Latest / Stephanomics / Governments Try to Spend Their Way Out of Coronavirus Shock

Transcript

Governments Try to Spend Their Way Out of Coronavirus Shock · Stephanomics

• 0:01
  Speaker 1: Hello, and welcome to Stephanomics, the podcast that brings the
• 0:05
  Speaker 1: global economy to you. Governments have spent a lot of
• 0:15
  Speaker 1: money in the past few weeks. In the US alone,
• 0:18
  Speaker 1: the headline number is well over two trillion dollars in
• 0:22
  Speaker 1: a country that we already thought was spending well beyond
• 0:24
  Speaker 1: its means. In a minute, I'll be talking to the
• 0:27
  Speaker 1: economist Stephanie Kelton, an advisor to Bernie Sanders, among others,
• 0:32
  Speaker 1: about whether COVID nineteen has turned President Trump into a
• 0:36
  Speaker 1: modern monetary theorist. Keep listening to find out what that means.
• 0:40
  Speaker 1: But first I welcome back to Stephanomics our chief economist,
• 0:42
  Speaker 1: Tom Orlick for a few words on the scale of
• 0:45
  Speaker 1: those stimulus programs. Tom, I did talk a little about
• 0:52
  Speaker 1: this last week with the American economist Adam Posen, But
• 0:56
  Speaker 1: give us a sense of the numbers that we're talking about.
• 1:01
  Speaker 1: When we look at the governments of G twenty economies,
• 1:04
  Speaker 1: their response to the virus, and you know what kind
• 1:07
  Speaker 1: of superlative adjectives should we be using to describe them.
• 1:11
  Speaker 1: There's a lot of money going into the system, Stephanie.
• 1:14
  Speaker 1: When we look at monetary policy, the Federal Reserve has
• 1:18
  Speaker 1: followed the ECB in the Bank of Japan down to
• 1:21
  Speaker 1: the zero lower bound. Central banks around the world are
• 1:25
  Speaker 1: pumping huge amounts of additional funds into the system through
• 1:28
  Speaker 1: asset purchases. That's important for financial stability. But the critical
• 1:33
  Speaker 1: thing to compensate businesses and households for the income they're
• 1:38
  Speaker 1: losing during the lockdown and hopefully prepare the ground for
• 1:42
  Speaker 1: recovery once the outbreak is under control. In the second
• 1:45
  Speaker 1: half is what's happening with fiscal policy. Normally, fiscal policies
• 1:50
  Speaker 1: pretty slow. Political conflict, debt levels, they all stop fiscal
• 1:55
  Speaker 1: policy reacting quickly. This time around, governments really seem to
• 1:59
  Speaker 1: have got their acts together pretty quickly, and we're looking
• 2:02
  Speaker 1: at huge sums going in. We added it up across
• 2:06
  Speaker 1: the G twenty and it came to about one point
• 2:08
  Speaker 1: eight trillion dollars in fiscal stimulus, a lot of money.
• 2:13
  Speaker 1: You say that it's unusual because of the pace. I
• 2:15
  Speaker 1: guess it is true that it often takes a while
• 2:17
  Speaker 1: to pass fiscal programs, but the complaint in the past
• 2:20
  Speaker 1: has often been that you pass the program and then
• 2:23
  Speaker 1: it may take a year, even two years sometimes for
• 2:26
  Speaker 1: these stimulus programs to actually be affecting things on the ground.
• 2:31
  Speaker 1: How how much can we judge that now? Looking at
• 2:33
  Speaker 1: these programs, why are they more likely to get into
• 2:36
  Speaker 1: the economy in this very short period that they're actually needed. Yeah,
• 2:40
  Speaker 1: I really think that detail and precision in a sense
• 2:45
  Speaker 1: is the enemy. And what has to happen for these
• 2:48
  Speaker 1: two be effective is just a lot of money to
• 2:51
  Speaker 1: hit roughly the right parts of the economy really quickly.
