COMMENTARY: The coronavirus and seven lean years
By Dickson Igwe, Contributor
A global economic depression may mean 7 years of hardship and turmoil: be prepared The ancient story of the Jew Joseph and his dream of a world plunged into a seven-year famine is relevant today.
History and fables have a way of returning to the present. And geography decides the existence of humanity. The world today is learning that $10 trillion in stimulus may not mean a return to the economic normal of sustained growth.
The Coronavirus pandemic threatens to overturn economic orthodoxy and may herald a new age where much more thoughtfulness is required in governance, than the stupid and short-sighted worship at the altar of rising GDP as a panacea for ‘all things bright and beautiful”. The world has been plunged into a war with an invisible enemy that could care less about economic philosophy and global power matrices.
Wilful disregard of scientists
Coronavirus is an enemy that decides it’s own trajectory and direction. The west is finding out that wilful disregard of scientists’ advice and hubris will kill rapidly. Now, there is nothing like a crisis to offer the deep learning one receives when life is ‘a cushion.’
And what severe economic shocks teach us is the critical importance of banking to economics. The world’s central banks, led by the Federal Reserve in New York, are where politicians and wealthy investors flee when the ‘fat lady sings’ and when the black clouds overhead become a fiery cauldron that threatens to consume everything. Another lesson is for all the Supply Side, Trickle Down, Economic Theory advocates, that STIMULUS is where they will find answers and refuge when the economic volcano erupts.
Recessions
Recessions are typically cyclical events that begin with a contraction in consumer demand followed by either anaemic growth, or strong growth. The length of time between contraction and growth and then back to contraction varies. However, most recessions are fairly predictable affairs. The problem with a severe economic shock- such as the Corona Virus Pandemic- is that it is frequently caused by some external event or factor that could hardly have been foreseen. Catastrophic leveraging driven by subprime mortgages, war, a devastating natural disaster, pandemic, internal instability, these are events that can suddenly appear throwing daily life, in turmoil.
That is why the analogy of the Hebrew Joseph is a wise example of good governance in an unpredictable age. When economies grow, good governments plan for the inevitable rainy day. They build up their financial reserves and invest in social and physical infrastructure that drive GDP growth and sustainability.
Reserves and strong infrastructure
Then, when the dark clouds gather, and society enters the storm, those reserves and strong infrastructure, hold communities together during the years of famine and hardship. Hospitals are well equipped, there are strong shelters to protect the population, the storage facilities hold water, food, and fuel, enough to see the country through the difficult days ahead.
Before the end of the period of hardship, and as what is held in storage dwindles, and social and physical infrastructure requires renewal and repair, the green shoots of recovery appear. However, the country, in spite of these promising signs, must still live on what it saved and harvested in the years preceding the long recession or depression. So, just like the wise and prudent family that saves for a rainy day, countries wisely governed do the same.
Limit public spending
Even the wealthiest countries during times of prosperity limit public spending and encourage wealthy investors to build their personal wealth by deregulation. Bank Interest rates tend to be higher during the years of prosperity as businesses demand loans and credit to increase their supply chains and inventories. Profitability and high employment put cash in bank accounts and equity into the property. Stocks and shares increase in value, investment returns are robust. Then when the lean years arrive, government spending reverses to the stimulus prototype to keep people at work and the factory floor humming. Commercial banks have access to financial capital provided by central banks to encourage these lending banks to pump money into a failing economy, to prevent a steep contraction in demand and supply.
Families begin to appreciate their savings and equity, and those that lose income live off of what has been put aside. Thrift becomes a good word. The world is a cycle, and the Corona Depression will come to an end one day. The thing is no one can tell when. So let us all heed the wisdom of the ancients, and learn to live simply and wisely, in these lean years that are about to come upon us all.
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Nothing like hearing crap from the gas bag in these terrible times. One would think that mankind could use some uplift not his theories on the doom of the world. You would think that this news service could provide the people with informative news rather than his useless rant. Just goes to show the priority of what’s important. Last I wonder if this bag of dung stood in line at the grocery store as everyone else or was given priority like the rest of the ruling families and government officials. That in itself would make an interesting story to write.
Agree totally
BVI will be on 14 days lock down starting from tonight. They should have made it 15 days – to have a 1 day buffer especially after all that non-social distancing in the last 3 days. When they let out after the lockdown period we will know who all got COVIDI 19
Our superpower neighbor to the north needs a Joseph to lead it through these rough seas, a ferocious ground sea. The Novel Coronavirus (Covid-19) was downplayed, denounced as a hoax; 1 million plus have died. The supposed leader of the free world, though he refused to grab the leadership mantle, believes that the global economy will come roaring back like a howling north wind when this deadly disease subsides. The jury is still out on that. Typically, an economy moves from bust to boom in a somewhat predictable business cycle that can take 3-7 years. This time can be shortened by stimulating the economy( Keynesian approach) as the US is attempting to do with its $2T infusion.
Moreover, a bust economy typically results from structural weaknesses in the economy. However, this bust resulted from a pandemic, an unusual event, and only time will tell how long it will take for the economy to bounce back. Nonetheless, the VI economy is highly vulnerable to external shocks and its economic recovery will be a function of what is happening in the US, Canada, South America, EU, China, .UK……etc. economies. This pandemic has pulled the scab off of the VI’s economic weaknesses. Particularly, it exposes the tourism sector fragility and weakness. Further, it also highlights the need to diversify its economy. Additionally, it exposes its food security vulnerability, though the VI may not be self sufficient in food production, it must work to produce as much food as possible.
