Yves here. Recession strikes me as an optimistic take. But then again, the UN has long sugar-coated its downbeat messages.
By Evelyn Leopold, a writing fellow and correspondent for Globetrotter, a project of the Independent Media Institute. She is an independent journalist based at the United Nations as resident correspondent. She was bureau chief for Reuters at the UN for 17 years, and is chair of the Dag Hammarskjöld Fund for Journalists. She was awarded a gold medal in 2000 for UN reporting by the UN Correspondents Association. Produced by Globetrotter, a project of the Independent Media Institute
The United Nations has shut down most of its meetings and all of its conferences, but the world body in New York stays open. There are peacekeeping missions to follow, conflicts around the world and the plight of the millions of refugees from wars that don’t heal.
But most of the work is done electronically with meetings conducted remotely. Despite the coronavirus (COVID-19), Secretary-General Antonio Guterres reports to work and telephones UN officials and world leaders from his office.
Major summit conferences have been canceled, and travel bans have left many diplomats stranded. The 193-nation General Assembly, the global parliament, has had no meetings since March 6, and the 15-nation prestigious Security Council intends to meet only when there is no other way to discuss or vote on a measure electronically.
On March 19, Guterres held a remote press conference with resident correspondents following sign-in instructions from the chief spokesman, Stephane Dujarric, who, along with his deputy, Farhan Aziz Haq, had appeared in person every noon until March 17. This time Melissa Fleming, the undersecretary-general for global communications, led the session but allowed few questions.
UN Chief Talks of Recession
The UN chief warned that current responses to the world’s common enemy, coronavirus, were inadequate because “we are in an unprecedented situation and the normal rules no longer apply.”
“This is a moment that demands coordinated, decisive, and innovative policy action from the world’s leading economies. We must recognize that the poorest and most vulnerable—especially women—will be the hardest hit,” Guterres said.
Global Recession
“A global recession—perhaps of record dimensions—is a near certainty,” he said. Guterres cited a report by the International Labor Organization that said workers around the world could lose $3.4 trillion in income by the end of this year.
So far, as of March 19, there have been more than 219,000 coronavirus infections and an estimated 8,900 deaths.
Guterres said he would participate in an emergency summit the following week, by teleconferencing, with the leaders of the Group of 20, major economic powers, who intend to respond to the pandemic. He appealed to them to have “a particular concern with African countries” and other countries in the developing world. Saudi Arabia called the meeting.
A prime minister of Portugal from 1995 to 2002 and chief of the UN refugee agency from 2005 to 2015, Guterres said governments and central banks have to guarantee there is liquidity in the financial system. Banks, he said, have to “support their customers” but “apply that same logic to the most vulnerable countries” by alleviating their debt.
Infection
On March 9, a diplomat from the Philippine mission to the United Nations had tested positive for the virus, the first case reported in New York. And more recently, one staff member, who was not identified, came down with the virus, and a close colleague of this reporter recently announced he had tested positive but was recovering.
More than 20 UN officials worldwide have come down with the virus, Dujarric said. One was David Beasley, the executive director of the Geneva-based World Food Program. He is resting at his South Carolina home.
What Was Canceled?
The cancellations in the world’s largest multinational forum have been painful. The first was the 1,200-plus women from around the world expected to attend the annual Commission on the Status of Women events in mid-March. Their lobbying often changes the position of governments. They are also valued for making connections across the globe and participating in many side events.
Among many other key events were at least two regional meetings to prepare for COP26 (Conference of Parties) in Glasgow, the UN climate change conference in November, which had promised some concrete action this year. Of course the United States has opted out of support for climate targets.
Still, the UN is reeling from the cuts in daily meetings. To achieve an agreement or consensus on nearly every subject in the world, especially conflicts, diplomats need to talk to each other face to face.
And most startling would be a postponement or cancellation in September for the UN General Assembly, the largest global multilateral forum that would also celebrate the world body’s 75th anniversary.
Let Them Eat Cake, Says U.S.
Meanwhile, the World Health Organization (WHO), a UN agency, has overcome some earlier criticism in shielding member states from bad news on AIDS and other epidemics. It now gives daily updates, has distributed testing and other equipment and has visited such danger spots as China and Iran to analyze the virus.
