The economic consequences of the lockdown (3)

The best thing I’ve read so far on this topic is an interview of Thomas Ferguson by Paul Jay.

They’re both interesting characters. Ferguson is a professor emeritus of political scientist and the best U.S. expert on money in politics.

Paul Jay

Paul Jay, along with Sharmini Perez, is a co-founder of The Real News Network, an alternative web-based news site.  Last summer they left or were ejected from the organization for reasons unknown to the public.  Jay has started a new podcast called

In the interview, Ferguson made the point that, in the recent bailout, Congress chose to bail out big businesses with the expectation that this would enable them to hire laid-off and idled workers.

Instead, he said, most of the CEOs decided to keep the money and let working people fend for themselves.  Ferguson said it would have been far better to provide individual relief.  They would have spent money and helped to revive the economy when the lockdown ended.

Congress also should have provided aid to cash-strapped state, county and municipal governments, he said.  One economic effect of the lockdown has been to choke off tax revenue they need to provide essential services.  The federal government, unlike the states, has the power to create money and isn’t limited, as many states are, by constitutions requiring balanced budgets.


Big Business Takes Cash As Workers Laid Off, States and Cities Go Bust, an interview of Thomas Ferguson by Paul Jay for  A bit long, but comprehensive and highly recommended.

The Quarantine Is Failing Because Our Institutions Weren’t Built for It by Benjamin Studebaker. [Added 5/10/2020]

The Pandemic Jobless Youthquake by David Blanchflower for New York Review of Books [Added 5/10/2020]

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One Response to “The economic consequences of the lockdown (3)”

  1. Fred (Au Natural) Says:

    That makes perfect sense. There are a lot of small and intermediate businesses that aren’t going to make it. Especially since larger businesses seem to have gobbled up all the small business money.

    The giga-businesses won’t have any problems. They probably see this as an opportunity to RIF their way to a leaner business model. Of course, internet retail is making money hand over fist.


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