• 2:55
  Speaker 1: And so the concern has to be Yes, the headline
• 2:58
  Speaker 1: amounts are eye popping, but is that all new money
• 3:03
  Speaker 1: and is it getting to the people who need it
• 3:06
  Speaker 1: quickly enough? And of course here in the United States,
• 3:09
  Speaker 1: we're already hearing small businesses saying I put my application in,
• 3:14
  Speaker 1: I haven't heard back from the bank, I haven't heard
• 3:16
  Speaker 1: back from the Small Business Administration. If it's a one
• 3:19
  Speaker 1: week delay, a two week delay, fine, I think businesses
• 3:23
  Speaker 1: are going to have the reserves to get through that.
• 3:25
  Speaker 1: If we're looking at two three months before the money
• 3:28
  Speaker 1: starts getting into people's bank accounts, then we're going to
• 3:31
  Speaker 1: start seeing lots of bankruptcies and that's going to make
• 3:33
  Speaker 1: the recovery much harder, even when the outbreak is under control.
• 3:38
  Speaker 1: Is the speed is so much more important in this
• 3:40
  Speaker 1: case because the extent of the decline has been so
• 3:44
  Speaker 1: rapid if and it's so serious for so many companies.
• 3:48
  Speaker 1: You know, if you think of a the worst recession
• 3:50
  Speaker 1: a company might have seen, they might have seen demand
• 3:53
  Speaker 1: for by twenty or thirty percent, But in many cases
• 3:56
  Speaker 1: we're looking at falls in demand because governments have shut
• 4:02
  Speaker 1: down those parts of the economy. Do you think that
• 4:05
  Speaker 1: has have affected their very unusual nature of this where
• 4:08
  Speaker 1: governments are in effect doing this on purpose. Has that
• 4:11
  Speaker 1: affected the amount of political debate around these stimulutism and
• 4:16
  Speaker 1: it is surprising how broad the agreement has been on
• 4:20
  Speaker 1: this kind of scale of support. I think there's a
• 4:23
  Speaker 1: degree of political self interest at work here, Stephanie. And
• 4:26
  Speaker 1: if we think about the kind of the main advocates
• 4:29
  Speaker 1: of austerity, the main sort of advocates of fiscal conservatism,
• 4:33
  Speaker 1: it's the Republicans in the United States, it's the Conservative
• 4:37
  Speaker 1: Party in the United Kingdom, and they're in power right now,
• 4:41
  Speaker 1: so it's absolutely in their interest to forget about those
• 4:44
  Speaker 1: principles and just pump as much money into the system
• 4:47
  Speaker 1: as they can. At the same time, I think you're right,
• 4:51
  Speaker 1: it's the it's the nature of the shock which has
• 4:55
  Speaker 1: changed the debate about fiscal stimulus. If we go all
• 4:59
  Speaker 1: the way back to the Great Depression in there's that
• 5:03
  Speaker 1: famous quote from the Treasury Secretary Andrew Mellon Liquidate labor,
• 5:08
  Speaker 1: liquidate stocks, liquidate farmers, liquidate real estate, purge the rottenness
• 5:13
  Speaker 1: from the system. That was what Melon advised Hoover, who
• 5:17
  Speaker 1: at the time was the kind of the hapless president
• 5:20
  Speaker 1: trying to deal with the biggest economic shock in in memory.
• 5:26
  Speaker 1: Um and that sort of philosophical view that recessions are
• 5:29
  Speaker 1: in a sense a good thing because they cleanse rottenness
• 5:33
  Speaker 1: from the system and prepare the economy for growth. That
• 5:37
  Speaker 1: view has really lived on and there's an element of
• 5:40
  Speaker 1: truth in it. In the Great Financial Crisis, in the
• 5:43
  Speaker 1: European sovereign debt crisis, there was some rottenness in the system,
• 5:48
  Speaker 1: and so they're needed to be some bankruptcies in order
• 5:52
  Speaker 1: for the growth to restart. This time around, that's really
• 5:55
  Speaker 1: not the case. This is a pure exogenous shock. This
• 5:59
  Speaker 1: is a virus that has hit an economy which is
• 6:01
  Speaker 1: otherwise functioning. Okay. So the idea that the recession is
• 6:05
  Speaker 1: in some sense going to be cleansing just really doesn't apply.
