Showing posts with label COVID19. Show all posts
Showing posts with label COVID19. Show all posts

Monday, December 7, 2020

COVID Reveals What’s Actually Important


The COVID crisis reveals what’s actually important: family, food and community. It also shows what’s not important: material items and money worship. Globalization, too, a specific form of money worship, proved unable to support the domestic production of basic but critical supplies, like masks, in a time of crisis.

Another thing revealed by this crisis is the true cost of racism. It shows how racism supports mediocrity. 

The crisis reveals the moral and spiritual bankruptcy embedded in some of the “religious” claims by white racists in the US. These appear to be materialistic and greed-based misinterpretations. This is a self-centered version of “faith” that somehow justifies not wearing a mask in the middle of a pandemic. In addition to being irrational, any logical interpretation of this behavior reveals the selfishness driving this behavior. The common thread is veneration of white privilege, including the right to impose a deadly pandemic on Black people, simply because some white people choose to do so. No appeal to free markets, personal liberty, or state’s rights can justify the damage done to the entire community by these irrational, anti-science based behaviors. These mirror, directly, violent racial extremism.

This hatred of Black people specifically, the descendants of people who played a critical role in building the country, has always been irrational. Blacks bore the brunt of the damage racism has caused, but always knew this social damage was going to grow. Targeting blacks is a reflection of white fear and mediocrity, nowhere better seen than in the performance of the current (December, 2020) president. The other thing this crisis reveals is the central role that lying plays in white supremacy: in 1,316 days, the current president told 22,247 lies. 

Black people don’t oppose white supremacy just because it damages Black people. Historically, Blacks have tried to make the case that anti-Black racism imposes significant costs on the entire society. Those who promoted this line of reasoning have either been assassinated, like MLK or assimilated, like Obama. Under either outcome, the result is the continuation of white supremacy, to the now clear detriment of society. 

Both humanity and the planet continue to suffer.


Monday, April 20, 2020

Economic and Social Costs of "Reopening"​ America

Asking "mainstream" economists about reopening the economy in the face of the current crisis is unlikely to generate useful advice. These are the same people who missed the 2008 financial crisis (page 6, top) and were unable to predict the election of Donald Trump in 2016.

An independent view on the economic impacts of the Coronavirus, informed by relevant insight from American history – in this case, Black Wall Street/Tulsa, Oklahoma, may better explain the exact nature of the problem the country now faces.

The Greenwood District in Tulsa, Oklahoma was one of the most prominent concentrations of African-American businesses in the United States. It was razed to the ground in the Tulsa race massacre of 1921, in which white residents massacred as many as 300 black residents, injuring hundreds more. Our analysis starts by comparing the economic devastation wrought by this incident to that of the coronavirus, since, like the virus, business properties were rendered uninhabitable. In addition, broad swaths of the population were instantaneously unemployed. Wealth, for both Blacks and whites, was destroyed on a massive scale, .

Our analysis shows social costs from the virus total $30 trillion. The economic costs are $15 trillion. (Note: these are NOT the actual impact numbers from our analysis. They are correct ordinally, however. For more, email us at info@creativeinvest.com and see https://twisri.blogspot.com/2018/11/william-michael-cunningham-on-impact.html.)

The bottom line: economic impacts pale in the face of human pain and suffering. This mandates a focus on the human, not the economic.

The rush to open the economy reveals the greed and inability to operate in the public interest that is the cause of the unethical financial institution behavior observed in recent decades. Mainstream economists missed this. This exposes larger issues about the true nature of the economy and western economists. The celebrity veneration, money worship and focus on shareholder wealth maximization that dominate business strategy dictates the economy be reopened as soon as possible.

In the push for short-term profits to meet the demands of investors - a small, nonminority, nonrepresentative group - human considerations are subordinate. (A Former Wells Fargo CEO wants people to go back to work and 'see what happens.' He said 'Some may even die, I don't know.' The ex-CEO of Goldman Sachs wants “those with a lower risk to the disease return to work,” in a few weeks. These are simply greedy, unpatriotic institutions and individuals whose lack of empathy, in the midst of this crisis, is the textbook definition of a psychopath.) Regulators and policymakers have been excessively deferential to this group of investors, to the exclusion of human needs.

Cost reductions, the main tactic used to maximize shareholder wealth, eliminated excess financial capacity across the economy. This is what various fiscal and monetary programs have attempted to replicate. They have failed so far.