“The Trump administration is eyeing steep cuts to global health funds in its 2021 budget proposal,” Foreign Policy reported. In 2020, the administration allocated $123 million to WHO. This would be cut to less than $58 million next year. “The budget proposal also calls for slashing more than $3 billion from the more than $9 billion Congress approved for global health programs managed by the State Department and USAID,” Foreign Policy noted.
Perhaps Congress will stop this.
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US cutting WHO financing goes in the line of this Foreign Affairs article:
The Coronavirus Could Reshape Global Order
Add to it Trump insistence on the “Chinese virus” that, though being true, stinks provincialism. So the question, is this a “Suez moment” for the US?
God I hope you are wrong. But at an article in The Diplomat pointed out China is seizing the moment to look good and Trump adamantly is not.
I have always looked at unemployment as a measure of recession. I hardly pay attention to GDP. Two charts I follow to know how the US economy is doing are related to new unemployment claims and to continuing unemployment claims. Based on the trend in the continuing unemployment claims, sometime between Thanksgiving and Christmas the started trending up and continued up to today. I’ve been assuming the US economy was in trouble starting at the end of last year…
https://stockcharts.com/h-sc/ui?s=$$UNEMPCIN&p=W&st=2014-02-13&en=(today)&id=p42788819009
https://stockcharts.com/h-sc/ui?s=$$UNEMPCLC&p=W&st=2014-02-13&en=(today)&id=p45634548422
If all the other states are as overwhelmed and behind in processing unemployment applications as Washington State is where I live, the current spike in new applications is likely VERY understated.
This sinks up with the Feds Repo-Easing that started in September.
As a casual observer of the economy, I though a recession was going to happen . The only question I had was when. The virus accelerated things. We were living on a phony boom facilitated by cheap credit. People and governments borrowed more than they would because of low interest rates. At 78 years old , I knew that it had to end. It was only a matter of time. You only have to look around and see all of the expensive things people were spending their borrowed money on to realize it had to end. All kind of consumer good including big very expensive cars. Cell phons costing over $1000 and expensive plans. I could go on and on about excess unnecessary spending. All fueled by cheap money. It had to sometime end and that time is now. I remember when an interest rate on anew car was considered good if it was 10% or less. When I financed my home in 1974 the rate was 7.5%. You just can’t create money out of thin air and expect it to continue forever. There is always a time reckoning.
Yeah, all that is excessive ridiculous unnecessary spending, which is why I keep a $60 cell phone, but the real culprit eating young people out of their homes is mortgages, loans, and insurance. In my city a 1 bedroom cheap apartment is $1000 and you can’t rent a room for under $600. Medical ins is $300 & car insurance is $150 on the cheap end. And it’s the 5th in worst paid last time I checked. All that is fueled by excessive lending created by mortgage backed securities and the ending of glass steagall which let the investment banks back into the lending business. And the student loan mess also caused by excessive lending because the govt eats the losses. And excessive lending cash available leads to rising college prices.
All of it brought to citizens by the CORPORATIONS lobbying/buying your Congress person.
Yeah, a recession would be a good outcome. I think we may have a depression with massive unemployment. Not everyone can work from home and a lot of businesses are going to go under and typically those who cannot work from home will be hurt the most.
It has been a bit galling seeing all of the pieces about working from home in the mainstream press when much of the American working class doesn’t have that option. As usual, the top 10-20% might be able to weather the storm but the working class will get hit hard and few people within our elite will care since they will be fine.
The elite will care when they realize how much of their lifestyle is facilitated by others. This may be why so many Republican economists are now clamouring for immediate and large-scale bailouts and cash handouts. All that libertarianism is fine when you don’t mind other people going into debt but now. Now it matters.
Surprise surprise
David Beasley—One of our cases in SC has a familiar name–nominated by another SC all-star
https://www.thestate.com/news/coronavirus/article241354731.html
I will be bold and say that next month the global economy will begin a depression. In the U.S. the unemployment rate will be 15%+. As the U.S. slows its trade the world will begin to run short of USD causing the dollar to rise and emerging markets that borrowed in dollars will be unable to repay their debts.
I have seen estimates that the fed will need to create 15 trillion to plug the upcoming dollar shortage. In the meantime emerging markets will slow economic activity resulting in shortages in the global supply chains.
So in the U.S. people won’t have jobs causing them to burn through their savings (if they have any) and those that have dollars will began to see a shortage of goods because the global supply chain will be stressed.
