Transcript
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another terrifying economic
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fact for everybody about the kovid
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depression here
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this is in cnbc as the economic fallout
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from the coronavirus pandemic continues
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almost one-third of u.s households
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32 percent have not made their full
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housing payments
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for july yet according to a survey by
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apartment list
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and online rental platform about 19
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percent of americans
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made no housing payment at all during
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the first week of the month
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and 13 only paid a portion of their rent
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or mortgage
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that’s the fourth month in a row that a
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quote
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historically high number of households
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were unable to pay their housing bill
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on time and in full up from 30 percent
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in june and 31 in may
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renters low income and younger
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households were most
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likely to miss their payments apartment
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list found
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so listen to this many households
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have already spent their one-time
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stimulus check
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the one-time 1200 check and the extra
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600
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per week in unemployment insurance
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used by many to cover essentials like
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housing
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runs out at the end of july
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that means even more households could
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potentially miss
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their rent or mortgage payments in the
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coming months
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we’re already at 32 percent
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we’re already at 32 percent
what’s that going to go up to when you
get rid of the 600
per week unemployment insurance increase
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and again it goes away at the end of
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this month
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what’s that going to get up to over 50
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percent
over 50 percent of people unable to pay
their rent or their mortgage
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over half the country is that what’s
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gonna happen over half the country
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can’t pay their rent and can’t pay their
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mortgage
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i’m at a loss for words we’ve never seen
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anything like this before
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i don’t know how many times i could tell
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you that
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when you look at the subprime mortgage
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crisis in the great recession
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in 2009 guys
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even before covid we were kicking two
million people
out of their house i believe per month
which is higher
than the height of the great recession
that was pre-coveted
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pre-covet what’s gonna happen
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when we’re totally done with covid no
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more cases which it’ll be a while by the
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way before we get there
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what’s gonna happen to all these people
who can’t make their payments what’s
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going to happen
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over 50 percent of the country perhaps
is not going to be able to make their
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payments
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you think we’re seeing social unrest
with this george floyd situation
just wait just wait
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there will be social unrest the likes of
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which we maybe haven’t seen in this
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country before
when you have real unemployment over 20
percent when you have a situation where
maybe half the country or
more can’t pay the bills
i mean that’s a recipe for revolution i
don’t want to sound hyperbolic about it
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but like all the distractions in the
world
cannot save us from the inevitable
i get it you know we live in the modern
era we got computers
we got netflix we’re like plugged in in
a way that can distract us from
all the problems of everyday life but if
over half the country can’t
keep a roof over their head what do you
think is going to happen
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and just so everybody understands i’m an
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idiot loudmouth youtuber and i’m talking
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about this
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do you think that mitch mcconnell do you
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think that nancy pelosi or chuck schumer
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do you think that trump or his merry
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band of idiot advisors like larry kudlow
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you think that they know that this is on
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the way and that
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this is the dire situation that we’re in
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you think they know they have literally
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no idea
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trump goes out there every day now and
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brags about the v-shaped recovery
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it’s unbelievable the stock market is
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bouncing back
the stock market 92 of the stock market
is owned by the top
10 of income earners
so you’re bragging about the stock
market you’re bragging about how the
rich you’re doing you’re bragging about
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how the corporations are doing
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guys we had a full corporate bailout we
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had full
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corporate socialism at the beginning of
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this crisis it was naomi klein shock
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doctrine 101.
