The horizon is not so far as we can see, but as far as we can imagine

Economic Consequences of the Pandemic

Or, I should say, rather, of the Fed and Congress’s actions.

The Federal Reserve has spent one trillion a day for 30 days (when this is over, they’ll have spent more) to prop up markets and financial firms. They’re buying debt, and making non-recourse loans (non-recourse means there is no penalty for not paying the loan back).

Congress’s deal, includes $350 billion for small businesses, and $1,200 for individuals, +$500 per child, and some excellent provisions for laid off workers–but this is a one time payment, and if things go on, how many more be passed when business has their bailout? It also has some fairly stringent restrictions on stock buybacks and executive compensation.

But most of the bailing out, in this crisis (as in 2008), will be done through the Federal Reserve, whose operations dwarf those of Congress and the Treasury department.

Assuming this crisis goes on for months, in waves, which is what the science seems to say, predicting the end result is simple: A lot of small businesses will go out of business. A lot of people will lose their homes, and a lot of small landlords (not large ones) will lose their property.

Companies which are bailed out, and companies and individuals with strong cash positions going in, like private equity, will then do what they did after 2008: They’ll buy up distressed assets for dimes on the dollar and wind up owning more of the economy than they did going in. Industries will consolidate, as smaller firms go under, and the remaining companies will be even too-bigger-to-fail.

Must it be this way? No. Will it be this way? Assuming the policies continue as they are, yup. But there’s a lot of road to go, and when people start dying in droves the calculus may change if the politics change. In particular, if people truly can’t afford to eat or pay rent, in large numbers, things may get nasty. It’ll be interesting to see just how whipped Americans are: Are there circumstances under which they’ll actually revolt in a way that hurts elites?

A lot of this depends on how the pandemic plays out. If Trump and idiot governors can be convinced to stick out isolation, probably they’ll be able to slide by. If not, things will get ugly.

Much will also depend on whether Republicans want more bailouts through fiscal policy for corporations. If they don’t, they will resist sufficient money for ordinary people, which will make things worse (and cause people to break isolation).

It’s going to be an interesting few months.

But basically, nothing has changed in ruling lass ideology: Every crisis is to be used to increase the share of the economy, national wealth, and the income that the rich control.

So for this crisis is no exception.

(Update: Matt Stoller reports there’s trillions more dollars of giveaways:

So that’s the stuff that’s been reported. Here’s what hasn’t, and why the bill goes up in value to $6-10 trillion.

  • An additional $4 trillion from the Federal Reserve in lending power to be lent to big corporations and banks.
  • Authorization to bail out money market funds, multi-trillion dollar unregulated bank-like deposits for the superrich.
  • Authorization for the the government through the Federal Deposit Insurance Corporation to guarantee trillions of dollars of risky bank debt.)

The results of the work I do, like this article, are free, but food isn’t, so if you value my work, please DONATE or SUBSCRIBE.



How to Save the Economy and Not Kill Millions


Will Trump’s Fumbling of Covid-19 Lead to His Exit in Weeks?


  1. O/T

    “The Italian Connection” @ looks at the Italian data and suggests that hospital transmission is primary. One of the comments about how fastidious the Koreans are in contact tracing is also very interesting.

    The author didn’t consider whether simple doctors’ office visits, outside of hospitals, might actually be more of a vector. Probably, such data has not been collected. However, I should think it’s worth looking into.

    I remember a corporate doctor who wanted to peer into my ears, using that funnel device that already had somebody else’s ear wax in it! Then, too, there was a doctor who removed my stitches, who blew onto the tweezers.

    Yup! I’d get the data on doctors’ visits, also !

  2. Stirling S Newberry

    The first part was past last night.

  3. anon

    The average American is not a Bernie Sanders supporter (even though an increasing majority support his policies) or Ian Welsh reader. I don’t trust that Americans will revolt against the elites. If they wanted to, they would have done so in the voting booth, by not voting for Trump or Biden. My fear is that, like 9/11, they will revolt against innocent individuals around them. That includes using their guns to kill innocents with things they want, health care workers who could not take in their loved ones because hospitals were filled to capacity, and Asian Americans. Things will undoubtedly get ugly, but not much so for the elites protected in their gated communities.

