The billionaires who profited from the pandemic should help pay for our recovery

‘The collective wealth gain of roughly a trillion dollars that the billionaires have enjoyed is more “than it would cost to send a stimulus check of $3,000 to every one of the roughly 330 million people in America,” the report states. “A family of four would receive over $12,000.” The report points out that a trillion dollars is also “double the two-year estimated budget gap of all state and local governments”—the deficit facing states that will certainly prompt them to make more cuts in public jobs and services if it isn’t addressed. The authors of the report don’t argue that taxing the recent gains of the mega-rich would cover the entire fiscal cost of the pandemic. They stress, instead, the undoubted fact that, at the very apex of U.S. society, there is now a staggering—and historic—amount of wealth that could be taxed.’

Read here (The New Yorker, Dec 10, 2020)

A tale of two economies: Stephen Roach

‘As financial markets celebrate the coming vaccine-led boom, the confluence of epidemiological and political aftershocks has pushed us back into a quagmire of heightened economic vulnerability. In Dickensian terms, to reach a “spring of hope,” we first must endure a “winter of despair.”...

‘With COVID-19 still raging – and rates of infection, hospitalization, and death now spiraling out of control (again) – the near-term risks to economic activity have tipped decidedly to the downside in the United States and Europe. The combination of pandemic fatigue and the politicization of public health practices has come into play at precisely the moment when the long anticipated second wave of COVID-19 is at hand.

‘Unfortunately, this fits the script of the dreaded double-dip recession that I warned of recently. The bottom-line bears repeating: Apparent economic recoveries in the US have given way to relapses in eight of the 11 business cycles since World War II. The relapses reflect two conditions: lingering vulnerability from the recession, itself, and the likelihood of aftershocks. Unfortunately, both conditions have now been satisfied.’

Read here (Project Syndicate, Nov 24, 2020)

We need fresh ideas to handle the Covid recession — Jeyakumar Devaraj

‘What is the most appropriate budget for Malaysia to navigate the economic recession that the Covid pandemic has precipitated? This is the crucial issue we should be discussing so that appropriate solutions can be found. Each country needs to develop a national consensus on how the finite financial capacity of the nation should be deployed to limit the health and economic fallout of the ongoing pandemic. Unfortunately, we in Malaysia have been distracted by political intrigues for far too long.

‘The PSM would like to share our analysis of the current recession and put forward a set of ideas on how we should tackle the economic fallout of the Covid Pandemic. We need a clear understanding of the situation we are in so that we can plan coherently for the coming year...’ 

The analysis and suggestions come under seven headings:

1. We cannot “talk up” the economy
2. Pumping in more credit into the system is not going to work
3. The government has to take the lead role in managing the economy and protecting the rakyat
4. This is not going to be a V-shaped recession
5. More targeted relief for the poorest families
6. A “Green New Deal” for Malaysia
7. The government should use “debt monetisation” as one of the methods to raise funds for the programs mentioned above.

Read here (The Malay Mail, Oct 28, 2020) 

The pandemic’s complex cocktail

‘Over the past few years, investors have tended to be richly rewarded for setting aside traditional determinants of market value and focusing on just one thing: plentiful and predictable liquidity injections into the marketplace. But the next few months will likely be a bigger test for this wager. Wall Street has decoupled from Main Street in a way that few expected. It would be a mistake to keep extrapolating into the future without stopping to ask about the mounting collateral damage and unintended consequences.’

Read here (Project Syndicate, Oct 6, 2020)

America’s coming double dip

‘Soaring financial markets are blithely indifferent to lingering vulnerabilities in the US economy. But the impact of consumers' fear of COVID-19 on pandemic-sensitive services are unlikely to subside, undermining the case for the uninterrupted recovery that investors seem to expect.’

Read here (Project Syndicate, August 25, 2020) 

Why stock markets are so calm amid global economic turmoil

‘Those numerous analysts who warned of a dead-cat bounce have so far been proved wrong. A survey by CNBC found that a fifth of global Chief Financial Officers think the Dow Jones will continue to rally, without major declines along the way. However, more than half now believe the index will soon crash below its March low of 18.591.

"There's going to be a meaningful correction once people realize this is going to be a U-shaped recovery," Nouriel Roubini, professor of economics at New York University's Stern School of Business, told New Yorker magazine last month. "If you listen carefully to what Fed officials are saying — or even what JPMorgan and Goldman Sachs are saying — initially they were all in the V camp [V-shaped recovery], but now they're all saying, 'well, maybe it's going to be more of a U'."

Read here (DW, June 4, 2020)

Amar Singh and other doctors offer guidelines for supermarkets under new normal

‘Supermarkets play an important role in Covid-19 prevention. Many supermarkets have put in place measures to limit the spread of Covid-19 at their premises. However, as the movement control order is relaxed, and client numbers increase, supermarkets will have to be even more vigilant.

‘We offer here a “Guide for Supermarkets to Standardise Covid-19 Prevention”: The “new normal” for supermarkets. This guide aims to help standardise the measures to be taken by all supermarkets, as well as offer ideas and initiatives that could be taken.’

Read here (The Malay Mail, April 22, 2020)