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they looked at kovid they looked at the
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impact
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the federal reserve the central bank
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stepped in and said we will do anything
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to prop the market up a trillion dollars
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in liquidity per day
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fine then you had the cares act
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the coveted bailout it was crumbs to the
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people but really the point of that was
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the five trillion dollars to corporate
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america
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to let them know hey we got your back
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so we fully socialized corporate america
propped them up and then now
regular people are the ones who are
getting screwed why didn’t we just not
bail them out and bail
just do a bailout from the bottom up
instead of the top down this is the same
thing we didn’t know eight we did a
top-down
bailout not a bottom-up same thing now
we did a top-down bailout not a
bottom-up
well when you don’t bail out from the
bottom up this is what happens
you’re gonna have 50 of the country who
can’t live who can’t put a roof over
their head
we’ve never seen anything like this and
to think about the fact
that in the midst of this crisis with a
pandemic
they’re like no we will not do medicare
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for all you’re not going to get health
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care
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there’s a pandemic bro people can’t pay
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the bills they can’t even put a roof
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over there do you think they can afford
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medical bills if they get sick
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are you kidding me even the idea even
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the concept
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of medical bills makes me sick just
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hearing it
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somehow other countries have figured out
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how to make sure everything’s covered
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when it comes to your health
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this country nope you might have to go
bankrupt you have to go bankrupt because
you got sick
that’s the way it works we’ve covered
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stories what was it forty thousand
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dollar bill because somebody had coveted
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and they needed a lot of care
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they’re denying you universal health
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care in a pandemic
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they’re denying you universal basic
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income
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when you can’t work because of the
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pandemic
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they give you a one-time 1 200 payment
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that you went through in probably a week
if they don’t make real concessions i
shudder thinking about what happens
in the future if they don’t do real
concessions if they don’t do medicare
for all
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if they don’t do universal basic income
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i
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shudder at what’s going to happen this
country is coming apart at the seams it
could come
apart a lot worse than it already has
because there’s no way you can keep the
facade going
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when probably over half the people will
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not be able to put a roof over their
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head
what do you want to do you want to you
want to evict all of them or foreclose
on all of them you want to keep them all
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out of their
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their place where they live is that what
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you want to do
you want millions and millions and
millions and millions of
new homeless people is that what you
want to do
you know i knew our government was
totally corrupt and terrible
but i think i was naive in the sense
that
on some level i thought well they won’t
let it get
beyond a certain point like it won’t
get so bad that it threatens the fabric
of the system
period no it will and they’re totally
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unaware
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it absolutely will they’ll let it get as
bad as possible because these guys are
not there to represent you
they’re not they’re given money to get
elected
by corporations and billionaires so when
they get in there they represent
corporations and billionaires they don’t
care about you
and this is the result this is the
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result
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we have the solutions that’s the thing
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that’s probably the most frustrating
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is that we know what would work we know
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how to fix these problems
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we know how to make our country better
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and they just they’re not doing any of
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those ideas they’re not doing medicare
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for all
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they’re not doing free college they’re
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not doing a great new deal they’re not
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doing a living wage
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they’re not ending right to work laws
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and having stronger
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union laws they’re not doing universal
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basic income
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there are really clear ways they’re not
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getting money out of politics
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they’re really clear ways to fix all
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this stuff they don’t want to do it
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they want to do it and we’re about to
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see unrest
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that again will make the george floyd
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protest look like cakewalk because
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this may surpass the great depression if
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these numbers
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come to fruition
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think about how the history books are
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going to look at this point in time
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think about how they’re going to look
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back on this
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kind things are not going to be said
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about this era about this generation
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and i haven’t even touched climate
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change yet which is ecological disaster
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which is
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civilization threatening haven’t even
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touched that yet
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oh that is a nihilistic laugh i just had
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if i’ve ever heard of one
From Economic Crisis to World War III
The response to the 2008 economic crisis has relied far too much on monetary stimulus, in the form of quantitative easing and near-zero (or even negative) interest rates, and included far too little structural reform. This means that the next crisis could come soon – and pave the way for a large-scale military conflict.
BEIJING – The next economic crisis is closer than you think. But what you should really worry about is what comes after: in the current social, political, and technological landscape, a prolonged economic crisis, combined with rising income inequality, could well escalate into a major global military conflict.
The 2008-09 global financial crisis almost bankrupted governments and caused systemic collapse. Policymakers managed to pull the global economy back from the brink, using massive monetary stimulus, including quantitative easing and near-zero (or even negative) interest rates.
But monetary stimulus is like an adrenaline shot to jump-start an arrested heart; it can revive the patient, but it does nothing to cure the disease. Treating a sick economy requires structural reforms, which can cover everything from financial and labor markets to tax systems, fertility patterns, and education policies.1
Policymakers have utterly failed to pursue such reforms, despite promising to do so. Instead, they have remained preoccupied with politics. From Italy to Germany, forming and sustaining governments now seems to take more time than actual governing. And Greece, for example, has relied on money from international creditors to keep its head (barely) above water, rather than genuinely reforming its pension system or improving its business environment.
The lack of structural reform has meant that the unprecedented excess liquidity that central banks injected into their economies was not allocated to its most efficient uses. Instead, it raised global asset prices to levels even higher than those prevailing before 2008.