  4. Astrid

    The first part was the Fed removing reserve requirements and cannoning money at Wall Street. Last night was peanuts in comparison, but signaled that all the politicians will go along with the plan. Socialism for corporate persons, streets for everyone outside of the top 0.1 percent. They have no problem with doctors and nurses dropping like flies from lack of PPE. Now healthcare workers know what non-PMC people have lived for the last 30 years.

    You have to dig pretty deep into Roman and Byzantine history to find equals for the current bunch. Wonder what they’ll do if the coronavirus mutates into something more lethal, with 25 or 50 percent chance of ARDS onset.

  5. Trent

    I think the virus is real, but i also think it isn’t as bad as the media is amplifying it to be. The house of cards began to fall apart back in september, well you could argue its been falling apart since 2008 since the stimulus has been constant since then, but i think starting in september 2019 it was beyond the feds understanding and control. Markets begin to crumble, and we use the virus as cover to pass all kinds of free goodies for giant corporations. Never let a crisis go to waste.

  6. Jace

    For our part, if we cannot pay the mortgage because I have been ‘scheduled to zero hours, but classified as essential’, we have decided we’ll test the community bonds, as our longest property boundary is with our elected Sheriff. Will he evict his neighbor? We shall see.

  7. Trent

    Think about it, would all these bailouts have been able to pass without a crisis going on in the background?

  8. Jace


    My wife is in administration for the largest charitable medical organization in northern New England. This obviously doesn’t make me an expert in anything. But I do live with an expert, who works 18 hrs at practice, and 2 to 4 more at home, most days.

    Judging from the communication coming from their crisis working group, and their interaction with local and state authorities, it seems to be much, much worse than the cheerleading, stick-market obsessed corporate press potrays it to be.

  9. Trent


    Thank you for your comment. I’ve heard lots of that too. But thats it just it, we’ve heard. None of us has seen evidence. It’s all second hand. I can see with my eyes the bailouts going on. I haven’t seen any new hospitals being built. Though i’ve finally heard, after a month or so, talk of them finally building new hospitals due to this. I do not trust the government, in any of their actions, nor do i trust the companies that run the government. 9/11: expands the governments powers to spy on us and start wars, seems to me the government benefited the most. 2008: government now basically funds itself by printing money, does nothing for the people, seems to me government benefits the most again. Covid-19: Government prints even more money then 2008 and DOJ now wants to be able to detain you indefinitely due to the virus, once again government and corporations seems to benefit the most.

  10. Jace


    I think maybe it’s not new hospitals being built that’s an indicator. We probably aren’t going to follow practices common to Beijing or Moscow. Look perhaps at conversions of existing facilities. Southern NH, which is not all that densely populated, but which is adjacent to very densely populated eastern and northern Mass., has seen two high schools (in Nashua and Manchester), two colleges (St. Anselm and SNHU) and a convention center (in Manchester) converted to hospital use. The colleges already have National Guard on site.

  11. It’s called Disaster Capitalism Trent, and has been a part of the conversation for a long time. The Original Tea Baggers, the Maine, Pancho Villa, Reichstag, Pearl Harbor, Gulf of Tonkin, “9/11”. The ends justify the means.

  12. Jace

    That capitalists are institutionally prepared to profit off catastrophe doesn’t mean the catastrophes (esp. obviously occuring ones, as Italy, Iran, Wuhan and New York have shown) are staged, fake or exaggerated.

  13. StewartM

    Once again, there is a fairly clear path of correct actions to be done, and just like in 2008-2009, our government chooses to opt for the least effective, most expensive, and most destructive solution.

    Yes, we need to be able to keep most people off the streets and in their homes. This could be done by a combination of things—UBI, the government maintaining payrolls, waivers for rent and mortgage, etc. Yes, we need to keep pensions and retirement funds afloat (we could probably be generous and backfill 401ks and IRAs with Treasury notes to make up the losses since January, and do this to a limit of one, two or even three million dollars for FAR less than what this is going to cost). We need to address our dire medical needs for this pandemic, and probably provide support for stressed industries. (But bailing out Boeing is not the same as bailing out their stockholders and board, as Stoller notes).

    However, the general notion of bailing out the financial markets per se it nuts. Let them crash. Also, simply forbid foreign investors from buying them up during this crises if American ownership is important.

