April 3, 2020
Listen to my take on today’s Jobs Numbers with a loss of 701,000 jobs–even before the loss of 10 million more in the last two weeks of March are counted. In the second half of the show the discussion is why a recovery from the current deep ‘Great Recession 2.0’ will not be V-shaped, i.e. won’t ‘snap back’ later this summer. What are the economic reasons and why media talking heads, politicians, and much of mainstream professional economists like Robert Reich, Larry Summers, and others are wrong.
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SHOW ANOUNCEMENT
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Dr. Rasmus explains why a V-shape recovery from the current crisis will not happen, despite all the marketing spin by Trump, politicians and myopic economists. The show today addresses first the employment numbers reported by the Labor Dept. Rasmus explains those numbers don’t include the last two weeks of March and the 10m workers filing for unemployment benefits. The official unemployment rate of 4.4% reported is thus a gross understatement (and also useless since it always states job losses for only full time employed). Why aren’t those still working being rewarded for hazard work is the next theme of the show, based on Dr. Rasmus’ recently published ‘Covid-19 and the Forgotten Working Class’. The last half hour addresses the theme why a V shape recovery is not going to happen. Rasmus explains why uncertainty and negative expectations by business and households alike will mean more cash hoarding, savings instead of consumption, debt pay down, slow recovery of bank lending, decline in business and household demand for credit, global trade collapse, and business cost cutting carried forward—all mean a slow and tenuous recovery of business investment and consumer spending. Two additional ‘wildcards’ that could depress recovery still further as well might be politicians returning to austerity in 2021 to offset the massive deficits ($6.7T) and $30T (from $22T) national debt + the Fed’s possible failure to prevent a financial crash in coming months. (Check out Dr. Rasmus’ blog posts on the economy today at jackrasmus.com).
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