Further, this pandemic is rolling from east to west and it is in the 2nd inning. Thus, every resident must to his or her part to prevent, contain, control and mitigate this deadly disease. This is critical to avoid overwhelming the small health system/hospital. An overwhelmed hospital will mean not being able to effectively treat everyone that shows up at its admittance office/emergency room. Lacking the resources to treat everyone that shows up, doctors will have to decide to treat patients that has the best likelihood to survive long-term. This is hash but real.
Thus, government must do everything practical to surge the capacity and capability of the Dr. D. Orlando Smith Hospital, ie, beds, nurses, doctors, lab techs, masks, gowns……..etc, along with ventilators and other equipment. Further, though the VI is a capitalist society, it will have to embrace some socialist democratic principles (non-revolutionary socialism, Swedish model) to help struggling residents, ie, unemployment insurance, housing grants, healthcare, education……….etc.
A million have died. Really. What planet are you talking about. 1 million confirmed cases and 58,000 dead. This must me the fart bag commenting on his own nonsense. Like usual the facts are skewed to fit the writing of his crap. Sit back shove a chip in your mouth and stay off the internet.
It is not socialism; it is government helping people.
I say Igwe because Diaspora is Igwe and like usual his facts are wrong and most importantly he’s full of s**t. The important thing to remember in all of this is that the Black/African world has their heads buried in the sand. Not a Black leader anywhere on the planet offering help. Not a Black researcher (if any exist) offering any help. Instead we have Igwe making comments of the whites actually trying to battle the virus and keep the world economy afloat. Thus, you have the real use of the Black/African which is absolutely nothing as usual.
Other than lay waiting for every weekend to criticize Dickson, anyone you suspect of being of African descent or African leaders or the continent of Africa, why don’t you contribute something constructive? Just in case you didn’t notice there is a pandemic raging across the globe. Should not that be your focus right now instead of creating mischief? By the way, see if you can get through a day without enjoying the benefit of a Black invention. Be safe and stay safe!
Please enlighten us all with the many Black inventions we all use daily. This should be quite entertaining. Please indicate the source of your information.
@@@@Igwe, you seem starved for attention and should be ignored. But, nonetheless, here are few Black contributions that make our daily lives easier:
1. Color IBM PC monitor——-Mark Dean
2. Carbon Light Filament Bulb—-Lewis Latimer
3. Electric Microphone——James E.West
4. Automatic Elevator Doors——Alexander Miles
5. Refrigerated Trucks——Frederick McKinley
6. Traffic Signal/gas mask ——Garrett Morgan
7. Home Security Ststem—-Marie Van Brittan Brown
8. Touch tone telephone, caller ID, fiber optics(conducted the ground breaking research that facilitated development) —-Dr. Shirley Jackson
9. Automatic engine lubricator ——Elijah McCoy
10. Blood transfusion/blood bank——Charles Drew
11. Beauty products—-Madam CJ Walker
12.Peanut butter—-George Washington Carver
13. Iron Board—-Sarah Boone.
These are just a few. Anyway over and out—-mic drop???.
Nice to know that in a world wide population of over 4.5 billion Blacks there were 13 that did something for mankind. Keep it going. Lmao
Igwe , you are wrong this time ! You should fess up and admit it .
Correction: “ 1 million plus have died,” should have read confirmed cases, not have died.
Listen to the scientists please
You are atypical white racists Neo-Nazis Why not post some Nazi literature?
stop adding thumbs up to your pathtic comment, pathetic character.
Adding thumbs up to your pathtic comment, pathetic character.
Is BVINews altering the balance towards Igwad and his supporters by stopping thumbs up for those showing support of Igwads? How pathetic that is if a news service. Doing that is worded than publishing the blowhard and they should be ashamed of themselves. Such a deceitful and ugly people.
One of the benefits of living in a free society,is the ability to freely express yourself..Dickson has a right to his commentary, and if any of us has an issue with him or it, simply refuse to read it. At last look Vino is a free site without a paid subscription.So it is not as if his views are contrary to the content you are paying for. There exists in UK and US politics a Left Right and Center form of politics,,,we need to respect everyone’s right to express theirs..
@@@@Igwe, thanks for zipping up the trap of @@@Igwe, the r….t pig that views Blacks as subhuman, inferior, mentality inferior…….etc and needs to be dragged back to the plantation. Presented with the facts on Blacks contribution(s) to making our daily easier, he resorted to sarcasm and insult. Here is a news flash Blacks have contributed immensely despite great challenges and will continue to do so.
Have you noticed the debt is exploding? And it’s not all because of Medicare. — Ron Paul
https://yt.vu/lX60NMZf-2o
If Dickson Igwe commentary is so repulsive, why don’t the haters just exercised their right and used the opportunity to turn the page and read something that tickle their fancy. Every week just moments after his commentary is published they without probably even reading his commentary dish their racists garbage.
To Ignoramus Limao go on the internet and educate yourself about black inventors.Check the A to Z and you will find hundreds of those inventors. Most impressive, the black women . Alos think about the times
Deficits mean future tax increases, pure and simple. Deficit spending should be viewed as a tax on future generations, and politicians who create deficits should be exposed as tax hikers. — Ron Paul
https://bit.ly/2Xd8VmU