• 6:09
  Speaker 1: And I think that's one of the reasons why we've
• 6:12
  Speaker 1: seen political parties and politicians that in the past have
• 6:16
  Speaker 1: been viscerally opposed to any sense of fiscal stimulus and
• 6:21
  Speaker 1: now embracing it. I guess the final question I would
• 6:24
  Speaker 1: have for you is we had We've debated I think
• 6:26
  Speaker 1: previously on Stephanomics, and it's certainly been a big conversation
• 6:30
  Speaker 1: point over the last few years, this idea that policymakers
• 6:33
  Speaker 1: wouldn't have room to respond to the next crisis, the
• 6:37
  Speaker 1: next downturn. You know that monetary policy was kind of
• 6:40
  Speaker 1: maxed out or almost maxed out. You know, interest rates
• 6:42
  Speaker 1: incredibly low, central bank balance sheets already very expanded following
• 6:47
  Speaker 1: the printing of money over the last few years. Um
• 6:52
  Speaker 1: and you know, in the case of the U S
• 6:53
  Speaker 1: a budget deficit was already quite high. I mean, we'll
• 6:57
  Speaker 1: be just wrong when we said that, how have they
• 6:59
  Speaker 1: come up with all this money? And why does it
• 7:00
  Speaker 1: not seem to matter? If we look at the economic textbooks,
• 7:04
  Speaker 1: there are some extremely powerful arguments against what's what's happening
• 7:09
  Speaker 1: right now. If we have central banks printing money to
• 7:14
  Speaker 1: stabilize borrowing costs to enable governments to run very, very
• 7:20
  Speaker 1: large fiscal deficits. Then in the medium term, in the
• 7:25
  Speaker 1: long term, that's not going to be sustainable. The market
• 7:28
  Speaker 1: is going to start worrying about inflation, and central banks,
• 7:33
  Speaker 1: no matter how much money they print, are just not
• 7:35
  Speaker 1: going to be able to keep bond yields under control.
• 7:39
  Speaker 1: In the situation right now, those textbook concerns in the
• 7:44
  Speaker 1: extremity of the moment are being disregarded. That's absolutely the
• 7:48
  Speaker 1: right thing to do. We need an extraordinary fiscal response.
• 7:51
  Speaker 1: We need central banks to be playing that supportive role.
• 7:55
  Speaker 1: If the eyebreak doesn't come under control quickly, if this
• 7:58
  Speaker 1: is still the situation in six months time, I think
• 8:01
  Speaker 1: we're going to see some really serious questions about whether
• 8:04
  Speaker 1: this policy response is actually sustainable. And I'm sure we'll
• 8:09
  Speaker 1: have more conversations about this in other aspects of the virus,
• 8:12
  Speaker 1: and maybe talk more on another occasion about all the
• 8:15
  Speaker 1: great research that your economists are doing. But for meantime,
• 8:18
  Speaker 1: thanks very much, Tom Morlly, Thanks Stephanie. So I'm very
• 8:27
  Speaker 1: glad to be joined by Stephanie Kelton, who's an American
• 8:31
  Speaker 1: economist currently a professor at Stony Brook University, but also
• 8:34
  Speaker 1: a frequent contributor to The New York Times and econumnist
• 8:38
  Speaker 1: for for Bloomberg. She also has been an adviser to
• 8:41
  Speaker 1: to Bernie Sanders, including in his TWI presidential campaign. Stephanie,
• 8:47
  Speaker 1: what do you think of the policy response to the
• 8:50
  Speaker 1: virus so far? I I read something of yours that
• 8:53
  Speaker 1: was written before Congress past that massive stimulus package have
• 9:00
  Speaker 1: have gone further than you might initially have expected. I
• 9:03
  Speaker 1: don't think so. I mean, I know, you know, they
• 9:06
  Speaker 1: moved in rapid succession with a series of bills. The
• 9:10
  Speaker 1: first one was very small eight point three billion, followed
• 9:14
  Speaker 1: by another piece of legislation a little over a hundred
• 9:18
  Speaker 1: billion dollars, and then the most recent one with what's
• 9:22
  Speaker 1: being called Phase three, which was two point to trillion dollars.
