Mnuchin is Wrong About Both COVID-19 & the Recession

He recently claimed---
1.  The economy should rebound once the new virus is "contained".  [There are two assumptions in that view:  the bug will be contained; and our economy will or should rebound.]
2.  The designation, Recession, is not "terribly relevant" because it's the gov't that is effectively shutting down large parts of the economy.  The downturn is not due to underlying economic conditions.  Instead, it's due to measures necessary to slow down the spread of the virus.
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All the above sounds reasonable, but is it?  Consider the following.

1.  Containment does not mean eradication.  It means limiting the virus to a smaller number of areas.  The way things are looking, it's too late for that.  [Nevertheless, "flattening the curve" is important.]  This virus, officially designated by WHO as SARS CoV-2 or SARS 2, spreads easily and rapidly.  [SARS = Severe Acute Respiratory Syndrome.]  Too many younger people (in particular) appear to be spreading it all over...because, since most cases of infection are mild to moderate, the younger crowd seems to think it's no big deal.  The fact is, covid-19 (SARS CoV-2) is spreading like wildfire both here and globally.  Containment is not likely.  The best we can hope for is slowing the spread and rate of infection (flattening the curve), thus giving the medical establishment time to get caught up, so to speak.  That means rapid testing, isolation, and more PPE (Personal Protective Equipment...for health care staff).

2.  The slow initial response re testing, and the continued slowness of testing, means that this virus is now in all 50 States here...and in people who currently are showing no symptoms whatsoever.  Add to that the instances where people simply are not practicing social distancing at all.  Except for the three cities with large numbers of known infections, I'm mostly convinced that too many people (everywhere else) are not taking proper precautions.  I know for sure they're not in this little valley where I live.

3.  An unknown number of people infected with this bug are going to work.  They're showing no symptoms yet.  Some people with symptoms are going to work anyway; they have little financial choice.

4.  Bottom line re covid-19 in the USA:  it already has become widely spread, and continues to do so.

5.  The Administration is reluctant to use the word, Recession (which we're already in); arguably, we're rapidly approaching a full-blown, economic Depression.  [The 1930's Great Depression, which lasted about ten years, was not so named until halfway through it.]  There are at least two economies in the USA:  one for the top 20% (or so) of income earners; and one for the bottom 80%.  When Trump & Crew refer to "our great economy, the greatest in our history", they're referencing the economy of the top tier, not that of the overwhelming majority of Americans.  Even then, they're inaccurate.  Our greatest economy was during the Golden Age of American Capitalism, from about 1946 to the "Nixon Shock" in 1971.  The Trump years aren't even in the same universe, never mind ballpark, as that economic boom.  By the way, mega biz was taxed at up to 90% then... and they still prospered.

6.  In several fairly recent past posts, I've detailed the reasons for the contention immediately above.  No time or energy to repeat all that, but here's a partial, truncated list of those reasons.

a.  Record national/public, corporate, and personal DEBT...and it's all coming home to roost.  U.S. TOTAL Debt is now over $76.8 trillion.

b.  50% of workers in the USA make less than $33,882 per year.  The Middle Class continues to shrink.  (See:  usdebtclock.org)

c.  The Gov't Jobs Report fails to identify how many jobs are part-time, temporary, or both.  Too many people are struggling with two or more jobs.

d.  The unemployment stats put out by the Feds are always way too low.  See this post:  http://individualsovereignty.blogspot.com/2018/02/the-real-state-of-union-rather-than.html

e.  Many countries are dumping Dollars, forming their own currency exchange agreements, and their own Trade agreements.  Trump has so alienated them that they are by-passing the USA.  Even prior to The Don, the same thing was going on in order to oppose American hegemony.  We are becoming isolated in the world economy.  Other countries are tired of our Govt's bullying.

In addition---

7.  Mega Banks and other Mega Corporations do little to nothing to help increase the number of good-paying jobs and manufacturing in this country.  Despite the current Admin's rhetoric, factories & jobs continue to flow South or overseas.

8.  Bizarre financial Derivatives continue to threaten our Financial Sector and/or our economy and the world's, as well.  Essentially nothing is being done to correct that situation.

9.  Mega monopolization in the Business world is stifling small businesses in the USA.

10.  Rampant Financialization (since the 1970's) continues to destroy jobs and manufacturing, suck up Middle and Lower Class income, and cause an exponential rise in income inequality.

11.  Bottom line re Recession:  even without the covid-19 trigger, we were right on the cusp of the overdue Recession.  The virus wasn't the cause of the Recession we're in now; it was merely the trigger.  The causes I just listed above.  Our economy is not resilient.  Even the workers are always in a precarious situation--- insecure jobs, poor benefits, essentially flat wages, low wages, obscene health care costs, etc.  The economist, Guy Standing, refers to them being in the Precariat Class.
https://www.youtube.com/watch?v=nnYhZCUYOxs
Even people who are doing okay, living paycheck to paycheck, have little to no way of saving for a rainy day.  The Establishment doesn't want them to save.  It wants them to spend, spend, spend... and to increase their debt... so that the consumer society can expand, expand, expand.  Debt will be our downfall.

