North Korea is "too far gone" in the eyes of everywhere else?

https://www.wsj.com/video/north-koreas-new-push-to-export-its-propaganda/20405C1A-228A-46A9-844D-E43C64FA9EBE.html

US Debt to Exceed GDP for the First Time Since WWII

     As the coronavirus continues to ravage the nation and the economy, the government has been forced to support both business and workers with massive relief bills. Through multi-trillion dollar stimulus packages and massive industry bailouts, Congress has gone into the equivalent of war time spending. This has led to the US government debt exceeding the national GDP in the 2021 fiscal year, something that has not happened since WWII. The ratio of debt to GDP has exceeded 100% in quarters, though it has not exceeded it for a full fiscal year in almost 70 years.

    After WWII debt levels remained fairly stable and the debt to GDP level dropped to around 50%. However, economists today do not see this trend happening. The deficit was expected to continue growing over the next decade as much of the population aged and Social Security and Medicare remained in place, though the pace it is at now is unsustainable. The US is projected to be the only advanced economy to have a rising debt to GDP ratio after 2021. The issue with this comes with interest rates, and the sensitivity the debt will have to even small shifts in rates.

    Deficit spending in a time of crisis is necessary and inevitable to stabilize the economy and support citizens. It is after these crisis' are solved when things must be done to rebalance the budget and the economy. In the coming years the US will be forced into tough realizations over what to do with its debt problem.

https://www.wsj.com/articles/u-s-debt-is-set-to-exceed-size-of-the-economy-for-year-a-first-since-world-war-ii-11599051137?mod=hp_lead_pos5

The Fed's View on Inflation Rates

 https://www.bbc.com/news/business-53933239

The Federal Reserve has recently come out and said that they will be targeting "an average of 2% inflation, rather than making 2% a fixed goal". This will allow for some variability in the inflation rate in the coming months and years. 

The Federal Reserve views this as necessary because of the current situation with the pandemic. They are trying to keep unemployment as low as possible, even if that means sacrificing the inflation rate. I'm confident that the Fed could get the inflation rate under control if they needed to by raising interest rates, but they are trying to make loans as obtainable as possible for corporations and individuals. 

Do you think it is a good idea to sacrifice the inflation rate to keep loanable funds readily available for those who need him? Or should the Fed be targeting inflation before unemployment and other issues?

More Space, Please: Home Sales Booming Despite Pandemic, Recession

    The world continues to suffer from the COVID-19 pandemic which has crippled the economies of several countries. Thousands of individuals within the United States lost their jobs while others moved to work remotely. Several industries have struggled and faced losses, whereas others have managed to emerge out of this pandemic stronger, for example, the housing industry.  

    In his article 'More Space, Please: Home Sales Booming Despite Pandemic, Recession', Chris Arnold discusses the various factors that have contributed to the rising sales in the housing industry despite the ongoing crisis. The housing industry saw a steep decrease in sale from mid-February to late May. In June, however, the sale of existing homes rose by 20% Although this seems like a huge increase, but in my opinion this percentage tells us nothing. There was an increase of 20% from the previous month but when we look at the numbers, we see that the actual numbers are lower than what they were pre-pandemic.

    In July, there was a 25% increase in sales, and the numbers were higher compared to those in the pre-pandemic world. We clearly see an increase in the number of houses being bought. The reason behind this rapid drive are low mortgage rates (which are continuing to drop).

    Despite the historically high unemployment and an uncertain outlook for the economy, the housing market is recovering.

https://www.npr.org/2020/08/28/906725372/more-space-please-home-sales-booming-despite-pandemic-recession/

American Airlines to cut workers up to 19000

Covid-19 has brought terrible misfortunes to people all around the globe. From losing family members to suffering through the terrible illness, to losing jobs and income, people's lives have been changed in such a short space of time that a lot of people couldn't have imagined. 

In a bid to slow the spread of the virus, measures have been put in place by various countries to varying degrees of success.

In the USA, this is no different. Many economists and well-renowned thinkers say a recession is imminent. Job losses in the thousands and even millions are pushing people into debt. A lot of people might lose their homes causing a chain of effects not seen I'm decades-at least in these numbers. 

The airline industry has been hit very hard as people are trying to follow guidelines and general fear of contracting this dangerous virus. Air travel isn't as it used to be and it might never be the same again. 

