Posts Tagged ‘Pandemic Recession’

Pandemic recession and higher education

May 3, 2021

A chart of two recessions

March 9, 2021

Click to enlarge.

The Employment Situation Is Far Worse Than the Employment Rate Indicates by Calculated Risk.

Will we have a K-shaped recovery?

March 3, 2021

A K-shaped recovery is when the holders of financial assets do very well, and wage-earners don’t.

The recovery from the Great Recession of 2008 was a K-shaped recovery.  The Obama administration bailed out the financiers who helped cause and deepen the recession, and left mortgage-holders to fend for themselves.  

The political result was a decline in the Democratic vote, which made possible Donald Trump’s victory in 2016.  During the pandemic recession of 2020, the response of both Democrats and Republicans was to bail out the financial institutions and Fortune 500 corporations, while giving very limited help to the unemployed, front-line workers and small-business owners.

Evidently President Biden and Democrats in Congress realize that the government needs to do more now than it did then.  That’s good.  But will they do enough?

Here’s what Matt Taibbi has to say:

This is a fascinating moment in American history. On the one hand, generations of elite-focused politics have left a tiny oligarchical minority not only in possession of massively increased wealth, but also political power. Since 2008, we’ve seen increased disparities in income, but also criminal justice outcomes, regulatory attention, access to tax loopholes, political influence (through decisions like Citizens United), vulnerability to surveillance, and rights to transparency, and, lately, speech. With the corporate-friendly Biden administration in office, there’s a clear opportunity for his backers to continue the K-shaped influence distribution if they wanted.

But we may be at the end of the era where even the most rapacious interests feel they can get away with such policies. Between the 2016 election of Trump, the near-nomination of Sanders in 2020, and widespread unrest on both the left and right, it sounds like the Washington consensus is inching toward the realization that they finally have to deliver something significant for ordinary people, if they want to keep their cushy DC sinecures, to say nothing of staying pitchfork-free.

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The coming pandemic economic crisis

November 30, 2020

Joe Biden will be sworn in as President of a nation in which millions are unable to pay their bills and most of the programs to help them will have expired.

There will be much that he can do, with or without the cooperation of the Senate.  But what he will do is another question.

Here’s the deal.  The Center on Budget and Policy Priorities reported that—

  1. Nearly 26 million American adults—12 percent of all adults—reported they sometimes or often had difficulty in putting enough food on the table during the first week in November.  That’s triple the pre-pandemic percentage.
  2. An estimated 13.5 million adult renters—about one in five renters—were behind in their rent.
  3. Nearly 81 million adults—one in three—reported it was somewhat or very difficult to pay their usual bills.
  4. In September, some 31 million Americans met the official definition of “unemployed” or were part of a household of an unemployed person.

Bankruptcy filings are mounting, and that is just the tip of the iceberg.  Many owners of failed small businesses can’t even afford to file for bankruptcy.  State and local governments, meanwhile, are running out of money.

Most of the federal emergency programs to alleviate the crisis will expire at the end of the year.  The $600-a-week supplement to state unemployment insurance expired July 31.  The rest of the unemployment insurance supplement will expire at the end of the year.  An estimated 13.5 million Americans benefit from pandemic-related unemployment relief.

The Senate and House of Representatives are deadlocked  on how to extend emergency programs.

So will the moratorium on evictions decreed by the Centers for Disease Control.  That wasn’t sustainable as a permanent policy anyway.  Property owners who make a living from rental income need that income to maintain the properties and usually to pay for utilities.

And the moratorium on student debt payments decreed by President Trump also expires at the end of the year.  About 32 million Americans had loans eligible for suspended payments. 

Both the renters nor the student debtors still owe the full amount.  They got a temporary suspension of payments, not relief.

∞∞

Joe Biden is the first President to be take office in the middle of a national crisis in which one house of Congress is controlled by the opposition political party.  This limits his freedom of action, but progressives say existing law gives him a great deal of power.

The Higher Education Act gives the Secretary of Education authority to settle all publicly-held student debt and cancel all or part of it.  David Dayan of The American Prospect says that covers 95 percent of American student debt, which is up to $1.5 trillion.  This would help stimulate the economy by making it easier to get a home mortgage or an auto loan.

Biden also would have the authority to forgive up to $50,000 of student debt by executive order.

The Affordable Care Act authorizes the Secretary of Health and Human Services to create a pilot program to cover medical expenses of anyone who suffers from an environmental health problem.   The coronavirus, Dayan said, is an environmental health problem.

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Snapshots of the pandemic recession

November 30, 2020

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Source: Center on Budget and Policy Priorities.