This is key. The interruption in revenue that is the main result of the shutdown has driven many firms out of business, but, in the face of a highly contagious virus, reopening the economy now makes little sense. In addition to the human suffering this will cause, it will eventually lead to a second or third shutdown. Thus, a focus on the economic is not only inhumane but inefficient.

In order to address the current crisis, efficient monetary and fiscal demand side stimulus is required. Monetary policy operates through banks, a small set of privately owned, profit maximizing institutions. These lower both social and financial return. Fiscal policy is suspect as well, as proven by the failures of the Paycheck Protection Business Loan (PPP) program. As we indicated, and as the head of the Atlanta Federal Reserve Bank confirmed, U.S. small businesses alone may need $6 trillion on an annual basis to ensure their survival through the coronavirus crisis.

As with much of the current situation, rational planning focused on human needs is absent. Such a plan would involve global coordination, with global virus testing and synchronized global fiscal and monetary stimulus. Current political, cultural and economic practices are completely unsuited for this level of cooperation. (We note that this stimulus could be generated efficiently, at a very disaggregated level through a widely held cryptocurrency.)

Until we have a rational plan, any attempt to reopen the economy will, in the long run, generate massive social and financial costs.

It will, in other words, fail.

Friday, April 10, 2020

Open letter to the Congressional Black Caucus (with apologies to Mr. Lincoln.)

Four months ago, our nation was made host to a virulent, deadly visitor, brought to this continent surreptitiously. A new virus, uncovered in China, unsparing in occurrence.

Now we are engaged in a great experiment, testing whether any nation with significant divisions based on politics, race and wealth, can survive in the face of such a disease. We have come to give our testimony while we still can, to help insure the survival of all who participate in this society. We are writing not as millionaires but as common people, like the medical and public safety workers who gave their lives that this nation might live. As citizens of the world, we have an obligation to speak out. As citizens of the US, we have the right to do so.

We offer an independent view on the economic impacts, having gained relevant insight from American history – in this case, from Black Wall Street/Tulsa, Oklahoma, to better understand the exact nature of the economic problem the country now faces. Of course, in a larger sense, we know that economic impacts pale in the face of human pain and suffering. This mandates a focus on the human, not the economic.

The world will not notice, or remember, what is said by imperfect people with imperfect means to correct the current condition. Our goal is to make sure that this situation is not used to argue for the inherent inferiority of those most impacted by this virus. We are dying at elevated rates not due to some ingrained defect. Rather, the defect resides in a racist, bigoted and biased system for the allocation of resources, including health care resources. This crisis offers an opportunity to correct this misallocation.

As an organization, we have long been dedicated to this unfinished work. We call upon you, as members of the Congressional Black Caucus to insure that all deaths from this virus will ultimately have meaning —and that democratic government, tasked with providing relief from an affliction that knows no race, status or geography, necessitating fairness and equity, will not cease to exist.

Monday, March 30, 2020

Economic Impact of the COVID19 Crisis. Comments by Jalil Boulahssas, Impact Investing Intern, University of Richmond


As the United States and the world continue to see a rise in COVID-19 cases, evidence of a considerable economic downturn continues to stack up.

It seems, at the moment, that aggressive social distancing measures and the resulting business slowdown are the best ways to protect the economy and to save countless lives.

Goldman Sachs economists have predicted that second-quarter GDP will drop 24% with a 3.8% contraction for the full year 2020. The bank has also stated that they expect unemployment to reach as high as 9%. In a more extreme prediction, the president of the St. Louis Fed, James Bullard, has warned that unemployment could reach as high as 30% and GDP could drop as much as 50% in the coming quarter.

While economic policy put into place so far focuses on stimulus and direct spending, there should be a heightened focus on the most vulnerable demographics in times of crisis. Despite the fact that everyone, other than essential workers, have been instructed to remain home, there are many who have outright lost their positions and sources of income.

Business closures are resulting in layoffs, as business owners and managers adjust to reducing output and to significantly less revenue. Minority group members and hourly wage workers have been most highly affected.

In a uniquely difficult time like this one, it is not all Americans who need a $1,200 check from the federal government but, for those who really need it, this amount is unlikely to be sufficient.

As economic indicators begin to show the effects of COVID-19 and predictions continue to change, more aggressive action should be taken by all levels of government to soften the effect of this crisis.