12.  Finally, on both the disease and economic fronts, this is not about only the USA.  It's worldwide.  On the economic front, most of the "Developed" countries (not only here in the U.S.) are on the cusp of--- or already in ---a Recession.  We in the USA cannot be unaffected by that.  The next Depression, like the last, will be worldwide.
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p.s.  The reason the Dems in Congress haven't yet (as of about 7 AM) agreed to pass the COVID-19 Relief Bill--- or whatever it's called ---is because the money going to corporations has too few to zero conditions on it.  Remember the last Bailout Congress passed re the Mega Banks?  No restrictions as to use of that money.  Did they loan it out to stimulate the economy?  Answer:  very little of it.
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Not only my opinion.  Be Well

"There's No Threat to Capitalism Like Capitalists"

Note---
I hope you don't leave this piece before reading the portion about Trump and Mnuchin.  Though the topic below is a bit of history, I do relate it to the players of today.  Plus, I suspect much of the history relayed in the video is mostly unknown to many or most people.
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There's a link below to an interview of William K. Black by Bill Moyers.  Black was a bank regulator key to the production of about a thousand criminal referrals in the Savings & Loan fraud in the 1980's.  He's also a Professor of Economics and Law, and in my view, a genuine American hero.  For more than a quarter century, he has worked tirelessly to expose the ongoing ripoff of the American public by Mega Banks and their political Cronies in DC.
https://www.youtube.com/watch?v=tXWaAQpofqE&amp=&index=28&amp=&list=WL

In the above clip, Black explains exactly what caused the 2008 Crash and the complicity of Obama, Holder, Geithner, Jamie Dimon, and others.  He also tells us why the same thing will happen again.  This general topic may be old news, but the details in this interview are revealing, breathtaking, and largely unknown by the "average" American.  It's a Must-See, and brutally relevant to today.

Capitalism is a great economic system, but without strong regulations and enforcement it becomes Crony Capitalism-Casino Capitalism-Surveillance Capitalism and a Kleptocracy for the Super-Rich.  History supports that contention.  There's no question about it.

So, what about Trump relative to this essay?  That's probably an eight-hour conversation.  Briefly, though, here are some points to consider---
1.  Elsewhere in this venue, I've explained why he owes Bankers big-time, both literally & figuratively.
2.  He and his Crew are decimating regulations across the board, including Banking regulations.
3.  His Secretary of the Treasury is Mnuchin, who was more or less a foreclosure king during the last Crash.  Because he would make millions, he was overheard saying prior to the last bursting of the Housing Bubble, "I'm hoping for a real estate crash".  He was a Goldman Sachs Banker for 17 years.  He financially supported Hillary in her Primary run against Obama, and then supported Obama in his run against McCain.  He has strong ties to Wall Street, and apparently, no defining political ideology.  In some ways, he's another Paulson.

None of the above speaks well for Trump in relation to the coming Crash.  The Mega Bankers again will make out like the bandits they are...at our expense.

Not only my opinion.  Be Well
p.s.  The title quote is from William K. Black, and it's in the video interview.

The Largest Amount of Borrowed Money in Any Quarter in USA History

In the 1st Quarter of this year, the Fed borrowed $488 billion...the largest amount for any Quarter in our history.  The Treasury Secretary claims that the Bond Market is "robust", and can handle the borrowing.  In fact, that Market has peaked and is trending down.  It's starting to collapse.  Our Debt is a Bubble sitting on a pin. 

That amount of borrowing plus the Repub Tax Cuts plus other factors = a big rise in price inflation, probably within a year or so.  Mnuchin (Treas. Sec.) says it's good to have a little inflation..."We want wages to increase."  Better hope inflation doesn't exceed the increase in wages; and sorry, but most likely it will.  It's almost there already...only .5% away from the last wage increase numbers.

So much for fiscal responsibility.  Those in the Congress and the White House who claim to be "Conservatives"...aren't.  NeoConservatives are a horse of an entirely different color.

Try as they may, the Establishment (including Trump & Crew) cannot avoid the metrics of the overdue Economic/Financial Crash on the horizon.  According to a study by Deutsche Bank, countries that don't properly manage their Debt experience a huge increase in Financial shocks, shocks that can severely damage the economy.  That has been our path every 7-12 years since the 1973-1975 Recession.  You can thank the Fed, the Mega Bank Casino Capitalists, and most of our DC politicians.  It should be obvious that the bombastic Trump & Crew are not significantly changing anything for the better.  They aren't draining the swamp; they're draining the country of a decent future.  Take a look at USDebtClock.org ...not just the upper left corner, but the entire table/chart.

Not only my opinion.  Be Well

p.s.  Another reminder:  I'm not a Democrat or a Republican.