In the United States, housing prices are now 8% higher than they were at the peak of the property bubble in 2006, according to the property website Zillow. The price-to-earnings (CAPE) ratio, which measures whether stock-market prices are within a reasonable range, is now higher than it was both in 2008 and at the start of the Great Depression in 1929.
As monetary tightening reveals the vulnerabilities in the real economy, the collapse of asset-price bubbles will trigger another economic crisis – one that could be even more severe than the last, because we have built up a tolerance to our strongest macroeconomic medications. A decade of regular adrenaline shots, in the form of ultra-low interest rates and unconventional monetary policies, has severely depleted their power to stabilize and stimulate the economy.
If history is any guide, the consequences of this mistake could extend far beyond the economy. According to Harvard’s Benjamin Friedman, prolonged periods of economic distress have been characterized also by public antipathy toward minority groups or foreign countries – attitudes that can help to fuel unrest, terrorism, or even war.
For example, during the Great Depression, US President Herbert Hoover signed the 1930 Smoot-Hawley Tariff Act, intended to protect American workers and farmers from foreign competition. In the subsequent five years, global trade shrank by two-thirds. Within a decade, World War II had begun.
To be sure, WWII, like World War I, was caused by a multitude of factors; there is no standard path to war. But there is reason to believe that high levels of inequality can play a significant role in stoking conflict.
According to research by the economist Thomas Piketty, a spike in income inequality is often followed by a great crisis. Income inequality then declines for a while, before rising again, until a new peak – and a new disaster.
This is all the more worrying in view of the numerous other factors stoking social unrest and diplomatic tension, including
- technological disruption, a
- record-breaking migration crisis,
- anxiety over globalization,
- political polarization, and
- rising nationalism.
All are symptoms of failed policies that could turn out to be trigger points for a future crisis.
.. Voters have good reason to be frustrated, but the emotionally appealing populists to whom they are increasingly giving their support are offering ill-advised solutions that will only make matters worse. For example, despite the world’s unprecedented interconnectedness, multilateralism is increasingly being eschewed, as countries – most notably, Donald Trump’s US – pursue unilateral, isolationist policies. Meanwhile, proxy wars are raging in Syria and Yemen.
Against this background, we must take seriously the possibility that the next economic crisis could lead to a large-scale military confrontation. By the logicof the political scientist Samuel Huntington , considering such a scenario could help us avoid it, because it would force us to take action. In this case, the key will be for policymakers to pursue the structural reforms that they have long promised, while replacing finger-pointing and antagonism with a sensible and respectful global dialogue. The alternative may well be global conflagration.
The Singapore Summit’s Uncertain Legacy
Trump seems to think that Kim can be swayed not simply by threats and pressure, but by flattery and promises as well. The White House released a four-minute video that showcased Kim as someone who could be a great historical figure if only he would fundamentally change. The video also went to great lengths to show what North Korea could gain economically were it to meet US demands. The president even spoke of the North’s potential as a venue for real-estate development and tourism.
What seems not to have occurred to Trump is that such a future holds more peril than promise to someone whose family has ruled with an iron grip for three generations. A North Korea open to Western businessmen might soon find itself penetrated by Western ideas. Popular unrest would be sure to follow.
.. Trump emphasizes the importance of personal relationships, and he claimed to have developed one with Kim in a matter of hours. More than once, he spoke of the trust he had for a leader with a record of killing off those (including an uncle and a brother) he deemed his enemies.
.. His depiction of the summit as a great success that solved the nuclear problem will make it that much tougher to maintain international support for the economic sanctions that are still needed to pressure North Korea.
.. The danger, of course, is that subsequent negotiations will fail, for all these reasons, to bring about the complete and verifiable denuclearization of North Korea that the US has said must happen soon. Trump would likely then accuse Kim of betraying his trust.
.. In that case, the US would have three options. It could accept less than full denuclearization, an outcome that Trump and his top aides have said they would reject. It could impose even stricter sanctions, to which China and Russia are unlikely to sign up. Or it could reintroduce the threat of military force, which South Korea, in particular, would resist.
.. But if Trump concludes that diplomacy has failed, he could nonetheless opt for military action, a course John Bolton suggested just before becoming national security adviser. This would hardly be the legacy that Trump intended for the Singapore summit, but it remains more possible than his optimistic tweets would lead one to believe.