Adam Tooze/Shockwave

David and Helen talk to Adam Tooze about what we know about the crisis that we didn't know a month ago, and what we still don't have much of a clue about. From fights inside the French government to the fate of the planet, from shale gas to corona bonds, we try to join up the dots. Plus a small update recorded after news of the oil price-drop. Read 'Shockwave' by Adam Tooze in the LRB

Talking Points:

The dominant reality is the scale of the unemployment rate, especially in the U.S.

  • Michigan’s unemployment rate soared to 25% in a single month.
  • We have often seen an extraordinary policy response. 

The Fed’s initial policy response was a failure: they didn’t stabilize share and bond markets. But it has now, at least in part, succeeded.

  • It also seems to have stabilized dollar funding markets.
  • The Fed did in about 3 days what took roughly a year in ‘07/’08.
  • Will these actions make democratic politics more difficult in the medium term?

The Fed’s ability to act in certain ways has depended on congressional cooperation. 

  • This could change if Biden were elected. Trump’s presidency enables the GOP to behave more pragmatically.
  • The shale industry is being bailed out—this is a tricky issue for the Democratic party.

Is data the new oil?

  • The tensions between Russia and Saudi crashed into the virus. 
  • It’s hard to see how oil prices will recover any time soon.
  • Are we entering the oil endgame? If so, seizing market share immediately is much more important.  
  • The oil and the financial elements of this crisis are closely connected.

Has anyone moved the dial on corona bonds?

  • The Germans didn’t want the question to be put, but the French went ahead and did it.
  • But Macron’s recent interview with the Financial Times was vague. How serious are they?
  • How does the Eurozone engage in common borrowing without engaging in common taxation?

Mentioned in this Episode:

Further Learning: 

And as ever, recommended reading curated by our friends at the LRB can be found here: