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China and the U.S. are growing (or not growing) economically apart


And I WANNA go back a couple of days to this report from the International Monetary Fund saying the global economy was going to shrink this year by three percent and then in that same report. They said you know. We're looking at a rebound in twenty twenty one and I wanna know if you as a trained economist on this radio show today by that. That's a hard one. I I think when we looked at twenty twenty we expected a global rebound from for the year in January. We saw that. The trade agreement remember that last year. That was the biggest crisis. Twenty nineteen trade agreement between the US and China with the Tailwind for global growth more broadly. And so when the World Bank is basically saying is that nineteen just world on pause for a year and it restarts twenty twenty one. I do think the world looks better in twenty twenty one but I think it's going to be hard list to get to three percent. Gdp grouse Lovely in twenty one and been everything. That's going down right now right right. We'll just we'll just note here. The varying sound quality. Here this being live rated but we're all doing From our living rooms and let me ask you to turn to China here for a second. We're doing some China the rest of the program but we have to point out that What had been one of the fastest growing economies in the world shrank last quarter by almost seven percent. It's pretty clear we're not going to get them the Chinese to help drive out of this lockdown right now at the Chinese. Were counting on us to help them to get their economy back on track and since it's still an x force case economy now. The Chinese are worried. Because we'RE NOT GONNA be buying as many of their goods so the whole world is stuck in a funk. Nobody's GonNa be healthy guy that drags everybody through this. We're all going down together and it's very interesting that to me that we're in a in a moment where world leaders can't really see to coalesce around anything but we need each other more than ever need each other to be stable more than ever to be able to get out of it. Well so look Neil on that thought of US meeting each other more than ever. Let's apply that domestically here for a second and the idea that Congress. Now we've exhausted that three hundred fifty billion dollars in the Small Business Administration loan program. The Senate in the House are out on recess and cannot come to terms on what to do next. If you're an American business person what what are you planning for? Because the uncertainty it seems gets worse every day in this crisis but still you have to plan in process rights are. Luckily we have another outlet? Which is the Fed the Federal Reserve? Has I thought they were holding meetings chair Powell's a garage because they were throwing out so many kitchen sinks that this problem they have done everything and probably some things that I haven't thought about to arrest this problem in really make sure that credit flows to households in consumers at around Congress in around Leveraging some of the congressional move says while and enlists remember that banks are actually going to be part of the solution here instead of the problem as they were in two thousand. Eight Bank. Balance Sheets are very strong very solid after ten years of regulation so there is some help stealth flooding even. Congress is on recess for right. Now let me ask you. This is look this is in a way. It's a scary question. It's a little bit cynical but it's something that's been on my mind so yes. The Fed is going great guns and doing what it can part of. What it's able to do is because it has the backing of the Treasury and and some approvals by the Congress. Do you suppose though that it's possible that this crisis accelerate so quickly as Congress can't come to terms that it that it exceeds the capacity of the American government to fix while it depends on how behind Americans themselves get on debt payments and things like that and it depends on the whole that the federal government lied to steepen that dot the base that you're talking to Washington going on right now Is that the Republicans want to send money to the Small Business Administration program. That's been helping small businesses with their payroll and at the same time. Democrats want to send money to the state and to the hospitals that have been dealing with this problem on the front line. Republicans don't WanNa do it there They don't want to send emergency funds stays in hospitals. Which is I just. Don't understand how to be an ideological thing. We'RE GONNA get ideological here. We're all GONNA be in big trouble because this is a problem that is going to require creative thinking outside any problem that That had faced the American people. And it's GonNa require us to think about the economy in two different stages one is. What is the Post Lockdown Pre Vaccine Colona virus economy? Going to look like and it's GonNa be one but we have to shift workers to contract tracing we're going to have to ramp up testing teach people how to be back if they've gotta be a completely different economy and then we have to think of how to transition the economy from that economy into a post vaccine economy which is an attempt to really truly normalized for world. And there's no I know ideology belongs in any of that discussion. Because if you don't increase the size of the federal government or state government or any government you can't get from the please vaccine pays to the Po- sexy is this Neil Miller real quick and I mean like thirty seconds. Neela it is fundamentally a discussion once again of the role of government in this economy. Right government right now. Is the prime the pump right? We know that things are going to get worse before they get that. We just started the social containment in late March or seeing the effects of that head Americans now but eventually it will get better because we're also seeing progress in testing and innovations in vaccines and treatment. It's a hard road road till then but look what already. The American people have gotten shut down an economy voluntarily to attack head on health crisis that was projected a few short weeks ago to be much worse than it is already turning out to be so in that sense. There is hope that we have enough ingenuity among us all to combat this crisis and to get through it together

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