• 9:26
  Speaker 1: So you know, these sound like very big numbers, and
• 9:28
  Speaker 1: of course their orders of magnitude larger than what we
• 9:32
  Speaker 1: did in the wake of the financial crisis and heading
• 9:35
  Speaker 1: into the Great Recession, so by comparison, they seem quite substantial.
• 9:42
  Speaker 1: I don't think I've been surprised, So I think there's
• 9:44
  Speaker 1: just a greater appreciation now for just what we're up
• 9:49
  Speaker 1: against and that Congress came through with something that was substantial.
• 9:55
  Speaker 1: But already, of course they're talking about the need to
• 9:58
  Speaker 1: do more. And how do you think we US compares
• 10:01
  Speaker 1: with with other countries in terms of the scale of
• 10:03
  Speaker 1: their response. But I guess I'm thinking particularly about how
• 10:07
  Speaker 1: it's been an allocated what bits of the economy are
• 10:10
  Speaker 1: getting the most help. Well, that's exactly right. I think
• 10:14
  Speaker 1: that you know, I'm doing my best to try to
• 10:16
  Speaker 1: pay attention to the policy response and other corners of
• 10:20
  Speaker 1: the globe. And from what I can tell, what we
• 10:24
  Speaker 1: have done that I think was critically important was trying
• 10:28
  Speaker 1: to keep workers attached to their jobs, that is, to
• 10:31
  Speaker 1: keep them on payroll, to keep them employed even as
• 10:35
  Speaker 1: we require them to stay out of the workplace. So
• 10:39
  Speaker 1: that's part of what we've attempted to do with the
• 10:41
  Speaker 1: payroll protection program, the lending to small businesses. The problem
• 10:46
  Speaker 1: is that the rollout has been let's say, spotty, and
• 10:51
  Speaker 1: the help isn't getting there quickly enough millions and millions
• 10:54
  Speaker 1: of people. We've already seen ten million workers lose jobs
• 10:58
  Speaker 1: just in the last couple of weeks. And so I
• 11:00
  Speaker 1: look at what some European countries appear to be doing
• 11:04
  Speaker 1: more successfully in terms of keeping workers on payroll attached
• 11:09
  Speaker 1: to their employers, getting money into their hands more quickly,
• 11:13
  Speaker 1: even just north of the border here in Canada. You know,
• 11:16
  Speaker 1: when people are being laid off, they're able to call
• 11:19
  Speaker 1: a toll free number and within a matter of days
• 11:23
  Speaker 1: they're getting the money in their hands. And we're just
• 11:25
  Speaker 1: not We're not so good at speed right now, and
• 11:29
  Speaker 1: unfortunately speed is critically important, of course, but that's one
• 11:33
  Speaker 1: of the things that we're obviously trying to track, not
• 11:35
  Speaker 1: just the economist but the reporters at Bloomberg. You know,
• 11:38
  Speaker 1: there's a lot of these programs, particularly European ones, sound
• 11:42
  Speaker 1: fantastic in terms of what they're trying to do, but
• 11:45
  Speaker 1: then obviously it's going to be crucial as they get
• 11:47
