This morning's financial news makes two things clear.
The first is that financial intervention from Central Banks is not enough to allay market fears. They know, and they're right to know, that cutting the cost of money will not resolve this problem. Providing extra lines of credit will not do so either. It's how they use them that matters. And no one has a clue on that right now, it seems.
Second, markets are sure that some sectors, starting with airlines and then moving into tourism and hospitality, have little chance of surviving this crisis as things stand. It's already apparent that my blog from just a couple of days ago suggesting that airlines will be wiped out was true: that's exactly what they are saying now.
So, the question is what to do?
Right now I am too tired to deal with the issue....but maybe later on his morning I will return to it. The need for the most radical of thinking, and reforms, has arrived. And let me promise you, this time it is impossible for anything to be the same again. That's the one certainty we have got.
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With governments worldwide being pressed for bailouts that might run to the tune of trillions of dollars, I can’t think of a better time to insist on the closure of tax havens and the end of siphoning profits offshore. Given the likely death toll of this virus, along with the damage to the economy, I think there would be huge public pressure to ensure that businesses and super rich individuals pay their fair share of tax to rebuild our shattered societies.
History will teach us what we need to know.
Look at the economics after WW1 and the Spanish flu epidemic for clues.
Not necessarily in the same order though. The broad sweep of the early 20th century was world war, pestilence, roaring twenties, financial crash, fascism, world war again.
We started with the roaring 1980s/90s/2000s, then had the financial crash, leapt into fascism and then pestilence. Only one left – and increasing nationalism and harder borders makes armed conflict more likely. Not to mention global warming, changing patterns of rainfall, population increase in Africa…
Sorry, having a Cassandra moment.
No problem
No one much likes Cassandras (I know….) but they’re important
Nine years after the Spanish Flu epidemic came the Wall Street Crash and the Great Depression. And ten years after the Wall Street crash came the start of the Second World War. Just saying.
Enough!
If there is one thing I’d like to come out of this crisis, is the end of a consumptive economy. (pun intended). Today many people are reassessing what is important. That expensive handbag or premium car are looking rather useless today, especially when no one is thinking “Gosh you can afford to waste your money on that, you must be successful”.
It all returns to the basics of Food, Access to health services, Shelter, and Companionship.
The world can provide these to everyone with perhaps only 10% of the population actually working. 90% of the world population have to get access to the basics, so we have a society that uses flattery to distribute the money widely.
As a multi-millionaire with full discretion over how I spend my time and money, I’ve found that my living costs get ever more modest, as the blandishments of consumerism pale. Our fresh home cooked food is better than most restaurants, my local pub and networking groups as challenging and entertaining as any conference or concert. The view of sport and performances better on my TV than any venue. ( Yes, some enjoy the crowds).
Anyway, got that off my chest!
Agree, but by past experience those in power will cling on by all means fair or fowl. Without a mass disobedience campaign (and even that is dodgy with emergency powers on the way), we have few options available. It doesn’t help that we have a compliant/colluding media unable and unwilling to investigate and question the official narrative.
Radical reforms are necessary, but how will that happen with the neoliberals in charge?
I hope reforms will start at the individual level by people asking themselves and their governments some fundamental questions, such as, Do we really need to fly so much, whether it’s half-way round the world visiting relatives or on an “exotic” holiday? or short haul when there are more environmentally friendly forms of transport available and needing investment? Do I need to drive so often or should I cycle or walk? Do I really need strawberries at Christmas or should I start buying more local and in season, because our food security is plummeting? What sort of government do I want – one elected to virtual dictatorship thanks to FPTP or one more representative of the electorate’s preferences? What kind of NHS do I want and why is it’s resilience so inadequate that it has no hope of dealing effectively and equitably with the current pandemic?
And, have I really tried to educate myself to start understanding the complex issues that are politics, economics and our relations with other countries and other peoples?
Still not sure about that.
As soon as it is over, a great amount of effort might go into doing it all wrong again. As a sceptic I just need a higher level of proof I’m afraid. Remember how we got here? Hmm?
We have to remember that the Tories won an election with a very large majority. Coronavirus may change things but it won’t be for the benefit of the vast majority of the population. Neoliberalism will come out of this crisis strengthened rather than defeated. Yes, I agree things will be different but they won’t be better because no one is arguing for a better world. The man most likely to become leader of the Labour Party just wants to tinker with existing order, not change it. Very sad that the present leadership of Labour and all visible future ones are neoliberals. The only guy who knew anything about MMT was Chris Williamson and they expelled him. Where are the UK equivalents of Bill Mitchell, Randall Wray, Warren Mosler and Stephanie Kelton? Nowhere to be seen.
Hello?
They’re not getting much publicity in the US either
And here MMT is unfortunately riven apart by the antagonistic behaviour of Bill Mitchell – which is deeply unfortunate