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 https://www.lrb.co.uk/the-paper/v42/n08/adam-tooze/shockwave.
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:
- Our last episode with Adam
- David and Helen talking to Nate Silver
- Adam’s piece for the LRB on COVID and the global economy
- Macron’s interview with the Financial Times… on YouTube
- The transcript of Macron’s FT interview
And as ever, recommended reading curated by our friends at the LRB can be found here: lrb.co.uk/talking