According to the New York Times, "American Airlines warned employees on Tuesday that it would cut up to 19,000 workers on Oct. 1, saying that there was little sign that the pandemic-induced reluctance to travel was diminishing."

It also goes further to say "the company expects to have about 40,000 fewer employees on Oct. 1 than it did before the pandemic, a 30 percent decline in its workforce." 

These announcements have been made to put pressure on the government to give stimulus packages to the airline industry so these companies can pay their staff and not have to resort to laying off these huge numbers of workers.

For many other businesses, like hospitality and live entertainment, time is running out for them. Other sectors remain either shut down or severely restricted.

Cases of the virus remain high throughout the country even though the numbers are dropping slowly.

Niraj Chokshi and Ben Casselman from NYT write "Things could get worse in the coming months. Restaurants and other businesses that have been able to shift some operations outdoors will struggle when the weather turns colder. And health experts warn that infections are likely to rise again in the fall and winter. That means businesses have to prepare for the crisis to last well into 2021 — which in many cases will mean further layoffs and cost-cutting."

American Airlines expects to fly less than half flights in the remaining months of the year as compared to last year.

United Airlines aims to fly 50% until a vaccine comes around.

Domestic travel has fallen 44% whereas international flights have fallen 75% in the USA alone. 

Airlines have gone to great lengths to try to comfort a hesitant public, including by imposing mask requirements, cleaning planes frequently, and limiting seating capacity. But those changes have not brought passengers back in force as expected by airlines. 

It is only a matter of time before we see if this situation gets better or suffers even more.

https://www.nytimes.com/2020/08/25/business/american-airline-furlough-19000.html

 https://theweek.com/articles/925458/coronavirus-crisis-capitalism

In this article, Noah Millman analyzes the impact of recent government assistance programs and how these policies demonstrate the complexities of a capitalist economy that leans heavily on government aid. The author recounts a recent encounter with a restaurant owner who explained the effects the government’s loan has had on the restaurant industry. This restaurant owner, who Millman met because she was doubling as a waitress, explained that the government assistance deterred restaurant employees from coming to work. Although working, while still receiving government assistance, would increase employee’s pay, the risk of coronavirus infection from waiting tables dissuaded employees from coming to work. Additionally, because fewer customers are visiting restaurants, a limited supply of tables minimizes money from tips. However, even if the current government payouts are sufficient to keep workers at home, this solution is not sustainable. Because the government’s rationale behind their financial support for small business employees was to “freeze” the economy temporarily, while medical experts figured out how to solve the pandemic, it is clear this process cannot work much longer. With the death tolls of coronavirus rising, and no end to the pandemic in sight, the government cannot afford to offer this level of assistance forever.

The struggle to contain the virus, while helping usher employees back to work illustrates not only an economic dilemma, but a moral one. Millman captures this point succinctly: “On what basis can the government ever legitimately say: wait tables or you won't eat?” Because the government wants to ensure workers are being taken care of financially, it will likely continue to spend on their behalf. However, this approach undermines the root of capitalism — that a free market, without government assistance will naturally produce the goods and services society desires. Unfortunately, because of the moral concerns of forcing employees to go back to work, a capitalist model is insufficient to correct the economic pains of the coronavirus. Of course, restricting government assistance is not the remedy either, as this form of financial relief is the only backbone many Americans have. Yet, because such a solution cannot last forever, the government’s policy and financial guidance must be meticulously guided, understanding the weight each piece of fiscal policy carries in the pandemic. 

Coronavirus and Rent

    Since mid-March, COVID-19 has shook the whole world. In the U.S., the virus caused nationwide fear/worry, countless job losses, and lockdowns of all non-essential business. This has lead to an economic growth rate of -5.9% and an unemployment rate of about 10%. The US gov't implemented some aide to citizens such as the CARES act which included a flat $1200 tax credit for individuals.

    Yet many Americans were late or even completely missed out on rent payments from April to August. And with the expiration of eviction protection under the CARES act, a potential 40 million renters can be removed from their residence in the coming months. Although we will incur a great cost, I firmly believe the US gov't should extend protections to renters and/or provide another round of stimulus checks to assist the working class. Most of whom were hit more severely by this pandemic.

    I would love to hear any thoughts you all have on how we can handle this crisis.

https://www.nbcnews.com/think/opinion/coronavirus-rent-freezes-are-ending-wave-evictions-will-sweep-america-ncna1230916