The economic destruction brought on by the COVID-19 global pandemic has brought up many comparisons to the Great Recession of 2008-09. While that crisis started in the financial sector and bled through the entire economy, this one was brought on by a global health crisis that caused the worldwide economy to come to a sudden stop, dislocating supply chains, industries, enterprises, small businesses, and consumers in unprecedented ways.
- COVID-19 has brought out the magnitude of our inequalities—which will worsen if there is no assistance from the federal government for states.
- The premise of globalization—that you don’t need to be self-reliant, for example, in energy and food—will be greatly undermined. A global market does not protect in a pandemic; countries will seek some self-sufficiency.
- The price crash will discourage drilling for oil and gas and shale gas, but may make the transition to a green economy more difficult.
- I think we’ll wind up with some version of a European healthcare system, possibly through the public option as a transition mechanism.
- We will also improve access to higher education and significantly increase the minimum wage
- I hope we will have learned to appreciate how important government and collective action is, as part of the right balance in a well-functioning society.
- The COVID-19 crisis may bring about a greater appreciation of science.
Government and central bank response to this crisis, like that of 2008-09, has also been swift and unprecedented. But there are already signs that the relief and policy measures will be handed out unevenly, as they were in the last crisis, creating even more income inequality in America.
Nobel laureate, professor and best-selling author Joseph Stiglitz was among leading economists decrying the rise in income inequality and the bailout of Wall Street in 2008 as Main Street slogged its way through years of a slow recovery. Just before the onset of the global pandemic, Stiglitz authored his latest book, People, Power, and Profits, which chronicles how the masses have lost economic leverage and lays out a path for a more progressive capitalism that shrinks income inequality.