  Speaker 1: up and running, and sometimes there's a big been a
• 11:49
  Speaker 1: delay in getting them up and running to see whether
• 11:52
  Speaker 1: people are actually getting the support they need. You've had
• 11:56
  Speaker 1: some spirited debate over the last few years with the
• 11:59
  Speaker 1: likes of Quigment on Modern monetary theory m m T,
• 12:03
  Speaker 1: which was being talked about a lot one or two
• 12:06
  Speaker 1: years ago. Some people have said to me, oh, we've
• 12:09
  Speaker 1: ended up with that. The virus is actually giving us
• 12:12
  Speaker 1: MMT by the back door. This is enormous running up
• 12:16
  Speaker 1: of of of deficits. Remind us what how you would
• 12:21
  Speaker 1: understand modern monetary theory and then say whether whether that's right,
• 12:24
  Speaker 1: whether we have gone quite a lot closer to m
• 12:26
  Speaker 1: empty with this response. Well, remember that MMT is has
• 12:32
  Speaker 1: always been, now for more than twenty years, a descriptive project,
• 12:36
  Speaker 1: and so what we've been trying to do is describe
• 12:39
  Speaker 1: the monetary operations, the system that we have in place,
• 12:42
  Speaker 1: how it works, what it means to have governments that
• 12:46
  Speaker 1: issue non convertible fiat currencies. That is, we're not on
• 12:50
  Speaker 1: a gold standard, we don't have a fixed exchange rate regime.
• 12:53
  Speaker 1: Certain countries are issuers of what we could call a
• 12:56
  Speaker 1: sovereign currency, and as a result, there is more policy
• 13:00
  Speaker 1: space available two countries like that then they typically take
• 13:05
  Speaker 1: advantage of. So one of the lessons of MMT has
• 13:08
  Speaker 1: been that in a country like the US, like the UK,
• 13:11
  Speaker 1: like Japan, like Canada, like Australia, and other sovereign currency
• 13:16
  Speaker 1: issuing governments, that countries have actually been living below their means.
• 13:22
  Speaker 1: I mean, we hear time and time again that deficits
• 13:24
  Speaker 1: are evidence that governments are living beyond their means, and
• 13:28
  Speaker 1: m m T has said, no, hang on, that's not correct.
• 13:31
  Speaker 1: Most of the time we run our economies below their
• 13:34
  Speaker 1: full potential, below their full employment capacity. In other words,
• 13:38
  Speaker 1: there's low hanging fruit. There is space for fiscal policy
• 13:41
  Speaker 1: to do more to push economies to something closer to
• 13:46
  Speaker 1: an approximation of full employment. And so what we're seeing
• 13:50
  Speaker 1: now is, you know, the complete falling away of the
• 13:55
  Speaker 1: preoccupation with deficits and debt, with the idea that the
• 13:58
  Speaker 1: deficits that we've run in the past and the national
• 14:01
  Speaker 1: debt that exists going into a crisis somehow constrain or
• 14:05
  Speaker 1: hamstring governments and prevent them from exercising the power of
• 14:10
  Speaker 1: the fiscal purse, if you like, in times of crises.
