Tuesday, June 16, 2020

Tuesday Evening Links

This and that for your Tuesday reading.

- James Galbraith offers a reality check to anybody counting on an immediate U.S. economic bounceback in the midst of an ongoing pandemic:
(P)eople do distinguish between needs and wants. Americans need to eat, but they mostly don’t need to eat out. They don’t need to travel. Restaurant owners and airlines therefore have two problems: they can’t cover costs while their capacity is limited for public-health reasons, and demand would be down even if the coronavirus disappeared. This explains why many businesses are not reopening even though they legally can. Others are reopening, but fear they cannot hold out for long. And the many millions of workers in America’s vast services sector are realizing that their jobs are simply not essential.

Meanwhile, US household debts – rent, mortgage, and utility arrears, as well as interest on education and car loans – have continued to mount. True, stimulus checks have helped: defaults have so far been modest, and many landlords have been accommodating. But as people face long periods with lower incomes, they will continue to hoard funds to ensure that they can repay their fixed debts. As if all this were not enough, falling sales- and income-tax revenues are prompting US state and local governments to cut spending, compounding the loss of jobs and incomes.

America’s economic plight is structural. It is not simply the consequence of Trump’s incompetence or House Speaker Nancy Pelosi’s poor political strategy. It reflects systemic changes over 50 years that have created an economy based on global demand for advanced goods, consumer demand for frills, and ever-growing household and business debts. This economy was in many ways prosperous, and it provided jobs and incomes to many millions. Yet it was a house of cards, and COVID-19 has blown it down.

 “Reopen America” is therefore an economic and political fantasy. Incumbent politicians crave a cheery growth rebound, and the depth of the collapse makes possible some attractive short-term numbers. But taking them seriously will merely set the stage for a new round of disillusion. As nationwide protests against systemic racism and police brutality show, disillusion is America’s one big growth sector right now.
- Armine Yalnizyan and Laurell Richie discuss why cancelling the CERB would figure to prove disastrous (and it's hardly to the Libs' credit that they've kicked the can down the road only another couple of months). And Heather Scoffield rebuts the arguments against a secure income in a time of crisis.

- Michael Grabell, Claire Perlman and Bernice Yeung expose the lobbying carried out by U.S. meatpackers looking to keep their employees' lives at risk. And Michael Corkery and David Yaffe-Bellany report that loud warnings about domestic meat shortages were in fact used to goose pork exports to China.

- Alice Walton reports on new research showing how face masks may be the key to controlling the spread of COVID-19 while allowing for somewhat more social interaction.

- Finally, Alex Hemingway writes that a wealth tax on the ultra-rich is within reach (and would result in plenty of beneficial outcomes). And Karl Nerenberg looks at some of the many ways to ensure the wealthy pay their fair share toward relief and recovery efforts.

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