  14. Jeff in Texas

    “It also has some fairly stringent restrictions on stock buybacks and executive compensation.”

    All subject to waiver by the Secretary of the Treasury.

    This is a bipartisan robbery. Business as usual.

  15. different clue


    I am certainly not going to ask a question to which the answer is not my proper concern. So I will just idly wonder whether you are making plans to sabotage your property and destroy its value if you foresee an unavoidable eviction coming? Things like filling the toilet and bathtub and hot water heater with concrete? Pushing concrete as far down the “your own sewer service lines” as you can? Have you thought about whether there is a way to open up the furnace and fill it with concrete? Carefully remove every electric socket-outlet faceplate and hide a little piece of shrimp or fish in the little cavity space and then replace the faceplates? Etc. etc. etc?

  16. different clue


    Is the sheriff merely a random neighbor? Or is he a friendly neighbor? Is prediscussing with your neighbor the sheriff about whether he would carry out the eviction if given the order to do so . . . something you can legally do? If not, can you have a more general hypothetical discussion about how the sheriff’s department feels-in-general about evicting mass-quantities of law-abiding homeowners if they are rendered evictable through economic collapse? What the sheriff feels in general may be a clue as to what the sheriff will do if you become evictable-ized.

    If you have enough highly sunlit shade-free land for serious high-production food-growing, would you be in a position to develop a serious modest-surplus-producing garden? Featuring the kind of fruits and vegetables the sheriff likes to eat, if you know what they are? If evictable-ization coincides with fruit-and-vegetable supply chain ruptures and breakdowns, the sheriff might be hesitant to evict the guardian -producer of his potential over-the-fence food supply.

    Any merit to that line of thinking?

  17. Jace


    No, just stop paying, once we run out of money. And see if the sheriff prioritizes eviction of his neighbors over public health.

  18. Stormcrow


    “The Italian Connection” @ looks at the Italian data and suggests that hospital transmission is primary.

    Not very subtle.

    I wouldn’t take the unsupported word of a climate change denialist site (namely, wattsupwiththat) that the sun rises in the east.

  19. Hugh

    It seems like between 6PM-7PM now we get the Daily Trump Show. I guess Trump can’t hold his rallies before his adoring moonies. So this will have to do. We have it all wrong here. The country was a trash heap before Trump came along. He made it all better. His response to the coronavirus has been fantastic, the best ever, dwarfs South Korea, people are in awe.

    As Everett Dirksen would have said, if he were still around, “A trillion here, a trillion there, pretty soon you’re talking about real money.”

    The amounts are incomprehensible, the leadership is way beyond awful, and everything is piecemeal with not even a glimmer of a ghost of a coherent plan.

  20. zac

    And the lingering question remains: is all this cash injection inflationary, and if not, why not?

  21. Hugh

    zac, short answer is no. Money coming to us rubes only partially replaces lost demand so not inflationary. I mean there might be spot scarcity in some items but overall, not. All those tens of trillions headed to the rich don’t increase inflation because they are going into the casino/bubble of the stock and financial markets, not into demand. Hope this helps.

  22. There are something like 10^13 stars, Hugh, something like a hundred (100) billion (1,000,000,000) stars (100,000,000,000) here in our little cluster of galaxies. A tenth of a trillion (1,000,000,000,000). We used to think of such numbers as astronomical. Now they’re merely economic.

  23. cripes

    March 25, 2020
    That capitalists are institutionally prepared to profit off catastrophe doesn’t mean the catastrophes (esp. obviously occuring ones, as Italy, Iran, Wuhan and New York have shown) are staged, fake or exaggerated.

    Well, it doesn’t mean they aren’t, duzzit?
    I don’t recall anyone making the claim that profiting from disaster proves they’re staged either.
    I think that’s called motive.
    Logical fail.

  24. Zachary Smith

    I believe it was Congressman Barney Frank who coined the phrase that religious rightwingnuts believe “life begins at conception and ends at birth”. Their recent behavior surely reinforces the idea that’s what they think.

    A pro-lifer shrugs in the face of mass death

    And now, in the form of a pithy opinion column, he offers readers a theologically inflected defense of the Fox News line on the coronavirus: Don’t shut down the country because of a pesky little virus, even if it means a bunch of people die.