• 14:13
  Speaker 1: And so MMT was always out there saying where others
• 14:17
  Speaker 1: were warning that because of things like the Republican tax
• 14:20
  Speaker 1: cuts which passed in December of two thousand seventeen, there
• 14:23
  Speaker 1: were plenty of economists at the time who argued that
• 14:27
  Speaker 1: passing those tax cuts was going to leave us with
• 14:30
  Speaker 1: budget deficits and a national debt that would prevent us
• 14:34
  Speaker 1: from taking action in the future in the face of
• 14:37
  Speaker 1: a crisis, and I and other MMT economists said that
• 14:41
  Speaker 1: isn't the case if the next downturn comes. When the
• 14:44
  Speaker 1: next downturn comes, Congress will have all of the fiscal
• 14:48
  Speaker 1: power it needs to combat the downturn in spite of
• 14:52
  Speaker 1: the deficits that we have run in the past. Do
• 15:00
  Speaker 1: you think that President Trumps coming round to an MMT
• 15:04
  Speaker 1: view of the world. I mean, if you think about
• 15:07
  Speaker 1: his his business career, one has the impression that he
• 15:09
  Speaker 1: hasn't always felt that budget constraints were going to be
• 15:13
  Speaker 1: particularly binding on him in various ways. Um, you know,
• 15:17
  Speaker 1: if we see this massive response and it doesn't seem
• 15:20
  Speaker 1: to cause big problems for the economy, and it does
• 15:24
  Speaker 1: seem to be easily repaid and the markets don't mind,
• 15:29
  Speaker 1: do you think if it does seem doable, that he's
• 15:31
  Speaker 1: going to come around to it and maybe it'll be
• 15:34
  Speaker 1: the way of the future. I feel reasonably confident that
• 15:39
  Speaker 1: he is going to be willing to go back to
• 15:40
  Speaker 1: Congress again and again and again and do as much
• 15:44
  Speaker 1: as necessary. You know, I heard him on television the
• 15:47
  Speaker 1: other day and it didn't seem like a scripted comment,
• 15:51
  Speaker 1: but he did say that the federal government is prepared
• 15:54
  Speaker 1: to spend whatever it takes. These are the words he used,
• 15:57
  Speaker 1: because he said it's our money, it's our currency, and
• 16:01
  Speaker 1: that I've never heard from a president not my lifetime.
• 16:05
  Speaker 1: And so I think there is something to what you're
• 16:07
  Speaker 1: saying in terms of his ability to sort of connect
• 16:10
  Speaker 1: the dots between the nature of our monetary system and
• 16:14
  Speaker 1: why that affords the government the capacity to step up
• 16:19
  Speaker 1: and spend again and again and again and to replace
• 16:22
  Speaker 1: that last demand until the economy is recovering. I think
• 16:27
  Speaker 1: that's a it's a great way of looking at it.
• 16:30
  Speaker 1: I think I guess the final question I would have,
• 16:32
  Speaker 1: And again it harks back to some of the things
• 16:34
  Speaker 1: that people said in response to the last crisis and
• 16:38
  Speaker 1: the quantitative easing and the money printing that happened. Then
• 16:41
  Speaker 1: you know, of course people then warned of inflation as
• 16:44
  Speaker 1: a result of or pumping all this money into the economy.
• 16:46
  Speaker 1: There's been no risk of that over the last few years.
• 16:49
  Speaker 1: I just wonder whether you see any possibility as we
• 16:52
  Speaker 1: come out of this if we do get quite a
• 16:55
  Speaker 1: steep recovery, whenever it is maybe later than we want
• 16:59
  Speaker 1: uh and have had their incomes maintained, but in a
• 17:04
  Speaker 1: good chunk of that disposable income that they have they've
• 17:06
  Speaker 1: not been able to spend. Do you think there is
• 17:09
  Speaker 1: a risk at that point that you could have at
• 17:11
  Speaker 1: least some inflationary consequences from this stimulus, just because of
• 17:16
  Speaker 1: the nature of the fact that a lot of people
• 17:18
  Speaker 1: have been unable to spend as much as they normally would.
• 17:21
  Speaker 1: You know, it's it's an interesting question, and I don't
• 17:25
  Speaker 1: know that I have very strong feelings. I think it's
• 17:28
  Speaker 1: it is a potential risk, but I would highly discount it.
• 17:32
  Speaker 1: And here's why. I think for a couple of reasons.
• 17:34
  Speaker 1: One is that when we so called turn the economy
• 17:37
  Speaker 1: back on, we're not just going to flip a switch
• 17:39
  Speaker 1: and everyone is going to immediately feel comfortable going back
• 17:43
  Speaker 1: out into the shopping malls, into restaurants, into the movie theater.
