Article 43
Monday, May 04, 2020
The Next Depression Part 57 - The Great Lockdown
“Great Lockdown” to rival Great Depression with 3% hit to global economy, says IMF
By Larry Elliott
The Guardian
April 14, 2020
The International Monetary Fund has slashed its forecasts for global growth in response to the COVID-19 pandemic and warned of a slump in output this year unparalleled since the Great Depression of the 1930s.
In its half-yearly forecasts, the IMF SAID “ the Great Lockdown” would cause a dramatic drop in activity that would be far more painful than the recession that followed the banking meltdown of the late 2000s.
The IMF said the sudden shock caused by the spread of the coronavirus meant it had been forced to tear up AN ESTIMATE IT MADE JUT THREE MONTHS AGO of 3.3% global growth this year and replace it with an expected contraction of 3%.
Until now the downturn that followed the near meltdown of the global financial system in late 2008 has been the most serious of the postwar era, with global activity shrinking by 0.1% in 2009
Bigger output losses have now been pencilled in for 2020, concentrated in the rich economies of the west, which are forecast to shrink by 6.1% on average. Italy and Spain - the two worst-affected European economies from Covid-19 so far - will see GDP falls of 9.1% and 8%, respectively, the IMF said in its world economic outlook. Britains drop in output is put at 6.5%.
Of the big emerging economies, China’s growth rate is expected to fall from 6.1% last year to 1.2% in 2020 its lowest in decades. India is on course to expand by 1.9%, down from 4.2%.
Adjusted to take account of population changes, the IMF’s forecasts were even gloomier. Gross domestic product (GDP) per head - one measure of living standards - is expected to fall globally by 4.2% in 2020, by 6.5% in advanced countries, and by 7% in the UK.
Gita Gopinath, the IMF’s economic counsellor, said the size of the hit to the global economy, uncertainty about the how long the shock would last, and the need to discourage economic activity to contain the virus had to led to a crisis “like no other.”
She added:"It is very likely that this year the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago. “The Great Lockdownӑ” as one might call it, is projected to shrink global growth dramatically.
The IMF is predicting a partial recovery in 2021, when it is estimating that growth will recover to 5.6%, but Gopinath said the level of GDP would remain below the pre-virus trend, with considerable uncertainty about the strength of the rebound.
She warned: “Much worse growth outcomes are possible and maybe even likely.”
The IMF’s World Economic Outlook (WEO) is assuming that economic disruptions are concentrated mostly in the second quarter of 2020 for almost all countries except China (where the impact was most intense in the first quarter). The time taken for production to be scaled back up means the sharp plunge in output will be followed by only a gradual recovery.
The IMF said its forecasts were highly uncertain and that the risks were that the economic cost of the pandemic would be worse than currently envisaged. Recovery relied on stimulus measures being effective in preventing widespread company bankruptcies, limiting job losses, and easing financial strains.
The WEO modelled three alternative scenarios: a 2020 lockdown lasting 50% longer than it is forecasting; a mild recurrence of the virus in 2021; and a protracted pandemic and longer containment effort in 2020, as well as a recurrence in 2021.
In the worst case, the global economy would shrink by around 11% rather than 3%.
Gopinath said: “The economic landscape will be altered significantly for the duration of the crisis and possibly longer, with greater involvement of government and central banks in the economy.”
“At a time when Italy and Spain have started to lift their lockdown restrictions,” Gopinath said: “There are many reasons for optimism, despite the dire circumstances. In countries with major outbreaks, the number of new cases has come down, after strong social distancing practices were put in place. The unprecedented pace of work on treatments and vaccines also promises hope. The swift and substantial economic policy actions taken in many countries will help shield people and firms, preventing even more severe economic pain and create the conditions for the recovery.”
Although the effects of the pandemic have been more severe so far in developed countries, the IMF said they were better equipped to cope. It added that many emerging and developing economies faced a multilayered crisis comprising a health shock, domestic disruptions, plummeting external demand, capital flight, and collapsing commodity prices.
Section Dying America • Section Next Recession, Next Depression •
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Sunday, May 03, 2020
Political SPAM
As I write this post - the CORONAVIRUS is sweeping the planet - killing people and crippling economies, while entire populations are forced to stay locked in their homes, with no paychecks coming in.
A stimulus was passed, but - like the 2008 bailout - gives billions of dollars to bankers and businessmen, and not much to everyone else - and nothing to the LONG-TERM UNEMPLOYED/UNDEREMPLOYED and millions of other starving Americans.
But that’s a topic for another post.
Here in the Unites States, the overarching goal of our society’s ruling class is PROFITS OVER PEOPLE.
Trump believes rich people should be able to recoup their flagging riches while “low risk” workers, a term that is being bandied about by anxious capitalists worrying about their portfolios, are encouraged or ordered to go back to work to produce the necessary surpluses. What these capitalists really mean isn’t low risk workers, they mean expendable people. The frightening thing is that the ruling class, or at least a large part of it, probably generally supports getting the greatest economy in history up and running as soon as possible. Rationalize it like the author in National Review: cost-benefit analysis. How many deaths compared to how much money? They cant think any other way, and they can’t understand those of us who see these things differently: that perhaps an old geezer who no longer produces surplus value still has a right to live his or her life out in comfort and safety, or young people shouldn’t be thrown to the wolves just because rich people are betting enough of them will not get sick before they generate some profits for the bosses This is a very cynical society.”
I guess it’s NO SURPRISE.
“Once again the CDC is putting profits over people with its latest recommendations that downgrade worker protections at a time when they are needed most,” said Richard Trumka, president of the AFL-CIO.
Back to my reason for writing this post.
I guess this is no surprise either - Letters like this from well-known politicians and the DEMOCRATIC CONGRESSIONAL CAMPAIGN COMMITTEE spam me every day:
Adam Schiff emailed.
John Kerry emailed.
Andrew Yang emailed.
Amy Klobuchar emailed.
We emailed—too many times to count!
Now were emailing you again because we urgently need your $ before our End of Month Deadline.We won’t sugarcoat this: Failing to hit our goal is not just a setback—it could completely DEVASTATE our chances of protecting our Majority.
From your health care, to our voting rights, to the future of our planet—everything our Democratic Majority has fought for is on the line.
That’s why hitting our End of Month goal is so important!
Even with no job, and no money - the indifference of our ruling class - and so called GRASS ROOTS MOVEMENTS exposes itself more and more every day.
Asking the people at the DNCC politely, and not so politely, to stop bugging me for donations - results in more letters like above..
So, like I did with emails from President Obama and Vice President Biden EIGHT YEARS AGO - the DNCC will be manually added to all my spam lists.
The majority that needs protecting are “we the people” not the 1% who somehow manage to stay on top.
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