Demand, supply and rebuilding state systems

It really is not too late to turn the coronavirus recession into a sharp V-shaped recession. But I would say that the odds that we are going to do so are less than 10%. Only a very small number of people with any access to the levers of power or the megaphones understand that the keys to rapid recovery lie in boosting aggregate demand quickly by enough and in ensuring that businesses are not sent miss leading "bankruptcy shut down” signals. Heather Boushey understands this. Only a small proportion of other people of status and influence in Washington DC understand this:

That is what is facing us.  Brad Delong is back to flat earthing.

Demand does not rebuild the lost banking sector, that is a separate step.  It will take years to accomplish that, how long did it take last time?  Demand does not solve the unresolved state fairness in the stimulus, it takes years of earmarks to do that.

Demand does not solve the pension issue, and that is going to be a multi-year drag. Local governments already are on the hook for pay back on the lost funds, and will be about a year short when this is complete.

Brad has learned nothing, Brad has repeated this nonsense for forty years, and we have conbsistently had our regular recessions, unresolved issues left hanging. All the value adde nets need be restructured and rebuilt.  Flat earthing and preaching Godot does not help.

I know this because good old Laura Tyson will be bitching about the public sector for years, like she did last time. Not only her, we are going to get a shitload of economists ho suddenly discover we need more public sector and we will be in the same place in a few years.

Had Brad really figured this out then he would have been complaining moths ago when repo madness started and we go another QE. He was not even paying attention, the whole affair passed him by.  Demand is not going to recover the year of repo madness. Brad will fall bakc on the bogus 50 little Hoovers leaving Newsom stranded.

Brad Delong is full of crap, frankly, and should be fired. I have no idea why Newsom puts up with that bunch.

Powell still pushing the horse manure:

Dow futures climb 300 points as Fed’s Powell says don’t ‘bet against American economy’ — even as unemployment could rise to 25%

This is simply Powell trying to salvage pensions, mainly in California.  Should Newsom bet on this nut? Given the local financing  problems Newsom was seeing before the covid hit, Newsom is not relying on a bunch of Godot theories.;