• 17:46
  Speaker 1: It's going to take time before we even if we've
• 17:50
  Speaker 1: got a stockpile of of cash that we've been able
• 17:53
  Speaker 1: to you know, the disposable income that hasn't gone to
• 17:55
  Speaker 1: servicing debt, we've got some some purchasing power pent up,
• 18:00
  Speaker 1: We're not prepared, I think, in mass, to go out
• 18:02
  Speaker 1: and just wildly spend. And so that's one thing that
• 18:06
  Speaker 1: I would think about. The other thing is quee itself. Remember,
• 18:10
  Speaker 1: qui queie is not a risk. Quee is not pushing
• 18:14
  Speaker 1: money into the economy, per se QUEI is pushing money
• 18:18
  Speaker 1: into the banking system. So it's more about um adding
• 18:22
  Speaker 1: reserves to the banking system where they remain trapped until
• 18:26
  Speaker 1: they're taken out either by the Fed or by Treasury.
• 18:28
  Speaker 1: So I just don't see as much potential inflation risk.
• 18:32
  Speaker 1: If we destroy productive capacity and we allow factories to
• 18:37
  Speaker 1: shutter and businesses to shutter, then we're at greater risk,
• 18:40
  Speaker 1: right because we're not going to be able to step
• 18:42
  Speaker 1: up with the supply and the production to meet higher demand.
• 18:46
  Speaker 1: On the other side of all of this, Stephanie Calton,
• 18:48
  Speaker 1: thank you very much. Thank you so much for having me. Finally,
• 18:59
  Speaker 1: I just wanted to check in with Sean Donnan, our
• 19:01
  Speaker 1: senior trade and globalization reporter here at Bloomberg, to see
• 19:05
  Speaker 1: how his life has changed since we last spoke on
• 19:08
  Speaker 1: this program at the start of the year. Sean, the
• 19:11
  Speaker 1: biggest threat to global supply chains for the past two
• 19:13
  Speaker 1: months hasn't been trade wars that we talked about so
• 19:17
  Speaker 1: much last year, but the much more immediate problem of
• 19:20
  Speaker 1: closed down factories in China and closed ports. You've been
• 19:25
  Speaker 1: looking at that in the last few weeks, but I
• 19:28
  Speaker 1: see you've also been zeroing in on much more basic
• 19:31
  Speaker 1: food supply concerns for low income Americans who've been losing
• 19:35
  Speaker 1: their jobs in the last few weeks. So I'm interested
• 19:37
  Speaker 1: tell us a little bit about how the past few
• 19:39
  Speaker 1: weeks have been for you as a reporter, and how
• 19:43
  Speaker 1: have you found yourself moving from those big macro topics
• 19:46
  Speaker 1: to those micro stories that are maybe hitting a little
• 19:50
  Speaker 1: closer to home. Yeah. I think what's really amazing is
• 19:56
  Speaker 1: that we've seen something that we we haven't we hadn't
• 19:59
  Speaker 1: even contemplated last year during the trade wars, and that
• 20:03
  Speaker 1: is that effectively governments would switch off economies. And we've
• 20:08
  Speaker 1: seen that go in a wave through the global economy. Right, So,
• 20:13
  Speaker 1: we saw other parts of Asia get hit, South Korea, Japan,
• 20:18
  Speaker 1: places like Vietnam. Then we've seen uh it come to
• 20:21
  Speaker 1: Europe Italy, which we've discovered actually has a pretty uh
• 20:25
  Speaker 1: important role even in some manufacturing supply chains, UH go
• 20:30
  Speaker 1: into lockdown Germany, the UK, and here in the US
• 20:36
  Speaker 1: as well. Increasingly, I've been finding um that the real
• 20:40
  Speaker 1: hole in in. I think the story is just a
• 20:47
  Speaker 1: documenting of of the micro damage in economies. We write
• 20:52
  Speaker 1: a lot about forecasts from economists of a recession that
• 20:58
  Speaker 1: will be the deepest in generations, we don't often quantify
• 21:03
  Speaker 1: what that means for for people on the ground. And
• 21:05
  Speaker 1: so I've tried to switch my focus in the last
• 21:11
  Speaker 1: few weeks from that kind of lofty debate about globalization,
• 21:14
  Speaker 1: which I think will be there six months from now
• 21:17
  Speaker 1: when we come out of this this crisis, if that's
• 21:19
  Speaker 1: when we come out of it um and really focus
• 21:22
  Speaker 1: on what is happening now, And it's kind of the
• 21:23
  Speaker 1: urgency of now, which is the economic damage that's happening.
