The Stunning Brutality of This Economic Crisis

The Stunning Brutality of This Economic Crisis

Dow Jones Industrial Average

Dow Jones Industrial Average

Global economic meltdown in warp speed. That’s what the past couple of weeks has been like. I first wrote about the coronavirus threatening the global economy on February 12. Then, it was still concentrated in China. A month later and we’re seriously talking about trillions (with a T) in economic stimulus and an unemployment rate that could skyrocket to 20% in the U.S., with several countries around the world in worse shape. It seems unreal. Frighteningly, it’s just beginning. (Treasury secretary Mnuchin now says a possible 20% unemployment rate was just “a mathematical statement.” You have to agree. It is definitely a mathematical statement and not beyond imagining, given the current scenario).

We’ll follow this closely at Finsquared, mainly because there really is no other news. Clients will have to hew to the new media world order. You need to be reacting to the news that’s obsessing us or you won’t be included in the conversation. We have to dig in to this story.

A quick scan of some of the journalists and financial experts I admire most tells me what we’re a a world of hurt. Let’s start with Neil Irwin, senior economics correspondent for The New York Times. He paints a bleak picture of deep pain for all of us for an unknown period of time in his 3/17 article One Simple Idea That Explains Why the Economy Is in Great Danger :

What is so deeply worrying about the potential economic ripple effects of the virus is that it requires this perpetual motion machine to come to a near-complete stop across large chunks of the economy, for an indeterminate period of time.

No modern economy has experienced anything quite like this. We simply don’t know how the economic machine will respond to the damage that is starting to occur, nor how hard or easy it will be to turn it back on again.

Most agree with Neil Irwin’s perspective, and try to offer prescriptions for our predicament. Andrew Ross-Sorkin at the Times goes big, BIG, really BIG. He issues a economic stimulus call-to-arms that includes Trillions in stimulus to gig workers, small businesses, and others. He advocates getting the banks involved (really?). You can read his edict here. The headline suggests that HE has the answer. Maybe Treasury Secretary Mnuchin is listening with the ever escalating piles of cash the feds are looking to dole out. This Is the Only Way to End the Coronavirus Financial Panic says Andrew Ross-Sorkin in the Times.

I could go on but they’re all missing the point, according to Jesse Colombo, who I have been avidly following for a couple of years. I’ll let his Tweets speak for themselves.

 

 

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Mark Rose
mark@finsquared.com

Founder Finsquared, PR outside the box. Helping companies of all sizes thrive through PR, content marketing, social, digital, growth strategies. Bi-coastal. Seattle/NY.