Economic Devastation Likened To Great Depression, But Experts Say That’s A Flawed Comparison
Economic experts say that the Great Depression was triggered by a financial meltdown, and made worse by bad policy choices. That crisis dragged on for years, but economists foresee project a much shorter recovery time for the current downswing.
The New York Times:
Fed Chair Says Economic Recovery May ‘Stretch’ Through End Of 2021
Jerome H. Powell, the Federal Reserve chair, said that the United States would have a slow recovery from what he called the “biggest shock that the economy’s had in living memory,” suggesting that a full rebound from virus-induced lockdowns could take until the end of 2021. In an interview on “60 Minutes,” the CBS program, Mr. Powell reiterated that both Congress and the central bank may need to do more to help workers and businesses make it through the sudden and sharp slump caused by efforts to contain the coronavirus. (Smialek, 5/17)
Reuters:
Fed's Powell: 'Medical Metrics' Most Important Data For U.S. Economy Now: CBS
“If we are thoughtful and careful about how we reopen the economy so that people take these social distancing measures forward and try to do what we can not to have another outbreak...then the recovery can begin fairly soon,” Powell said. States are now easing restrictions imposed to slow the spread of the coronavirus. That has raised the hope of a gradual return to normal, but also has increased the risk of new infections. As Congress debates possible further economic relief, Powell has stretched the limits of typical central bank commentary, directly calling for more fiscal spending. In Sunday’s interview, he even urged people to wash their hands and wear masks to aid the recovery. (5/17)
The Associated Press:
Powell: Recovery May Begin By Summer, Will Likely Be Slow
“In the long run, and even in the medium run,” the chairman said, “you wouldn’t want to bet against the American economy. This economy will recover. And that means people will go back to work. Unemployment will get back down. We’ll get through this.” Powell pointed out that the downturn wasn’t a result of deep-seated financial instabilities, like the housing meltdown and the excessive risk-taking among banks that ignited the Great Recession. Rather, it resulted from an external event — a pandemic — that required a shutdown of the economy. That may mean, he said, that “we can get back to a healthy economy fairly quickly.” (Rugaber, 5/17)
NPR:
Economic Crisis Is Historic, Not Another Great Depression, Experts Say
With the U.S. economy in free-fall, a lot of forecasters have been digging deep into the history books, looking for a guideposts of what to expect. Often, they've turned to the chapter on the 1930s. "Clearly people have made comparisons to the Great Depression," said former Federal Reserve Chairman Ben Bernanke. "It's not a very good comparison," he cautioned. (Horsley, 5/17)
The Wall Street Journal:
After Devastating Economic Contraction, Glimmers Of Growth Emerge
There are signs the economic contraction caused by the pandemic, the steepest since the Great Depression, has bottomed out and a tentative recovery may be under way. Though government data show record monthly drops in retail sales and manufacturing production in April, in a fast-changing environment new trends often appear first in private daily and weekly data. And although they are less reliable and comprehensive than government figures, these figures are showing some signs of a turning point. (Ip, 5/16)
The Washington Post:
Coronavirus Pushes A Man To A Food Pantry Line For The First Time In His Life
I’ve never done anything like this. I don’t really know how it works. I’ve been standing in line for a few hours now, and it’s barely starting to move. I’m not complaining. It’s a blessing to be here. I’ll wait all day if I have to, because this virus has left me with no other choice, but what happens if they run out of food? (As told to Eli Saslow, 5/16)
The Wall Street Journal:
The Fed’s $600 Billion Challenge: Lending Directly To Businesses
The Federal Reserve is preparing to lend directly to middle-market businesses, filling a hole left by the government’s economic crisis relief efforts, and it is shaping up to be one of the trickiest things it has ever done. The risk for the Fed is that it goes where the central bank has rarely ventured and that not many businesses seek help, creating both financial and political headaches. (Timiraos, 5/18)
Politico:
Coronavirus Could Push Social Security To Insolvency Before 2030
Social Security could be insolvent by the end of this decade because of the coronavirus pandemic, according to some new estimates, creating new pressure for Congress to fix the troubled program after decades of inaction. The last official government projection had the program running out of money by 2035. But some outside economists are looking at the trends and moving up the date when the program starts paying out more than it takes in: Tens of millions of workers are suddenly unemployed and not paying into the government account that funds benefits for retired workers. (Emma, 5/17)
