Let's Talk Economics

Posted on 05/09/2020 in misc

Like everybody else, the pandemic is "top of mind" 24 x 7 for me. I'm writing to help myself not internalize all of it. You can find other posts in the series at https://odonnellweb.com/pelican/tag/coronavirus.html

On today’s walk I took a break from the audiobook and listened to three Planet Money podcasts. So let’s talk economics.

In Episode #998 - Journey to the Center of the Fed - they talked about what the Fed has been up to the last six weeks to prop up the economy. The answer is, a lot. More than they have ever done before. In the Great Depression, the Fed stuck to it’s chartered role as a bank for banks. In the 2008 crash they recognized that the financial markets were much bigger than just the banks, thus they bailed out the investment banks, etc. Today, they are in essence, loaning money straight to the business. Not directly, but indirectly by working closely with Congress to in effect guarantee the loans that Congress is making.

In episode #997 - Georgia’s Open Question - they talked at length to a barber in St. Mary’s GA as he worked through the decision-making process to re-open on April 24. He did, primarily because he only got $4000 for a PPE loan (for a business with 4 employees plus himself) and they all have bills to pay. They are doing 2 cuts an hour vs. 4-5 an hour during the before times. I guess if we have government run by people that consider all of us expendable then opening back up is really the only other option. He also said he’ll be tracking the R factor in GA and if spikes up again he will close back down, because if you aren’t part of the solution, you are part of the problem.

In episode #996 - About that Hazard Pay - they talked to a grocery store clerk in NC that makes $9.20 an hour. If she were to get laid off she would get $600/week Federal unemployment plus whatever she got from the state. She could literally double her pay. This is not a criticism of the Federal unemployment bump as keeping people solvent is going to pay dividends as the economy opens back up and people have money to resume spending. It’s a criticism of the lack of a reasonable minimum wage law in the country. At a minimum, pun totally intended, anybody considered essential during the crisis should be getting $15/hour.

In other news, we did Captain D’s takeout tonight. I haven’t had it in years. They do know how to make a hush puppy. Seriously, I could get a dozen hush puppies from there and call it a meal. We passed the evening with board games, where I won possibly the worst game of scrabble ever. I spent the entire game staring at 7 tiles that were all consonants, and Breck and Michelle had the opposite issue. In the second game Breck destroyed us in Rummicub.