Back in October, the Fed already knew there was a liquidity problem. This is why in September, the Fed began a new round of quantitative easing to essentially bail out the repo markets.
The jobless claims figures of the past two weeks have been unprecedented and alarming. However, knowing that the data will continue to be concerning, we need to analyze how quickly the economy can can heal and go back to the previous path of record job creation.
It’s no exaggeration to say that most of the blame for the world’s poor response to the coronavirus pandemic can be laid squarely at the feet of politicians and bureaucrats.
The stadium naming curse is well known. Enron Field, Adelphia Coliseum, and MCI Center are just a few examples of bankruptcy following a company’s name adorning its home team’s stadium or arena. Financial trouble typically comes after the name is attached and the team plays some games.
The imposition of lockdowns to counter the spread of the infection from the coronavirus is likely to severely damage the real economy. As a result of these lockdowns, economies have ground to a total halt. The production of goods and services has stopped while at the same time the enhancement and improvement of productive infrastructure has been terminated.
Does it make much sense to counter the damage caused by the virus by stopping the economy? It is akin to trying to fix a headache by chopping one’s head off.
When in search of an example of libertarianism or so-called right-wing anarchism, many antistatists are quick to reference practical plans based on systems we already have, such voluntary insurance companies or security firms’ replacement of the role of the state. But this usually doesn’t satisfy the the other side. They want a historical, material example of anarchism or radical libertarianism in practice in a specific place and time. It can be hard to name a place like that. Most “anarchist” polities have been coercive, such as the Paris Commune.
In medieval Europe, taxes raised by kings were seen as something exceptional, and even borderline criminal.
If history has taught us anything, it’s that a crisis is the lifeblood of state growth. The coronavirus saga offers a treasure trove of power grabs that elected officials are seeking to ram through while Americans must make significant readjustments in their daily lives due to state-imposed shutdowns around the nation.
As COVID-19 prompts a reevaluation of institutions and standard methods of operating the world over, an opportunity exists to reorient our economic thinking so that it more closely corresponds to the realities of the modern economic landscape. It starts with abandoning GDP.