• 21:28
  Speaker 1: And you found particularly striking example really in the very
• 21:33
  Speaker 1: close to the Trump resort in Florida of Mara Lago.
• 21:37
  Speaker 1: So tell us a little bit about that. Yeah, So,
• 21:39
  Speaker 1: with some colleagues we set out to document how this
• 21:43
  Speaker 1: was hitting working families in America for a piece that
• 21:48
  Speaker 1: we did for Business Week that looked in particularly the
• 21:50
  Speaker 1: blue collar manufacturing economy. And what we discovered when we
• 21:56
  Speaker 1: started calling around to some food banks and so on,
• 22:00
  Speaker 1: was that there was a huge spike in demand for
• 22:04
  Speaker 1: help for food UH supplies from people who had these
• 22:09
  Speaker 1: paycheck to paycheck existences and suddenly had lost their jobs.
• 22:12
  Speaker 1: And one particular place that we found where that spike
• 22:16
  Speaker 1: was occurring was literally in the shadow of of Donald
• 22:20
  Speaker 1: Trump's private club mar Lago in Palm Beach County, Florida,
• 22:25
  Speaker 1: where a mile away there's an outfit called Howley's Diner,
• 22:30
  Speaker 1: where a UH the owner has for the past two
• 22:34
  Speaker 1: weeks been serving up thousands of meals a day to
• 22:38
  Speaker 1: people who are laid off in Hungary. And that is
• 22:42
  Speaker 1: just a striking example I think of of the economic carnage. Really,
• 22:48
  Speaker 1: that's that that's out there right now, and it illuminates
• 22:52
  Speaker 1: some problems that we talk about often in a kind
• 22:56
  Speaker 1: of again at a thirty thousand feet of of inequality
• 23:00
  Speaker 1: and food insecurity and so on. But it's right there
• 23:03
  Speaker 1: in the backyard of one of the wealthiest enclaves in America.
• 23:08
  Speaker 1: We will have plenty more to talk about in the
• 23:10
  Speaker 1: next few weeks and months, but for the moment, Sean,
• 23:13
  Speaker 1: thank you very much, Thanks for having me, thanks for
• 23:21
  Speaker 1: listening to Stephanomics. We'll be back next week with more
• 23:24
  Speaker 1: insight into how COVID nineteen is affecting the global economy
• 23:28
  Speaker 1: in the meantime. You can find us on the Bloomberg Terminal, website,
• 23:31
  Speaker 1: app or wherever you get your podcasts. And for more
• 23:34
  Speaker 1: news and analysis through the week from Bloomberg Economics, follow
• 23:38
  Speaker 1: at Economics on Twitter. You can also find me on
• 23:41
  Speaker 1: at my Stephanomics. This episode was produced by Magnus Hendrickson
• 23:46
  Speaker 1: Special thanks to Stephanie Kelton, Tom Morlick, and Sean Donnan.
• 23:50
  Speaker 1: Scott Lamman is the executive producer of Stephanomics and the
• 23:53
  Speaker 1: head of Bloomberg podcast is Francesca Levy four