    The lives of non-fetus people don’t matter. Not as much as The Economy. And if the graveyards fill up with Dead Boomers, who cares? Not them! Their God cares only about the Unborn. To hell with the living. Need any more evidence?

    Louisiana pastor defies governor, welcomes large gathering into church service
    That Holier Than Thou preacher doesn’t want to miss a single week of collecting “offerings” from the rubes who come to his church. 1,000 x whatever the suicidal devout are putting into the collection plate isn’t chump change! Also, lots of old people leave a big chunk of their wealth to the Church in their wills. From the Louisiana scammer’s point of view, he profits more if a bunch of his geezers actually do fall over dead from Coronavirus.

  25. different clue

    @Zachary Smith,

    If not one single person at that mass religious gathering has contagiable corona to begin with, then the whole bunch of them will say God is Good.

    If one single person did, then heeshee may pass it to others. And so on. In which case the whole bunch of them would say God is testing their Faith. Or God is punishing them for the sins of the Governor in ordering a stop to mass gatherings. Or something like that.

    People from states which have shut-downs or shut-ins and whose citizens all respect them and who observe dropping corona rates on the far side of the curve . . . should keep very careful track of states which don’t likewise do all of these things. If those states don’t drop their corona curves as fast, or even worse, don’t drop their corona curves at all, people from the states that did and do might want to avoid goods, services and people from the states that didn’t and don’t.

    It would appear that Darwin may find some Fields of Fools ripe for the harvest.

  26. different clue


    I think we are seeing an inflation, or even a semi-hyperinflation, in the assets that only the rich can afford. Because all the Magical Monetary Thinking money has been going to the rich people.
    I think the long term OverClass hope is that all this MMT money they keep receiving will be regarded as “worth something” when the next Even Greater Depression lowers real-wealth assets ( land, food, houses, tools, etc.) to almost zero.

    Then the Overclass will have another merry round of buying distressed people and assets at pennies on the franklin with their fire-hoses of MMT money.

  27. Z

    The bill shows the contempt that our rulers have for us. $1200! That’s not even rent for most folks. Our rulers are so unafraid of us. For good reason.

    At least there’s better unemployment and it is expanded.

    The cynical take on the bill is this: the corporate handouts to Wall Street and corporate America were going to be engineered by the Federal Reserve anyway. They are already handing Blackrock trillions of dollars to support Wall Street and would keep pumping until they got what they want. There’s no accountability in that either. So, now it’s just Mnuchin feeding it into corporations in a different way. Woop-de-doo.


  28. Jace

    Cripes, you seem to be arguing that falsifiable = false.

  29. Ten Bears

    Lock them in.

  30. Hugh

    “assets at pennies on the franklin” is kind of a description of deflation.

  31. Astrid

    For a more resilient society, coronavirus itself isn’t a major worry. The problem is that it’s coming in a world order already greatly weakened by neoliberal/globalization world order virus. Coronavirus is acting as an accelerant for neoliberalism disease. And individuals who should be acting white blood cells have already been compromised, so we’re defenseless.

  32. borderdenizen

    Trump will be President until the day he dies.

    The key is that he freed his followers from shame, like the MLK of morons. Without shame, the trumpkins can believe anything they want… orange julius freed them from the shame of not having a Hillary sized education, free from the shame of being obese or poor, free from the shame of having a weird religion. Free from the shame of not knowing how to gather and analyze facts. Free from the shame of being a robot programmed by Fox News. Free at last, free at last.

    The money people need orange julius’ Mob, in both senses of the word! They are counting on their luck to run and I think with money and robots they can make their own luck.

  33. borderdenizen

    More importantly, orange julius freed his followers from the shame of bigotry.

  34. The UK needs another “finest hour”, maybe Dyson will fit the bill:

    “Dyson is building 15,000 ventilators to fight COVID-19” @

    Let’s not forget Yankee ingenuity, either. The smarties at MIT may have outdone themselves, with a gizmo that was said to cost $100 in 2010 dollars:

    “MIT Develops Cheap, Open Source Ventilator for Coronavirus Treatment” @

  35. Trixie

    Deja vu. Also? Hi! 🙂

Powered by WordPress & Theme by Anders Norén