In the near term the U.S. will have no choice but to implement a New Deal 2.0 to put money into people’s hands and help people survive. Longer term the buzzword will be regionalization as the U.S. and the world attempts to restart their economies by bringing their supply chains closer to home.
One caveat, if the depression gets too severe the population may push back and decide to ring fence people who are at the most risk of covid-19 and restart the economy regardless of the medical system.
I think that the US will also have to insource production of many things. It is all well and good to depend upon an agile global supply chain but when all those chains go through China it starts to look like a terrible idea. If Trump wanted to win he would push for that not his damn wall.
From your lips to the Dear Leader’s ears — since the Democrats have thrown in the towel.
Trump seems to listen to Tucker Carlson as some kind of “informal adviser”. If that is so, and if Tucker Carlson has people reading Sic Semper Tyrannis, then a way to get good ideas to Dear Leader’s ears might be to write them in comments on the appropriate threads of Sic Semper Tyrannis.
If people want to do that, they might consider reading a bunch of SST first to see what kind of comments are accepted and welcomed over time, and what kind of language to couch them in.
If any people here feel they can live within that kind of self-imposed “comment discipline” and they want to get ideas to Dear Leader’s ears, perhaps leaving them at SST in case Tucker Carlson has people reading SST for possible good ideas might be something to try.
This. I expect a return to credit guidance and industrial policy. And if the oligarchs don’t play nice, capital controls.
A recession of record dimensions = a depression! Why is that word so sensitive, almost like a curse you can’t say in public.
Euphemism addiction. Depression sounds too extreme. Unprofessional. I think depression doesn’t begin to describe what we’re about to fall into.
How about Deep Depression?
How about The Greatest Depression Ever?
Or maybe . . . . . . The Longgggggg Shhhhrink.
because of the other two words with a D : Debt and Deflation. That what differentiate Depression from Recession. Google Richard Koo and Irving Fisher. A Recession is lean time where one looses one fat, A Depression is leaner time where one looses fat and muscle.
I notice that there was no discussion of canceling all the stupid little wars that currently exist. Clearly ceasing to use up people and other resources in such senseless behaviour might be a good idea.
While watching the BBC, I notice little reporting from the Syria, Afghanistan, Africa’s despots, etc.and other area where we seem to enjoy kiling one another.
Maybe Nature is telling us to stop behaving like idiots, take a breath, and start treating one another as humans and not as Americans, Brits, Muslims, pagans, ethnicaly, religously, etc. (Sorry, I just woke up from a dream.)
Finally, I recommend that news reports describe normal mortality rates alongside the Covid-19 rates. No matter how cruel this sounds, we are all going to die sometime.
The economical approach to a quicker recovery is to NOT flatten the infection curve, nor to create a surplus of medical equipment which will become unused.
Or: Let the Old die. Treat the young.
The economy and Covid Virus plague amelioration are at cross purposes, competing for the same resources.
I can’t believe there’s no coverage of this. The economy is destroyed forever. This is armegeddon. Hundreds of millions will lose everything they have. Tens of millions, at least, are going to die and/or end up homeless. The Great Depression will be cakewalk compared to this. Yet the media is just running its usual puff pieces.
I’m getting my “exit plan” in order now.
Armageddon is the culmination of the Great Tribulation when all this wicked system will be destroyed forever at the hands of Gods Kingdom, until then critical times hard to deal with will be here. We are in the last second of the “last days”. The Kingdom of God will be taking over rulership here on this planet to time indefinite, time to get out of this system of things and support this Kingdom is running out.
Not a moment too soon either, while people still think their paper money is worth something.
Its worth something as long as people think it is and act like it is. As long as people accept paper money in the facilitation of exchange of goods and services, paper money remains worth its ability to facilitate exchange of those goods and services.
I will do my part by continuing to treat my paper money as if it will always be worth something. If everybody else does the same, it will at least be worth something for longer, and the landing will be slower and easier.
If a global depression is our fate strong action is required to protect the weakest and most vulnerable among us. Corporations have trillions of dollars stashed offshore that is not being productively deployed. This must be seized. Billionaires have no need for tens (sometimes more than a hundred) of billions of dollars. The bulk of this wealth must be seized. Even upper middle class people will need to kick in some wealth. None of this should be seen as being outrageous. The vast hoards of private wealth is what we should find outrageous.